Nice try, I ain’t gonna pay anyway
Exactly, I just keep using the free plan and when I finish the amount for the day I just switch to another service
I can’t imagine paying for AI when the open source tools have made it so easy to set up a model locally.
Don’t be daft. The vast majority of people don’t have the knowledge or resources to set that up locally.
Easy to set up, but still needs a 15k $ graphics card and electricity bill. The price you pay openai/anthropic is much cheaper than that for that quality of model.
Sure, you can setup a small model on a consumer graphics card, but the output will be considerably worse and the processing speed considerably lower.
For 240€/year you got a subscription to anthropic which will happily ingest a whole repository and process it in about one minute. No matter what latest model GPU you installed on your computer, you won’t be able to do that.
Sure, this guy was able to run a 26B model on an old CPU: https://point.free/blog/gemma-4-on-a-2016-xeon/
But that was not easy at all and the speed you get is definitely not the same as the one provided for a very cheap price.
I wish that was inversely proportional. The less I pay, somehow it costs them more money.
I wonder how much they spend for every $0 I pay them.
$1000 I would guess. They are just burning money at this point.
I mean, this is no different than Walmart making prices low until other businesses die out and then raising them.
It is no different than police shoving all the homeless people and drug addicts into one area of town to crash the property prices, and then evicting them once developers buy everything for cheap.
They’re purposely operating at a loss in the expectation that they can get ingrained into a ton of workflows, and then gouge everyone absolutely to death while also worsening the quality of the service to make it cheaper for them to run.
If it weren’t so horrible for the environment, I’d kind of like it, because all the dumbass executives that are signing up for this are going to get exactly what they deserve. You’d think they’d recognize a scheme when they see one.
My CEO (whom I don’t consider a particularly good or bad CEO) spent a day playing with AI then when asked if he’d sign the company up with the service he literally laughed in their faces and said it’s useless. I was honestly shocked because he’s totally into buzzword and popular crap. Gained a lot of respect for him that day.
An older co-worker seems to ask AI for help during work, we are blue collar. But the Owner of the company does not seem to use it whatsoever.
I ask Claude on occasion, to see if it will say something smart (it was mostly useless as fuck).
Honestly I think Claude it’s good at programming. Way better than ChatGPT.
But I ain’t going to pay for it.
Published a library doing some very specific data processing. One of the algorithms I implemented was a bit too slow: it would take about a week to process data. I reckon implementation was a little bit sloppy, but I’ve been implementing a bunch of algorithms from research papers and this was pretty much the published implementation.
I asked Claude to analyse the implementation and check whether it could be improved, half an hour later I got a 26,000% improvement in performance with exactly the same results passing all tests.
Of course, I could have done that myself. But optimization had to go down to simd level; I doubt I would have been able to do that in less than a week of work.
Trust me bro we’re so close to profitability bro, just need this IPO to secure funding one last time bro then we’ll be profitable bro I swear.
Oh come on bubble, why won’t you crash already?
Now, I’m no MBA, but that seems like a bad business plan…
What is the actual “cost” after they buy the hardware, is that $1000 really pure power usage cost?
The problem is that the hardware has a 5 or 6 year depreciation schedule on paper, but NVIDIA keeps saying that their next generation chip will be twice as good as their last chip so there is a FOMO schedule of like every two years.
Would be nice to see that used hardware for sale rather than it being junked as a writeoff.
that’s the $84,000 question. They’re filling datacenters with the fastest possible equipment and need it to be 10x faster, That hardware is dinosaur fodder a year after they install it.
I’m curious as well. My knowledge is probably quite outdated, but from what I understood the training part is what’s expensive and then querying the model is pretty cheap. Is it still true (or was it ever) that the generated answers on search engines are cheaper to generate than the actual search results?
I find that hard to believe, I recently had to uninstall co-pilot after it weaseled its way into my search bar. Its not an exageration to say that my PC literally ran cyberpunk 2077 with pathtracting better than it ran the fucking windows search bar with co-pilot.
That’s just a shitty front end interface implementation, it has nothing to do with the actual inference run by the models.
Look at the public numbers, it seems true. Copilot on your taskbar is just windows being garbage, not the AI being bad. Just look at self-hosted AI and measure the power costs of your queries. It’s tiny.
It is sorta. Training is orders of magnitudes more intensive than inference, but we infer billions of times within a model generation.
