Anthropic co-founder on cutting access to Windsurf

Post by selcuka » Fri, Jun 06, 2025, 2:31 AM UTC

artdigital wrote: post #41

HyprMusic wrote: post #37

This feels like a cheap trick to drive users towards Claude Code. It's likely no coincidence that this happened at the same time they announced subscription access to Claude Code. The Windsurf team repeatedly stated that they're running at a loss so all this seems to have achieved is giving OpenAI an excuse to cut their 3rd party costs and drive more Windsurf users towards their own models.

> This feels like a cheap trick to drive users towards Claude Code How did you come to this conclusion? It’s very much like he remarked: OpenAI acquired Windsurf, OpenAI is Anthropics direct competitor. It doesn’t make strategic sense to sell Claude to OpenAI. OpenAI could train against Claude weights, or OpenAI can cut out Anthropic at any moment to push their own models. The partnership isn’t long lasting so it doe…

Post by what » Fri, Jun 06, 2025, 2:35 AM UTC

jsnell wrote: post #30

raincole wrote: post #19

Earlier quoted context omitted.

> The model providers are not in the low margin part of the business. Many people believe that model providers are running at negative margin. (I don't know how true it is.)

Yes, many people believe that, but it doesn't seem to be an evidence-based belief. I've written about this in some detail[0][1] before. But since just linking to one's own writing is a bit gauche and doesn't make for a good discussion, I'll summarize :) 1. There is no point in providing paid APIs at negative margins, since there's no platform power in having a larger paid API share (paid access can't be used for trai…

Post by brookst » Fri, Jun 06, 2025, 2:37 AM UTC

princealiiiii wrote: post #8

Any app built on top of these model providers could become a competitor to these providers. Since the model providers are currently in the lowest-margin part of the business, it is likely they will try to expand in to the app layer and start pulling the rug from under these businesses built on top of them. Amazon had a similar tactic, where it would use other sellers on its marketplace to validate market demand for p…

Post by brookst » Fri, Jun 06, 2025, 2:38 AM UTC

jsnell wrote: post #14

princealiiiii wrote: post #8

Any app built on top of these model providers could become a competitor to these providers. Since the model providers are currently in the lowest-margin part of the business, it is likely they will try to expand in to the app layer and start pulling the rug from under these businesses built on top of them. Amazon had a similar tactic, where it would use other sellers on its marketplace to validate market demand for p…

The model providers are not in the low margin part of the business. The unit economies of paid-per-token APIs are clearly favorable, and scale amazingly well as long as you can procure enough compute. I think it's the subscription-based models that are tricky to make work in the long term, since they suffer from adverse selection. Only the heaviest users will pay for a subscription, and those are the users that you e…

Post by brookst » Fri, Jun 06, 2025, 2:42 AM UTC

what wrote: post #53

jsnell wrote: post #30

Earlier quoted context omitted.

Yes, many people believe that, but it doesn't seem to be an evidence-based belief. I've written about this in some detail[0][1] before. But since just linking to one's own writing is a bit gauche and doesn't make for a good discussion, I'll summarize :) 1. There is no point in providing paid APIs at negative margins, since there's no platform power in having a larger paid API share (paid access can't be used for trai…

There are more factors to cost than just the raw compute to provide inference. They can’t just fire everyone and continue to operate while paying just the compute cost. They also can’t stop training new models. The actual cost is much more than the compute for inference.