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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

#331

Post by claysmithr »

crazygringo wrote: post #108
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 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.

Not really, I can run models on my 24GB mac.

Re: AI subscriptions are a ticking time bomb for enterprise

#332

Post by happosai »

sunaookami wrote: post #81

Isn't EVERY subscription and SaaS a ticking time bomb for enterprise?

It is, but every enterprise is just looking at the next few quarter results. ROI looks so great when you don't invest in anything and just lease / subscribe / SaaS everything. Time bombs are just a concern for the future.

Re: AI subscriptions are a ticking time bomb for enterprise

#333

Post by Exoristos »

MostlyStable wrote: post #200
nate8bit wrote: post #159

The entire problem with "AI" is that it's easy to do without. The AI companies know it, the users know it - even the most pro AI agent manager knows it. Thought experiment: remove AI from the world right now, all of it - what do you have? Business as usual. This article doesn't do enough to underscore that - dreaded be the day I need to get an actual engineer to review a PR, right?

Isn't that always the case in the early stages of new technology adoption? It becomes less and less true as the new technology becomes more and more integrated. In the first few years after electric motors became a thing, one could have said the same thing. We would have just gone back to steam. If you tried to "do without them" now, society would collapse. So the question is not if we can do without them now, it's i…

So you're expecting humans to go extinct except for a few examples in museums?

Re: AI subscriptions are a ticking time bomb for enterprise

#334

Post by claysmithr »

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.

I agree. The AI bubble is going to pop, people will move to local models, and the datacenters will be abandoned

Re: AI subscriptions are a ticking time bomb for enterprise

#336

Post by simianwords »

alex_sf wrote: post #264
simianwords wrote: post #257

Earlier quoted context omitted.

GPT-4 (original API): Input: $30 / 1M tokens Output: $60 / 1M tokens GPT-5.5: Input: $5 / 1M tokens Output: $30 / 1M tokens Costs have been reducing by over 5x year over year. Inference cost concern is mostly performative. https://simianwords.bearblog.dev/conclusive-proofs-that-llm-... Edit: can't reply but companies aren't selling inference at loss. In the blog post I point to third party hosting of open models like…

The price a company charges, _particularly_ a high growth VC-backed one, is a poor signal for their costs. That blog post is not very compelling either. Without knowing details of the architecture, comparing the various frontier models to open models doesn’t make sense.

> That blog post is not very compelling either. Without knowing details of the architecture, comparing the various frontier models to open models doesn’t make sense.

Why do you need to know the architecture? Just compare Deepseek V4's performance with GPT 4 and treat internals as a blackbox. Deepseek is much cheaper and way more performant. If you can agree to reasonable assumptions

1. that closed source models are more efficient than open source

2. Deepseek is served at a profit and not a loss

Then it is pretty clear that the prices have gone down. If the prices have gone down more than 20x-30x then surely it is not _still_ subsidised is it?

I think this amount of skepticism is not warranted here. Every reasonable explanation or proxy is met with "but you don't know what they really do" is naive.

It is borderline conspiratorial to believe it this way.

Re: AI subscriptions are a ticking time bomb for enterprise

#338

Post by stavros »

XenophileJKO wrote: post #322
zamalek wrote: post #262

Earlier quoted context omitted.

What they charge people says nothing about what it costs them. Off the top of my head, one confounding factor is trying to win back marketshare from Anthropic. We will only know the actually situation once Anthropic goes public and we can look at their books.

"Neither Mr. Edison nor anyone else can override the well-known laws of Nature, and when he is made to say that the same wire which brings you light will also bring you power and heat, there is no difficulty in seeing that more is promised than can possibly be performed. To talk about cooking food by heat derived from electricity is absurd."

Wait, this person knew that the wire could bring you light, but not that it could bring you heat? Hadn't they noticed that light bulbs heat up?

Re: AI subscriptions are a ticking time bomb for enterprise

#339

Post by stavros »

raincole wrote: post #292
IncRnd wrote: post #280

Earlier quoted context omitted.

If you go to https://developers.openai.com/api/docs/pricing , you will see the actual prices, which do not match what you posted: GPT-4.1 Input: $2.00 / 1M Tokens Output: $8.00 / 1M Tokens

The parent comment is correct. They are talking about GPT-4 , which was really expensive by today's standard. After GPT4o came out, GPT-4 was completely forgotten.

Yeah, even back then, ~nobody was using GPT-4 because it was released as some weird Sam Altman flex. Super expensive, not that capable.

Re: AI subscriptions are a ticking time bomb for enterprise

#340

Post by gampleman »

edwinjm wrote: post #337

Does the writer understand that for every developer who burns all tokens, there are many people who subscribe just to join the AI revolution, but only ask a couple of questions a day?

No. Large co I work at everyone is like running at least 3 concurrent Claude sessions all day every day. Talking to friends in other companies it seems the same.

Big difference between professional deployments and personal ones.

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