Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Outsourcing plus local AI will soon become more economical vs. frontier labs

signalbloom.ai

Post reply on HN
Print view View original

121–130 of 408 posts

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#121

Post by jgreid »

simonw wrote: post #79
Chyzwar wrote: post #48

When discussing LLM pricing, people are missing the plot. The subscription token price is 10x-40x cheaper than API pricing. Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. The second issue is that the quality of the model “operator” makes a massive difference in the outcomes. Highly skilled senior devs who know how to prompt and have high agency will outperform team peo…

I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). So large companies are getting billed a lot more than those discount subscription plans.

Governance and audit trail are incredibly valuable to large enterprise organizations, especially those working in regulated spaces. Companies will pay a premium if the security/privacy/compliance issues are handled effectively.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#122

Post by isoprophlex »

datadrivenangel wrote: post #98
simonw wrote: post #79

Earlier quoted context omitted.

I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). So large companies are getting billed a lot more than those discount subscription plans.

I've heard that the $20/seat gets waved if you have large enough committed spend.

Would they even care at that scale, if the average employee spends $3000 every month because mgmt mandates slopmaxxing?

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#123

Post by Forgeties79 »

anthonypasq wrote: post #114
Forgeties79 wrote: post #100

Earlier quoted context omitted.

Considering not one company is in the black yet I don’t really know how we can say anyone is making bank, unless we want to count absurd levels of VC funding (now slowing down) I guess.

https://www.wsj.com/tech/ai/mind-blowing-growth-is-about-to-...

Let’s see it first. And without omitting training/infrastructure costs at that. Until then my comment is still accurate.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#124

Post by danielmarkbruce »

kelseyfrog wrote: post #87
Chyzwar wrote: post #48

When discussing LLM pricing, people are missing the plot. The subscription token price is 10x-40x cheaper than API pricing. Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. The second issue is that the quality of the model “operator” makes a massive difference in the outcomes. Highly skilled senior devs who know how to prompt and have high agency will outperform team peo…

> The quality of the model “operator” makes a massive difference in the outcomes. My hunch is that this is the source of much of the variability in outcomes upstream of HN commenters claiming extremes of, "This model changes everything!" to "This[same] model is crap." We haven't operationalized what it means to "be good at prompting," nor developed proxies/heuristics/shibboleths for accessing prompting skill. There's…

It's 100% this. Many people suck at prompting. It's likely that habits from search are ingrained. But in general some people are just so bad at it .

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#125

Post by mark_l_watson »

Great article that reinforces my own opinion but adding the cleverness of adding low cost human labor into the equation. Nice.

I spent a month comparing Gemini Ultra plan to using much lower cost DeepSeek v4 with open source coding harnesses and, spoiler alert: I was happier using the much cheaper and more environmentally friendly open models: https://marklwatson.substack.com/p/my-evaluation-of-ai-agent...

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#126

Post by striking »

stymaar wrote: post #113
gpugreg wrote: post #102

Earlier quoted context omitted.

> What's your source for Opus being a 5T model? Elon Musk tweeted that Grok is 0.5T or 1/10th the size of Opus. https://xcancel.com/elonmusk/status/2042123561666855235#m While this source's reliability is certainly debatable, the size matches the results of this paper, in which researchers estimated the parameter count from model knowledge. https://01.me/research/ikp/

> While this source's reliability is certainly debatable Massive understatement. Nowadays it has become hard to find a single Musk statement that doesn't contain at least one lie. > the size matches the results of this paper, in which researchers estimated the parameter count from model knowledge. https://01.me/research/ikp/ Thanks for the pointer. This estimation has Grok 6 times bigger than Musk claims it is, so ma…

In tiny gray text right above the table is written "90% PI ≈ ±3.00× either side." Is GPT-5.5-Pro 3.4T or 30.8T in size, or somewhere in between? We just don't know.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#128

Post by devmor »

stingraycharles wrote: post #77
Chyzwar wrote: post #48

When discussing LLM pricing, people are missing the plot. The subscription token price is 10x-40x cheaper than API pricing. Your 90$ Claude subscriptions give you close to $1000 to $4000 in equivalent API token pricing. The second issue is that the quality of the model “operator” makes a massive difference in the outcomes. Highly skilled senior devs who know how to prompt and have high agency will outperform team peo…

Also, your local hardware is in no way capable of running the types of models that the cloud providers do, it’s just not economically feasible, and it never will be.

> it never will be.

Giving strong “640k is enough for anyone” vibes here.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#129

Post by wongarsu »

runtime_terror wrote: post #111
wongarsu wrote: post #92

Earlier quoted context omitted.

Depends on what their actual costs are. Either they are losing lots of money on subscriptions, or they make absolute bank on API pricing. Looking at the pricing of 1-2T models like Kimi or DeepSeek on the open market, I'm tempted to assume that inference costs are closer to subscription pricing than to API pricing. Especially considering that subscriptions a) distribute load over time via rate limits, and b) will inc…

> I'm tempted to assume that inference costs are closer to subscription pricing than to API pricing So just going on vibes? While some people don't like his content, Ed Zitron shows a lot of evidence for your assumption being very wrong. These companies are bleeding cash at ungodly rates. It's likely their API pricing is still subsidized if you look at their overall financial picture. Related, there's a good reason t…

Selling inference for more than inference costs is not incompatible with bleeding cash at ungodly rates. They do in fact pay ungodly amounts of cash for other things, like training, marketing, etc. Heck, you can bleed cash while being profitable (in the accounting sense)

Also, API prices going up a lot every new version is more an OpenAI thing, and even there it's a recent trend: GPT 5.0 was a big price drop compared to 4.1, and 4.1 was cheaper than 4o, which itself got a price cut at some point and is cheaper than 4. Meanwhile Anthropic's API pricing stayed stable for many versions, then got slashed to a third with the 4.2 release and have stayed at that level since.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#130

Post by Npovview »

treis wrote: post #12
jqpabc123 wrote: post #2

The current closed source frontier models are more capable than the latest from DeepSeek. But is the capability difference enough to justify a 30x price difference? "Frontier models" are caught in a financial dilemma of their own making --- they have spent such huge sums on development and as a result, they may have inadvertently priced themselves out of the market. Energy costs are a huge factor for AI. He who has t…

Historically the winners in software have a flywheel that turns faster with more users. Facebook the more of your friends on it the better the product was. Google tracked how long users were on pages to improve search. The frontier models are going to win that way. They won't feed your code back into the system but they will track which code you keep and what code gets a "try again claude". They're not going to lose…

Exactly the CC sessions flywheel is a treasure trove of data and they all know that. The reason we went to stackoverflow was because there was data (upvotes/downvotes, comments, workarounds) discussed under the answers. That is a very high quality signal from the field.
Post reply on HN