The author is right and wrong. Its subsidised but not by anthropic. The power users who use their plans to the limit are subsidised by the rest of the users. Im an AI hater but I do think anthropic will be profitable next year. Their revenue growth is insane and looks to just be getting started. Claude code took enterprise by storm and now cowork is out.
no wonder why OpenAI is losing alot of money.
They’ll never earn
Honestly Google is likely to beat openAI and Anthropic as things are.
OpenAI and Anthropic have to buy/rent their hardware from Nvidia, while Google is making their own TPU hardware. Google’s hardware costs on AI is way lower, every dollar they spend on it goes a lot farther.
And unlike the other two, they’re already a profitable company. They’re making record profits right now. They don’t have a desperate need to figure out how to make back billions on their AI models, they can just keep offering Gemini at a comparatively cheap price and wait for anthropic and open AI to bankrupt themselves.
I guess you missed this story from last week: Google To Pay SpaceX $920 Million Per Month For Massive AI Compute Power
That’s definitely costing them more than running it on their own hardware, but it doesn’t mean AI is costing them more than the AI startups. Anthropic for example is already paying SpaceX 1.25 Billion a month for compute, and has agreed to pay Google 200Billion oflcer the next 5 years for access to Google’s compute and TPU chips.
Google’s deal with xAI specifically lets them terminate the deal with 90 days notice after the end of the year. Google is also investing heavily in building new data centers with their hardware. I’m assuming this deal means they’ve eclipsed their current TPU capacity, and are just looking for a short term bandaid until they can catch up with their new constructions.
Anthropic is doing the same too. SpaceX over here providing the shovels and pans for the modern day gold rush, sheesh.
I guess google’s announcement of renting xai compute could have been simply for show to boost SpaceX ipo.
They have big plans to build more data centers for themselves, so they definitely want more compute than the have access to right now. But even if they’re paying more to rent xai compute, they’re still paying less overall for hardware/access than their direct AI competition.
Plus they have a hook with the common folk, the phone steers you toward Gemini (Android phones, obviously, and Apple currently partners with Google for Gemini for iPhone…).
For Claude and OpenAI, you have to explicitly want to go out of your way to use them, or use them indirectly through another service that has a hook.
Claude seems to have some software developers explicitly preferring them, though a alot of the corporate money is on Microsoft and Microsoft leveraged Visual Studio and Github to become the business-friendly frontend, and sure, you can use Anthropic models too… Though Microsoft ultimately has control of what is reasonably available and how much each one costs. Anthropic has a shot but I could see Microsoft pivot to really mess with Anthropic. The one gap in Microsoft strategy is the “native AI” workflow where Claude Code has won hearts and minds, but it uses massively more tokens for frankly marginal or sometimes negative value compared to a more curated use in-editor.
OpenAI I see as the most exposed. Lot’s of data showing they are suffering from people being over the fad of going out of their way to use ChatGPT, especially since their phones have started embracing ‘default’ Chatbot. Software developers that are inclined to use LLM are also inclined to be pretty dismissive of anything other than either Anthropic or open weight models, depending on their inclination. Also Altman seemed the most agressive in committing to spending money they didn’t have, though all of them exhibit this to some extent.
I predict Microsoft ultimately pivots to in-house models and convinces the businesses to go that way. Apple may continue with Gemini or roll their own eventually. Anthropic currently has the stronger position between OpenAI and them, but I think you are right that both have risk of just being left behind.
Claude just kills the other models, it’s not close. Microsoft could ban claude extension from VSC tonight and ill start using command line Claude tomorrow. There’s just no comparison right now. Itd be like Microsoft trying to ban NVidia gpus from Windows, they’ll just lose.
I really really really don’t want evil corporation Google to dominate even more.
I prefer plailny greedy corporations over evil ones
OpenAI and Anthropic aren’t less evil than Google.
They aren’t great, though I do think Google is worse. And far too powerful
Google is only worse by virtue of their reach. OpenAI and Anthropic don’t have the reach yet, but they absolutely will get there given the chance.
Before Google had the reach it has now, it was widely regarded as a comparitive ‘good guy’ and people believed in the “don’t be evil”. Lo and behold once they got going, “don’t be evil” went away.
They’re all evil, so we just have to exploit the ones that offer us some value. If Google is cheaper, and has the ability to damage the others, then Google it is.
Google is shaping up to fare better than the others, but I dont think that means success. They, too, are spending more than its making, just at a less drunken rate than some competitors.
Good thing I don’t personally pay them anything
Oh, you are going to pay. The bubble is going to fuck us all quite thoroughly.
