Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

AI subscriptions are a ticking time bomb for enterprise

thestateofbrand.com

Post reply on HN
Print view View original

91–100 of 426 posts

Re: AI subscriptions are a ticking time bomb for enterprise

#91

Post by GolfPopper »

HarHarVeryFunny wrote: post #71
Sharlin wrote: post #18

I think I'm going to puke if I see one more "It's not X. It's Y." phrase or the word "load-bearing" used metaphorically.

I guess the good news may be that if/when there is a major pricing correction, that many of the people using free or $20/mo subscriptions to generate social media commentary may balk at the real cost and go back to writing it themselves. One can at least hope.

>if/when there is a major pricing correction

Github Copilot moves to usage-based billing in two weeks.[1]

1. https://github.blog/news-insights/company-news/github-copilo...

Re: AI subscriptions are a ticking time bomb for enterprise

#92

Post by airstrike »

adamgordonbell wrote: post #87
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.

Or put another way, the frontier models are very quickly deprecating assets, because of the competition in the market. They have to keep getting better to stay ahead of each other and open weight. Which means it's the opposite of a timebomb, the article has it completely backwards, tokens at current level of reasoning will continue to get cheaper. I'm not sure 'local' will be the end state, as hardware needs are high…

Well, it's a timebomb for the companies who get paid per token, so the parent is right and TFA is probably wrong

Re: AI subscriptions are a ticking time bomb for enterprise

#93

Post by airstrike »

shimman wrote: post #69
JumpCrisscross wrote: post #64

Earlier quoted context omitted.

> There are trillions invested to recoup and at most billions in sales. It doesn't add up to tokens making a profit any time soon But this isn't "a ticking time bomb for enterprise." It's an issue for the AI companies' investors.

Good thing the entire nation's economic growth outlook isn't tied to these companies then. For a second I thought we had a potentially dangerous situation on how we misappropriated trillions of capital.

For anyone doubting this, total private investments in the US grew 2% in 2025 relative to the prior year, adjusted for inflation.

But within that big pie, the "IT-related" investments grew 15.7% whereas non-IT actually shrank 2.0%.

Re: AI subscriptions are a ticking time bomb for enterprise

#94

Post by kddkkdisis »

JumpCrisscross wrote: post #65
mpalmer wrote: post #46

Earlier quoted context omitted.

it’s highly unlikely OpenAI/Anthropic are not making decent amounts of money from inference. Based on what ? Why are we all whispering about how profitable all this is? It is the absolute last thing these firms would keep secret.

> Why are we all whispering about how profitable all this is? Nobody is whispering about anything. Everyone is loudly assuming what's convenient for their thesis. Even if you have access to the books, the accounting isn't straightforward–there are yet insufficient data for a meaningful answer. > It is the absolute last thing these firms would keep secret If you find an optimisation strategy that you don't think your…

[dead]

Re: AI subscriptions are a ticking time bomb for enterprise

#95

Post by airstrike »

alkyon wrote: post #78
JumpCrisscross wrote: post #64

Earlier quoted context omitted.

> There are trillions invested to recoup and at most billions in sales. It doesn't add up to tokens making a profit any time soon But this isn't "a ticking time bomb for enterprise." It's an issue for the AI companies' investors.

Not really, because investors will sooner or later want to see real returns on what they invested. Tokens are suddenly not dirt cheap and enterprises are screwed. It's like selling dope, once they're addicted, a dealer could turn the screw on them

Not if they IPO and some other sucker buys the stock.

Re: AI subscriptions are a ticking time bomb for enterprise

#99

Post by nijave »

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

Eventually, we'll see. Frontier models still need some pretty serious hardware which will slowly come down in cost. Smaller models are becoming more capable, which will presumably continue to improve.

I think there's still a pretty big gap, though. Claude estimates Opus 4.6 and GLM-5 need about 1.5Ti VRAM. It puts gpt-5.5 around 3-6Ti of VRAM.

That's 8x Nvidia H200 @ ~$30k USD each. Still need some big efficiency improvements and big hardware cost reduction.

Re: AI subscriptions are a ticking time bomb for enterprise

#100

Post by mrweasel »

malshe wrote: post #77
returnInfinity wrote: post #3

Brad Gerstner confirmed that tokens aren't being sold at a loss. Whatever the formula, API + Subscription split, the companies are making a profit on net token sale. They maybe running at loss after all the salaries and stock comp, but tokens are in profit now.

In other words, AI companies have positive earnings before expenses

"We'd be making money if we didn't have to manufacture the product", something like that?
Post reply on HN