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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

#391

Post by aaronharnly »

swingboy wrote: post #378
1123581321 wrote: post #196

Earlier quoted context omitted.

Are we talking about the same thing? I just double-checked Anthropic still offers per-seat plans. So does OpenAI though they split the Codex-only plan away from per-seat. Gemini does as well. There’s pooled usage over certain limits but it’s still a good deal to upgrade the seat of a heavy user. What happened two months ago?

Anthropic's Enterprise plan is per-seat, but that's just for access, isn't it? The actual usage per seat is billed at API rates. https://support.claude.com/en/articles/9797531-what-is-the-e...

Yes, once you’re over some threshold (most recently 150 seats), you have to pay the per-seat fee PLUS usage.

And once you can make a certain threshold of commit, the seats are free and all you pay is usage. They are definitely making a margin on the usage.

In other words, this article is, I wouldn’t say misinformed, but definitely underinformed.

Re: AI subscriptions are a ticking time bomb for enterprise

#392

Post by aaronharnly »

carra wrote: post #98

Not just AI. Every subscription in general can be a time bomb. You grow more dependent on it, and the provider can disappear or take it away at any moment.

This is exactly true and it’s what every SaaS company counts on. They have four basic moves:

1. Sell you X seats, expecting that internal network effects will get you to 3X soon enough.

2. Sell you X seats, noting that as soon you reach 2X seats, you need to move to the Enterprise plan, under which largely the same feature set plus a couple of gated SCIM controls will cost twice as much.

3. Sell you X seats for their core product, then announce that features B and C are actually an additional SKU that requires additional per-seat subscriptions that double the cost.

4. Sell you X seats for their core product, then immediately announce that you’re on a “legacy plan”, but they’re happy to move you now to their updated offering, which is the same product but now structured to cost twice as much.

Re: AI subscriptions are a ticking time bomb for enterprise

#393

Post by dools »

janderland wrote: post #214
dools wrote: post #192

Earlier quoted context omitted.

Kimi k2.6 is about on par with GPT 5.2 so I’d say open weight models are about 6 months behind.

Has Kimi found a way to vastly reduce the amount of VRAM required without running at 3 tokens per second? That’s the real concern.

I said "open weight" rather than "local". I mean, local if you have $240k to drop on GPUs but you can run Kimi k2.6 on a B300 cluster for ~$50/hour too.

Re: AI subscriptions are a ticking time bomb for enterprise

#394

Post by throaway198234 »

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.

^^^^^^^^^^^

AI is the future operating system of every computer everywhere

Re: AI subscriptions are a ticking time bomb for enterprise

#395

Post by throaway198234 »

SkiFire13 wrote: post #353
GenerWork wrote: post #293

Earlier quoted context omitted.

>I don't believe there's that big of a market for local AI. Most people don't care that much, I agree that the market for local AI is basically limited to nerds at this point, but that's because nobody's really explained why local AI is a good thing and also because the vast majority of people need the $20 paid plan at most. How much time and money would it take to get something half as good as OpenAIs products runni…

> that's because nobody's really explained why local AI is a good thing There are a lot of good things that need to be explained to people, but nobody ever managed to. I don't think this will be any different. > because the vast majority of people need the $20 paid plan at most Exactly, people are not gonna invest time and money when there's already something else that satisfies their need. Local AI will need to be b…

Free is always better.

Re: AI subscriptions are a ticking time bomb for enterprise

#396

Post by SonnyTark »

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.

I run Qwen3.6-35B-A3B on my 8GB VRAM GPU for 3 weeks now and its been blowing my mind how good it is (coded multiple tools that I use daily, setup CI/build scripts for several projects, meaningfully contributed to a large personal project, etc).

No one can deny that right now these new compact models are not as good as frontier models but for the first time we actually have competent local-first models. If I give you a local model that runs on your current hardware and performs at 75% of the ability of a frontier private paid model, would you still pay for frontier? More importantly, would you hand control of your processes and code to them knowing enshitifcation and price-hikes are always lurking nearby?

For businesses, I get it you want to compete. But personally, it's over. Even if I considered for a second paying OpenAI/Claude, not gonna happen now.

Re: AI subscriptions are a ticking time bomb for enterprise

#397

Post by bsder »

SkiFire13 wrote: post #242
iwontberude wrote: post #179

Earlier quoted context omitted.

I strongly disagree. Humans are so insanely well incentivized here with trillions in market share to make localized AI good enough and that’s the only benchmark they need.

Are they? I don't believe there's that big of a market for local AI. Most people don't care that much, and you'll most likely lose the advertising revenue.

I agree that the vast majority of punters don't care about "local AI".

However, if you can deliver 90% of the value of AI for 90% less cost, that is a really big incentive. Companies will spring up to fill that kind of gap.

Nobody can undercut the big AI players right now because they are all over-funded by VC money. Once the frontier companies try to match cost to expense, suddenly they become very, very vulnerable.

Re: AI subscriptions are a ticking time bomb for enterprise

#398

Post by thiisguy »

crystal_revenge wrote: post #298
Leynos wrote: post #274

Earlier quoted context omitted.

What kind of useful context window are you getting on a 4090, out of curiosity?

256k tokens for both the MBP and the 4090

Can you share more about your setup please? Like which models and other specs on the machines?

Edit: ah I see the models mentioned in another comment of yours

Re: AI subscriptions are a ticking time bomb for enterprise

#400

Post by itsmek »

pvtmert wrote: post #313

Although I agree with the sentiment in the article, it smells very LLM~y. Especially the sections and punchlines. Such as: `That is not a rounding error. That is a line item that needs its own budget code.`

>The Math Your Finance Team Has Not Done >Pull out the napkin. This matters.

Nobody writes like this.

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