171–180 of 222 posts
We are slowly inching closer to the point where AI and AI products will be billed for what they cost. We are currently living in the heavily discounted world where everything subsidized to the point where a lot of it is free. It seems like they can't or won't keep that up anymore. My prediction is that whenever one of the big companies raise their prices or move features to higher tiers others will follow soon. They…
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> I suspect the API prices are already served at prices with profitable unit economics. There is absolutely no evidence to support this.
Mr.Truth-teller Amodei confirmed it that APIs are profitable at Anthropic.
I want to see their S-1s, then we can fight.
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> We are slowly inching closer to the point where AI and AI products will be billed for what they cost. I suspect the API prices are already served with profitable unit economics. The SOTA API prices are much higher than the costs for other providers to run very large open weight models. The monthly subscription plans were being offered at a discount to generate interest in these models. We're not entering a period o…
> I suspect the API prices are already served at prices with profitable unit economics. There is absolutely no evidence to support this.
Obviously this is an extremely rough calculation. I can even be off by a factor of 10 and it's still a pretty good return.
We are slowly inching closer to the point where AI and AI products will be billed for what they cost. We are currently living in the heavily discounted world where everything subsidized to the point where a lot of it is free. It seems like they can't or won't keep that up anymore. My prediction is that whenever one of the big companies raise their prices or move features to higher tiers others will follow soon. They…
I see it as no different from the previous generation of consumer startups burning money - as Derek Thompson wrote,
> ...if you woke up on a Casper mattress, worked out with a Peloton, Ubered to a WeWork, ordered on DoorDash for lunch, took a Lyft home, and ordered dinner through Postmates only to realize your partner had already started on a Blue Apron meal, your household had, in one day, interacted with eight unprofitable companies that collectively lost about $15 billion in one year.
This is funny, but Copilot is still an interesting case-study and (probably) failed predictor of where we are headed. We all know, and have known for a long time, that the AI labs selling dollars for a nickel are going to pull that rug, and up that price, at some point. Copilot, though, has been consistently the weakest mainstream AI coding offering. Inferior to Cursor or Windsurf at editor completions, inferior to C…
It seems everything Microsoft does is like this nowadays. They just can't seem to win anymore.
We are slowly inching closer to the point where AI and AI products will be billed for what they cost. We are currently living in the heavily discounted world where everything subsidized to the point where a lot of it is free. It seems like they can't or won't keep that up anymore. My prediction is that whenever one of the big companies raise their prices or move features to higher tiers others will follow soon. They…
run local models
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Reddit is slowly dying for me for that reason. So many bot / bot like accounts that seem ... off / hidden histories. Trust level with any given comment or post now is reaching 0 fast. It's a bummer because it's hitting a lot of users and even valid users who don't communicate good are getting hit hard too with skeptical responses.
The irony of Reddit's early days was that it was bootstrapped with fake accounts run by the founder.
We are slowly inching closer to the point where AI and AI products will be billed for what they cost. We are currently living in the heavily discounted world where everything subsidized to the point where a lot of it is free. It seems like they can't or won't keep that up anymore. My prediction is that whenever one of the big companies raise their prices or move features to higher tiers others will follow soon. They…
This is already happening. For new Anthropic enterprise accounts you are billed at api token prices (maybe with a small volume discount). Anthropic makes a profit on those tokens. (Sure, that profit does not cover the model training costs, but that’s a separate issue.) It’s the subscriptions for individuals (e.g. Claude Max) that are still subsidized below cost. > I wonder if managers will be as excited about AI when…
It is? If another company comes out with a better model tomorrow and offers it at the same price Anthropic charges for Opus, they’re going to lose customers fast. They have to keep training to keep selling inference.
Most businesses factor in the cost of making their product into the product’s P&L.
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It is already bafflingly expensive. I interviewed at a place recently where they said the average dev was hitting $2k/mo in Claude code costs. That is no longer a helpful tool... it costs like ~15% of an actual dev. Even if it is helping, is it actually... making things better or building anything truly important? The issue seems way too nuanced to spend $2k/mo. Not to mention the entire tech industry floats on hype…
> That is no longer a helpful tool... it costs like ~15% of an actual dev. The full cost of each employee is more than their salary. The common estimate is 1.4X their salary due to all of the employer-paid taxes, benefits, and other things. So even $2K/month of token costs would only be around 10% of the cost of a mid-range developer cost. It doesn't have to increase productivity much to justify the cost.
Earlier quoted context omitted.
This is already happening. For new Anthropic enterprise accounts you are billed at api token prices (maybe with a small volume discount). Anthropic makes a profit on those tokens. (Sure, that profit does not cover the model training costs, but that’s a separate issue.) It’s the subscriptions for individuals (e.g. Claude Max) that are still subsidized below cost. > I wonder if managers will be as excited about AI when…
> Sure, that profit does not cover the model training costs, but that’s a separate issue It is? If another company comes out with a better model tomorrow and offers it at the same price Anthropic charges for Opus, they’re going to lose customers fast. They have to keep training to keep selling inference. Most businesses factor in the cost of making their product into the product’s P&L.
Lastly, theyll realize like every good capitalist, theres more profit in exclusiveness and cutiing out customers.