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AI subscriptions are a ticking time bomb for enterprise

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Re: AI subscriptions are a ticking time bomb for enterprise

#131

Post by evgen »

vb-8448 wrote: post #112
evo_9 wrote: post #79

Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.

> within a few years we will be running local models as good as today’s frontier Unless there isn't some important breakthrough in hw production or in models architecture, it's quite the opposite: bigger, more expensive and more energy-intensive hw is needed today compared to 1 or 2 years ago.

I can run qwen3.6-27b on a four year-old Macbook Pro that dominates ChatGPT-4o (the frontier model from 2 years ago) and is competetitve against early ChatGPT-5 versions. We are also getting a lot smarter about using and deploying these local models. Your entire AI stack from two years ago would be absolutely crushed by a todays local LLM models and a high-end local inference system when combined with a good modern coding agent.

Re: AI subscriptions are a ticking time bomb for enterprise

#132

Post by submeta »

This is true. At our company they rolled out ChatGPT with Codex. After two months of happily using it, I got a call from the IT OPs telling me I burnt through four hundred million tokens, 200m a month. And created at least a thousand euro bill. That’s after I used all the credit, but I don’t have all details. The guy told me to „watch my usage.“ What does that even mean. He doesn’t use it himself and apparently he doesn’t know how value is created here and how he can monitor and limit usage.

Did OpenAI switch from fixed prices per seat to usage based? This will surprise many companies I reckon.

Personally I use Claude Code, the 200 euro plan. And am a heavy user. A few weeks ago I realized that CC shows the token usage in cli, in the bottom right. Something I never cared about because I thought paying 200 euro a month will give me „unlimited“ access.

But I guess the party is slowly coming to an end? Prices are going to increase slowly? And the flatrates will be removed eventually?

Too bad, it was nice while it lasted.

Re: AI subscriptions are a ticking time bomb for enterprise

#133

Post by slashdave »

evo_9 wrote: post #79

Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.

> within a few years we will be running local models as good as today’s frontier models

I seriously doubt it. Scaling is already strained (don't buy into the "exponential" hype). And, in any case, the competition will be against the frontier models that will exist in two years.

Re: AI subscriptions are a ticking time bomb for enterprise

#134

Post by scragz »

greesil wrote: post #118
alsetmusic wrote: post #115

Earlier quoted context omitted.

Local modals are 6 months to 18 months behind frontier. Even if the performance of a cloud model is faster, it's clear that local is catching up.

How do you know this? I'm not trying to attack your statement, I am genuinely curious how anyone knows anything about model performance outside of benchmarks that are already in the training set.

using them you kind of get a feeling for skill level and can extrapolate that better than juiced benchmarks.

Re: AI subscriptions are a ticking time bomb for enterprise

#135

Post by lukeschlather »

alsetmusic wrote: post #115
crazygringo wrote: post #108

Earlier quoted context omitted.

> within a few years we will be running local models as good as today’s frontier models with almost no cost burden Based on what? The RAM requirements alone are extraordinary. No, running large models on shared, dedicated hosted hardware at full utilization is going to be vastly more cost-efficient for the foreseeable future.

Local modals are 6 months to 18 months behind frontier. Even if the performance of a cloud model is faster, it's clear that local is catching up.

It is not getting easier to obtain hardware that can run models which are sufficiently useful to undercut frontier models, if anything the cost of such hardware has gone up by 25% or more just in the past 6 months.

Re: AI subscriptions are a ticking time bomb for enterprise

#136

Post by christopherwxyz »

slashdave wrote: post #133
evo_9 wrote: post #79

Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.

> within a few years we will be running local models as good as today’s frontier models I seriously doubt it. Scaling is already strained (don't buy into the "exponential" hype). And, in any case, the competition will be against the frontier models that will exist in two years.

I would readjust your convictions.

We are only 2-4 years away from consumer grade immutable-weight ASICs.

Re: AI subscriptions are a ticking time bomb for enterprise

#137

Post by __s »

alsetmusic wrote: post #115
crazygringo wrote: post #108

Earlier quoted context omitted.

> within a few years we will be running local models as good as today’s frontier models with almost no cost burden Based on what? The RAM requirements alone are extraordinary. No, running large models on shared, dedicated hosted hardware at full utilization is going to be vastly more cost-efficient for the foreseeable future.

Local modals are 6 months to 18 months behind frontier. Even if the performance of a cloud model is faster, it's clear that local is catching up.

You still need the hardware

I've got a 128GB strix halo staying warm at home, it has nothing on top models with big budget. It's good supplement to low end plans for offloading grunt work / initial triage

Re: AI subscriptions are a ticking time bomb for enterprise

#138

Post by StarlaAtNight »

Sharlin wrote: post #18

I think I'm going to puke if I see one more "It's not X. It's Y." phrase or the word "load-bearing" used metaphorically.

Thanks for calling that out. I went through and extracted a good handful of those. It’s not a short list. It’s a handful.

“”” The subsidy era is not winding down gracefully. It is showing cracks everywhere. … the question is not whether they got a good deal. The question is how long that deal survives. … A developer running three or four concurrent coding agents is not consuming 3x or 4x the tokens of a chat conversation. It is an order of magnitude more … These are not experiments anymore. They are load-bearing workflows. … That is not a rounding error. That is a line item that needs its own budget code. “””

Re: AI subscriptions are a ticking time bomb for enterprise

#139

Post by tim333 »

> the gap between what your organization pays for AI today and what it will pay in 18 months is going to be one of the most disruptive line-item increases most companies have ever absorbed

Colour me skeptical on that one. Unless the AI improves a lot so it makes sense to spend more.

Re: AI subscriptions are a ticking time bomb for enterprise

#140

Post by slashdave »

christopherwxyz wrote: post #136
slashdave wrote: post #133

Earlier quoted context omitted.

> within a few years we will be running local models as good as today’s frontier models I seriously doubt it. Scaling is already strained (don't buy into the "exponential" hype). And, in any case, the competition will be against the frontier models that will exist in two years.

I would readjust your convictions. We are only 2-4 years away from consumer grade immutable-weight ASICs.

We are discussing how rapid development has been, and now you want to freeze your model in silicon?
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