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Such drastic changes tell me that pricing of tokens is arbitrary, and AI business is running out of money fast.
Earlier quoted context omitted.
That assumes Tokens will remain a meaningful expense. I’m not sure developers will find uses for ever more tokens nearly as quickly as the prices fall.
How are we so confident that prices will fall? Isn't the exact opposite happening, right now, during arguably the most critical part of this whole saga (pre-IPO to make things appear as beautiful and as not-obviously-illegal as possible)? And the only reason they were "falling" previously was for hyper growth.
Now that we have pretty decent open source models, anyone can create a new business to supply more tokens. Sure there’s short term scarcity: energy, GPUs, cooling, but this is a scale up problem. More token demand = more data center build = more energy plant build. This downward pressure will also keep frontier private model prices in check.
Differentiation seems to be happening at the harness level, whereby we can expect token spend to be a metric to compete on and drive down for the customer (at least hoping tools in the application space don’t continue token based billing as their primary revenue stream).
These are not short term hyper growth forces, but a fundamental alignment of incentives.
Earlier quoted context omitted.
That assumes Tokens will remain a meaningful expense. I’m not sure developers will find uses for ever more tokens nearly as quickly as the prices fall.
How are we so confident that prices will fall? Isn't the exact opposite happening, right now, during arguably the most critical part of this whole saga (pre-IPO to make things appear as beautiful and as not-obviously-illegal as possible)? And the only reason they were "falling" previously was for hyper growth.
i don't think a lot of people know this, but a cluster of GPUs can serve multiple clients without much of a drop in performance, e.i. worst case scenario you band together with 6-16 people to run a 2-3 H100 server to host deepseek V4 Flash or 4-6 to run Pro, and you're getting the same performance as if you ran it alone, this means a lot of companies can afford throwing 50-100k into their own LLM server cluster.
We're at a price point where if you push it further people will move, there's no real vendor lock in, your agent config, skills, MCP servers etc are all reusable with other models and harnesses, so unless you get all providers to collude on a price hike, you risk an exodus of customers
One month I could use Github Copilot fully with no disruptions. The next month, after pricing changes, I’ve run out of tokens in two days. Such drastic changes tell me that pricing of tokens is arbitrary, and AI business is running out of money fast.
Taking SpaceX as an example, they have increased prices across all their consumer products over the past six months. But they definitely aren't short on money with Alphabet and Anthropic combined paying them over $2 billion per month.
Microsoft/GitHub lost out here as they were just repacking other people's products.
One month I could use Github Copilot fully with no disruptions. The next month, after pricing changes, I’ve run out of tokens in two days. Such drastic changes tell me that pricing of tokens is arbitrary, and AI business is running out of money fast.
I think it's more a consequence of pushing for the biggest valuation/IPO. Rumoured profits on inference are north of 70%. Taking SpaceX as an example, they have increased prices across all their consumer products over the past six months. But they definitely aren't short on money with Alphabet and Anthropic combined paying them over $2 billion per month. Microsoft/GitHub lost out here as they were just repacking othe…
Earlier quoted context omitted.
That assumes Tokens will remain a meaningful expense. I’m not sure developers will find uses for ever more tokens nearly as quickly as the prices fall.
How are we so confident that prices will fall? Isn't the exact opposite happening, right now, during arguably the most critical part of this whole saga (pre-IPO to make things appear as beautiful and as not-obviously-illegal as possible)? And the only reason they were "falling" previously was for hyper growth.
In the other direction models continue to grow larger, new customers continue to arrive, and existing customers continue to find ever more creative ways to burn large quantities of tokens as the prices fall.
I doubt anyone can say with certainty where the equilibrium will be 1 or 5 years from now largely because (among many other things) it's impossible to predict how much of the current economy AI will end up eating. In general though the third party providers of open weights models are probably the most reliable data source available since they have little to no incentive to subsidize usage.
One month I could use Github Copilot fully with no disruptions. The next month, after pricing changes, I’ve run out of tokens in two days. Such drastic changes tell me that pricing of tokens is arbitrary, and AI business is running out of money fast.
I think it's more a consequence of pushing for the biggest valuation/IPO. Rumoured profits on inference are north of 70%. Taking SpaceX as an example, they have increased prices across all their consumer products over the past six months. But they definitely aren't short on money with Alphabet and Anthropic combined paying them over $2 billion per month. Microsoft/GitHub lost out here as they were just repacking othe…