Exactly, these companies will keep leveraging more and more because they know the govt will step in and print whatever number of trillions of dollars needed to fix the accounting. Then they’ll tell us “core” inflation is only 2.8%.
It’s gonna come crashing down pretty soon. It’s gonna hurt all of us. It won’t hurt the people responsible nearly enough.
pretty soon
people have been saying that for some time though
The thing is this really depends on the speed of some financial events, not some technical failing.
Notably, if OpenAI has to cancel any of their commitments to buy hardware because they find they have neither the money nor can secure even more debt to cover, that event would potentially cause the bubble to pop, even for hypothetical companies that may have been more responsible and might have a viable business approach. Those commitments are coming up, and a lot of analysis struggles to see how they will fund those commitments.
The thing with this bubble is that the investors don’t get the nuance and will flee at signs of trouble in any of OpenAI, Anthropic, or a handful of others, and Altman’s leadership has made trouble at OpenAI very likely, but the investors don’t believe it and won’t believe it’s unique to OpenAI, even if it would be.
The bubble will pop, I think a lot of people are just baffled by how big it’s getting.
What people? All the credible people I read say that things fall apart Q2/Q3 2027 as debt and profit obligations are due.
The only thing that changed is now there is an energy crisis coming, so it’s possible that might force the bubble to pop sooner if all the systemic risk aligns.
reminder than during 2019 there were streaming services popping left and right, all showing tremendous growth because they started from zero, and articles were about how bad Netflix was doing due to having practically no growth compared with the competition (they already had a massive subscriber base). Twist? Netflix was the only streaming service that was actually making a profit, the rest were a massive loss but big growth.
Needless to say most of those streaming services died; who remembers DC streaming service, or Yahoo’s? While Netflix is basically as stong as ever, despite the prevalent enshitification happening through the whole industry.
Point of the story? shareholders don’t care about stable profitable business, only cancerous growth. AI is like that, zero profits, ton of cost, but as long as they show growth the shareholders are happy, regardless of how cooked the books are.
2019 Yahoo
My immediate thought, there is no way Yahoo! Screen survived into 2019.
I looked it up and Yahoo! Screen (which featured Community season 6) was shutdown in January 2016. But Yahoo! View launched in late 2016 (as a Hulu-like replacement), and that did shutter in mid 2019.
So Yahoo! was already dead, but it also died for real in 2019.
Imagine having a streaming service so bad it fails twice
Isn’t that kind of Yahoo!'s business model?
Actually, when Yahoo was the search giant, before Google went mainstream, they were pretty damn good at what they did.
With how shit Google is these days, I kinda wonder if Yahoo could dust out their search engine from two decades back and it would just be… better.
Netflix was also late to streaming because their mail service subscriptions were THE major player
Late to streaming? Netflix was the first big time streaming service that I ever heard of. The main reason their streaming service was able to take off like it did is that nobody else of significance thought that streaming was worth pursuing. What other companies were offering streaming services at anything approaching scale before Netflix?
YouTube and Hulu were basically all starting about the same time. But RealPlayer was the first big one.
Netflix just had the layout that everyone uses now. The Cable networks had streaming services, just not on demand. YouTube and Hulu also pioneered the on demand layout. YouTube focused on personal experiences so maybe that’s why you’re forgetting them
YouTube started in 2005, but was not really a “streaming service”, it hosted random internet posted videos. The concept of engaging with the big content rights holders wasn’t remotely in sight back then.
Hulu came out a year after Netflix started streaming, by about a year. Hulu was inspired by Netflix’s move to have actual traditional media content as a streaming service instead of ad-hoc video uploads like youtube.
RealPlayer offered technology for websites to provide videos, they themselves I don’t recall being a streaming platform in and of itself.
Whatever one may say about Netflix, they were right there in the beginning with streaming traditional, professional media content. Yes, video playback over the internet wasn’t new, but that’s a technical detail that enables, but is not the core of the “streaming service” business model.
late to streaming, but practically the first subscription based system to watch movies/tv online.
First years of Netflix were the best, the product began degrading quite early on. but that was mostly companies realizing that instead of licensing their content on Netflix, they can make their own platforms.
I think people forget that there is also the problem of being “too early” where people or the technology isn’t ready yet. Netflix timed their entry perfectly.
There are so many defunct websites or businesses that no one has ever heard of that were precursors to modern day services we view as conveniences.
it’s not about being the first, just the first one when the technology/cost are just right.
who remembers DC streaming service, or Yahoo’s?
Quibi will always have a place in my heart. Or, at least, my golden arm
