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Zed's Pricing Has Changed: LLM Usage Is Now Token-Based

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Re: Zed's Pricing Has Changed: LLM Usage Is Now Token-Based

#31

Token based pricing generally makes a lot of sense for companies like Zed, but it sure does suck for forecasting spend. Usage pricing on something like aws is pretty easy to figure out. You know what you're going to use, so you just do some simple arithmetic and you've got a pretty accurate idea. Even with serverless it's pretty easy. Tokens are so much harder, especially when using it in a development setting. It's…

I agree that tokens are a really hard metric for people. I think most people are used to getting something with a certain amount of capacity per time and dealing with that. If you get a server from AWS, you're getting a certain amount of capacity per time. You still might not know what it's going to cost you to do what you want - you might need more capacity to run your website than you think. But you understand the units that are being billed to you and it can't spiral out of control (assuming you aren't using autoscaling or something).

When you get Claude Code's $20 plan, you get "around 45 messages every 5 hours". I don't really know what that means. Does that mean I get 45 total conversations? Do minor followups count against a message just as much as a long initial prompt? Likewise, I don't know how many messages I'll use in a 5 hour period. However, I do understand when I start bumping up against limits. If I'm using it and start getting limited, I understand that pretty quickly - in the same way that I might understand a processor being slower and having to wait for things.

With tokens, I might blow through a month's worth of tokens in an afternoon. On one hand, it makes more sense to be flexible for users. If I don't use tokens for the first 10 days, they aren't lost. If I don't use Claude for the first 10 days, I don't get 2,160 message credits banked up. Likewise, if I know I'm going on vacation later, I can't use my Claude messages in advance. But it's just a lot easier for humans to understand bumping up against rate limits over a more finite period of time and get an intuition for what they need to budget for.

Re: Zed's Pricing Has Changed: LLM Usage Is Now Token-Based

#32
post #21

Earlier quoted context omitted.

This is partially why, at least for LLM-assisted coding workloads, orgs are going with the $200 / mo Claude Code plans and similar.

Until the rug inevitably gets pulled on those as well. It's not in your interest buy a $200/mo subscription unless you use >$200 of tokens per month, and long term it's not in their interest to sell you >$200 of tokens for a flat $200.

The pricing model works as long as people (on average) think they need >$200 worth of tokens per month but actually do something less, like $170/month. Is that happening? No idea.

Re: Zed's Pricing Has Changed: LLM Usage Is Now Token-Based

#33
Good change. I’m not a vibe coder, I use Zed Pro llm integration more like glorified stack overflow. I value Zed more for being an amazing editor for the code I actually write and understand.

I suspect I’m not alone on this. Zed is not the editor for hardcore agentic editing and that’s fine. I will probably save money on this transition while continuing to support this great editor for what it truly shines at: editing source code.

Re: Zed's Pricing Has Changed: LLM Usage Is Now Token-Based

#36

I can imagine the near future where companies “sponsor” open source projects by donating tokens to “mine” a PR for a feature they need.

I love this! Finally a more direct way for companies to sponsor open source development. GitHub Sponsors helps, but it is often so vague where the funding is going.

More often than not, for individuals, it's barely contributing to their living costs

Re: Zed's Pricing Has Changed: LLM Usage Is Now Token-Based

#37
post #32
post #21

Earlier quoted context omitted.

Until the rug inevitably gets pulled on those as well. It's not in your interest buy a $200/mo subscription unless you use >$200 of tokens per month, and long term it's not in their interest to sell you >$200 of tokens for a flat $200.

The pricing model works as long as people (on average) think they need >$200 worth of tokens per month but actually do something less, like $170/month. Is that happening? No idea.

Maybe that is what Anthropic is banking on, from what I gather they obscure Max accounts actual token spend so it's hard for subscribers to tell if they're getting their moneys worth.

https://github.com/anthropics/claude-code/issues/1109

Re: Zed's Pricing Has Changed: LLM Usage Is Now Token-Based

#38

This whole business model of trying to shave off or arbitrage a fraction of the money going to OpenAI and Anthropic just sucks. And it seems precarious. There's no honest way to resell tokens at a profit, and everyone knows it.

>There's no honest way to resell tokens at a profit, and everyone knows it.

Agree with the sentiment, but I do think there are edge cases.

e.g. I could see a place like openrouter getting away with a tiny fractional markup based on the value they provide in the form of having all providers in one place

Re: Zed's Pricing Has Changed: LLM Usage Is Now Token-Based

#39
> Token-agnostic prompt structures obscure the cost and are rife with misaligned incentives

Saying that, token-based pricing has misaligned incentives as well: as the editor developer (charging a margin over the number of tokens) or AI provider, you benefit from more verbose input fed to the LLMs and of course more verbose output from the LLMs.

Not that I'm really surprised by the announcement though, it was somewhat obviously unsustainable

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