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

simonwillison.net

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

#451

Post by LastTrain »

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…

> Do we know that AI providers are going to keep these per-token prices, or eventually lower them because of competition from China?

Raise, they are going to raise the prices. We will spend more on AI infrastructure in 2026 and 2027 than the gross sales of the entire global software and services sector. Current pricing is at a major loss for current providers.

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

#452

Post by tokioyoyo »

dakolli wrote: post #396
tokioyoyo wrote: post #194

Earlier quoted context omitted.

Yes, you can. There are multiple inference providers out there. The problem is, it’s hard to beat the Chinese providers in cost. And you also have to compete with frontier model providers’ subsidized offerings.

They charge the exact same prices. So many people in these comments have no idea what they're talking about. Even if they did charge less, nobody is going to deal with the latency of sending requests to China. edit: Actually American inference providers are cheaper for Chinese models. There's way more competition here because the Chinese aren't idiots and investing every last dollar they have into data centers for ll…

Can you please link me DeepSeekV4 provider that's cheaper than their official offering? And not all tasks require low latency.

Also, there are a lot of competition in China. Like a lot. You might know better than me as well, but although the biggest AI-labs are based in USA, the adoption is weirdly global. Like as a general sense of what's going on - you can see AI-related ads literally everywhere in Tokyo, almost all the time, in every single screen in public.

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

#453

Post by HDBaseT »

insane_dreamer wrote: post #287

I still have never hit a ceiling with my Claude Max $100 account, much less the Max $200 account. I'm not burning tokens needlessly, nor running it all day, but I do use CC almost daily. What are these devs doing that they are burning more than $1500 in tokens a month? Maybe it's just me, but I still find that I really have to "shepherd" the AI and work with it to get the results I want. And I read every line of code…

You are paying account pricing. Uber is paying API pricing.

You're $100/m plan is likely equivalent to thousands of dollars of API pricing. You are being subsidized by the companies using AI.

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

#455

Post by stego-tech »

thundergolfer wrote: post #373

> That means each employee's AI spending cap is ~11% of that median compensation package. Probably better to use the fully-loaded cost of the engineer, which is much higher than their compensation package. The fully-loaded cost is the total cost paid for the labor power of the engineer, and it includes big ticket items such as office space, food, equipment, insurance, payroll tax, fringe benefits, recruiting costs. I…

It’s also worth noting that’s the peak benefit. Expect most engineers to not hit those limits on the regular (if at all, since limiting this puts skills in focus again), and that limit to come down over time as the easy processes are automated and humans are re-tasked with harder problems relative to their TC.

This is not a good bellwether for the AI industry, including its adherents. Their growth assumed a level of indispensability that’s not being reflected in hard numbers and real costs, which lends credence to the notion that these IPOs being fast-tracked are meant to try and cash out before the bubble really pops in earnest. There’s no way consuming enterprises are going to pay such insane costs for such minimal uplift in the long run, and the AI companies can’t keep offering subsidized tokens via subscription plans at their current pricing.

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

#456

Post by pchristensen »

gravypod wrote: post #404
jmtulloss wrote: post #378

Earlier quoted context omitted.

Is your argument that $1500 / mo is too much? Why would the engineering team not be more rigorous in their model selection given a constraint?

If you had a business task to complete that was only possible with ai and it cost you >$1500/month of work, how long would you have to delay the task so that it's cheaper long run to buy hardware and do local models? $1,500/mo * 14 months = $21,000. If local models are 14mo behind as many in HN say it may be profitable to just wait. Maybe just spend a few hundred dollars of your tokens and buy hardware piece by piece…

There's a lot of opportunity cost to waiting 14 months to build something.

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

#458

Post by al_borland »

andix wrote: post #432

It finally puts a number on productivity gain of engineers with AI. This is probably less than 10% of the cost of an average uber developer. So they don't assume much more productivity gain from AI than 10%. (Cost of an employee is much higher than their salary, it includes things like office space, supporting structures like HR/accounting, insurance, hardware/software, and much more)

But is it an accurate number? Does AI reach diminishing returns after $1,500/month, or is that all they are willing to risk/burn to stay in this game?

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

#459

Post by ransom1538 »

thundergolfer wrote: post #373

> That means each employee's AI spending cap is ~11% of that median compensation package. Probably better to use the fully-loaded cost of the engineer, which is much higher than their compensation package. The fully-loaded cost is the total cost paid for the labor power of the engineer, and it includes big ticket items such as office space, food, equipment, insurance, payroll tax, fringe benefits, recruiting costs. I…

"$330k/year" Lol. I thought I clicked on hacker news 2022.

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

#460

Post by jujube3 »

dofm wrote: post #313
jujube3 wrote: post #290

Earlier quoted context omitted.

It's cope. People desperately want to believe that AI coding is going away so that they can go back to partying like it's 2020. So there's a huge number of HN posters claiming that the price of tokens will go UP over time rather than down (that's how Moore's Law works, right???) or that code bases that AI contributes to will spontaneously combust, or something.

I don't think it is unreasonable to say both will happen, is it? In the long term, tokens will fall in price. Obviously. (If "tokens" continues to be the unit) In the short to medium term, for the IPOs to succeed, people have to start actually paying for what they are using, so the price will go up, and is going up, quite a lot. Once their value is set they will slowly fall from that point (or some point maybe halfwa…

I mean, there's an "enormous incentive" for people to run their own data centers rather than using AWS. And yet, cloud is growing and on-premise is shrinking.

While I hope local AI continues to exist, I'm skeptical that it will take over, for the same reason running your own servers hasn't taken over. It's just hard, and involves spending huge sums of money up front.

It's also not really clear how much tokens are being subsidized. The discussion reminds me of Uber. For years people on HN claimed that Uber was going to collapse once they ran out of VC money. Then... that never happened, and everyone just moved on to discussing other things.

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