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Uber's $1,500/month AI limit is a useful signal for AI tool pricing

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Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#331

Post by vidarh »

ValentineC wrote: post #104

> I noted that my own token usage comes to about $1,000/month against each of Anthropic and OpenAI - which currently costs me just $100 per provider thanks to their generous subsidized plans for individual subscribers. Do we know that AI providers are going to keep these per-token prices, or eventually lower them because of competition from China? Many lower-budget individuals are now moving to China open weight mode…

We can tell that the inferencing costs for many of these models are low enough that these models are being sold close to real costs on the basis that many of them are open weight and available from third party providers who have no incentive to subsidize them.

I think the frontier labs will need to drop their high per-token prices at least for their low and mid-level models for the reason that several Chinese models (at least Qwen, DeepSeek, Kimi and GLM) are "close enough" that with the right harness they are cost effective alternatives.

They won't necessarily need to close the gap - at least not yet -, because these models won't necessarily compete at the same token counts. E.g. at least some of them need to do far more work to solve the same problems.

But, yeah, the prices will come down one way or the other.

At the same time, even the subscriptions for the cheap Chinese models are probably subsidised, and those subscriptions are likely to get less generous over time.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#333

Post by SecretDreams »

HDThoreaun wrote: post #318
SecretDreams wrote: post #120

Earlier quoted context omitted.

> Do we know that AI providers are going to keep these per-token prices, or eventually lower them because of competition from China? I genuinely do not know how prices can get lower from the current major providers in NA without the whole market collapsing. Everyone is spending copious amounts of money to presumably make more money back.

Prices can go down while tokens sold increases so that profit increases. The labs number one goal right now is moving past software engineers so that every white collar worker in the country finds ai assistants indispensable. Speculation here but I think openAI/antrhopic api inference is insanely profitable, it just needs more volume to amortize the training costs.

> Speculation here but I think openAI/antrhopic api inference is insanely profitable, it just needs more volume to amortize the training costs.

Well, they just rent their hardware, so I'm not so sure. But they'll both be public soon and we should get that breakout in their cost structures, somewhat.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#334

Post by devin »

tokioyoyo wrote: post #204
tuesdaynight wrote: post #138

Why there are so many people that still believe that AI coding is a fad? It's something that started less than two years ago and companies are already paying thousands per seat. I know one that gives you 5k per month. Which other tool went from nothing to this level of acceptance so quickly?

“AI coding is a fad” is not just one big camp of similar-minded people. Different groups have to give up on their pre-existing beliefs in order to be ok with AI coding. Think of people who were very strict with variable names. People who pushed for multiple-levels deep of abstractions for a single API logic that’s not going to be reused. People who believed that coding is craft, rather than just a process to get to t…

"as most arguments don't apply to today's world" makes me want to roll my eyes so hard at you. The vast majority of problems we had with building complicated systems are all still just sitting there. People are speedrunning relearning things we've known about software engineering for decades.

The more things change, the more they stay the same.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#335

Post by squidbeak »

threetonesun wrote: post #243
dghlsakjg wrote: post #210

Earlier quoted context omitted.

The Dotcom bubble is an interesting comparison. The general thrust that everything would be online was correct, it was just that the market mistimed and misallocated of capital by a decade or more. There was massive spending on infrastructure capacity that we wouldn't end up needing until the 2010s. There were hype driven valuations completely disconnected from business fundamentals just because a company was an 'int…

The question you always have to ask is what problems does it directly solve. I personally think most of the current problems in software development and really the world at large are not time-bound problems but alignment issues, and all an LLM can really do there is be some 3rd party oracle that gives you an answer without needing other humans to agree with you.

> The question you always have to ask is what problems does it directly solve

Most directly, human labour. Labour is always a problem for capital. At a certain level of AI competence, businesses don't need to pay humans to complete the work they need doing in order to operate. I don't think anyone would dispute AI competence isn't growing steadily.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#336

Post by fg137 »

john01dav wrote: post #236

Why isn't self hosting (even just renting a GPU server, not necessarily on premise) at large companies or hosting via something like together AI to run the open weight models not more common? I've tried the open weight models and the premium models like Opus and Gemini Pro, and I find that the latter are a little better, but not nearly to the degree to justify the extreme price difference, since the differences large…

> I've tried the open weight models ...

You tried that on a personal machine for yourself once. It's completely different calculation when serving a model to 3000 employees with ever evolving hardware and software requirements. You'll need dedicated hardware in data centers and experts to run them. A company will need to figure out how to manage acquisition, assets and expenses plus 1000 other things, in addition to its actual business. Guess who has figured out all of that already? AWS/Azure/OpenAI etc.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#337

Post by sanex »

transitorykris wrote: post #303

Is anyone doing story point estimation in terms of tokens? If you have a token budget, does this change how you prioritize?

I think there's too much variance between what model you're using and how much you turn your brain off. If I just paste a ticket number into 4.8xHigh its going to use a lot more tokens than if I read the ticket, tell Sonnet what it needs to do, make my commit, run unit tests myself, etc.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#338

Post by spicyusername »

suncemoje wrote: post #328

Lock-in / switching costs are increasingly concerning me. I am using Claude for a good year now and have been accumulating so much "knowledge" in there by now. If Claude became less favorable in terms of price/performance in the future, that would worry me. I've started to think about a distributed solution, where my storage is detached from the inference, but currently Claude is still the way to go for me. Wondering…

Knowledge in there?

Where is the knowledge stored?

All of my knowledge typically gets stored in plans outside of the agent?

And each agent window gets archived regularly, anyways.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#339

Post by scuff3d »

OptionOfT wrote: post #206
tuesdaynight wrote: post #138

Why there are so many people that still believe that AI coding is a fad? It's something that started less than two years ago and companies are already paying thousands per seat. I know one that gives you 5k per month. Which other tool went from nothing to this level of acceptance so quickly?

Because companies are betting that this spending will allow them to reduce cost by firing people. Right now the AI LLM PRs we're seeing are just introducing more work for other people, while these so-called builders are looking good with their new dashboards and functionality they're demoing. But you can't talk to them about the flow of the code. You can't ask them for their thinking as to why certain things are. It'…

Literally in the middle of ripping apart a vibe coded mess at work to figure out what's even worth keeping. Not fun :(

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#340

Post by Insanity »

missedthecue wrote: post #312
criddell wrote: post #292

Earlier quoted context omitted.

Today's frontier models will be tomorrows low-end option. I think whatever model you are using today will be less expensive to use a year or two from now.

Last year's o3 was more expensive than 5.5 is. Whatever model we are using now is probably be more expensive than next year's leading models will be.

Price per M/tokens is also a fuzzy metric when newer models reason longer, and then burn more tokens while doing so.
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