Remix.run Logo
gizmo686 2 days ago

ChatGPT (and all high end players in the current AI iteration) do not follow the normal laws of software economics.

Normally software has a near 0 marginal cost. This allows sellers to offer steap discounts because they cost the seller almost nothing. In many cases, sellers are better off having you use their software without paying instead of not using it; because they are out almost no money, but have increased their odds of a future sale

High end LLMs are different. Sellers are not setting their price to maximize revenue. They are setting their price to cover the marginal cost of providing the service plus margin.

Lowering their price is not a matter of price discrimination. It is a matter of engineering a cheeper product.