The costs are exorbitant and most software is not produced by companies with such a huge moat. Anthropic made a profit through their recent bait amd switch pricing. There is zero useful insights online to indicate whether this might die due to commoditisation with good enough open models or fail the race to get more people subsidising unsustainable growth with other people’s money. Who knows? In any case they dont seem to be able to drop usage costs so the business model seems based on wishes

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j_w 3 hours ago | parent | next [-]

Continuing with your skepticism:

> Stories are circulating of companies surprised at how expensive their LLM bills are becoming from usage by their staff

> Enterprise customers are now paying API prices

How long before enterprise customers start to question the bill? Anthropic goes from not making money to doing pricing shakeup, and now they are making money and the biggest spenders are shocked at prices.

Seems like things are still very uncertain.

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brokencode 3 hours ago | parent | prev [-]

Usage costs will come down with better hardware. Hardware is improving rapidly each generation.

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eikenberry an hour ago | parent | next [-]

Costs will plummet as better hardware becomes available and priced reasonable so that people can more easily run their own open models locally. But that won't help Antropic/OpenAI make more money, quite the opposite.

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simonw 3 hours ago | parent | prev [-]

That trend held true for the past three years, but it doesn't feel as safe to me now.

But memory costs are going way up. And both OpenAI and Anthropic bumped up the price of their frontier models in April.

	▲	brokencode 2 hours ago \| parent \| next [-]
		Yeah, it’s called supply and demand. Demand for memory went way up suddenly. Now supply is going up rapidly as companies try to cash in on that demand. Supply will eventually catch up with demand. Then the prices will come back down.
	▲	StrauXX 3 hours ago \| parent \| prev [-]
		Algorithms are also improving. I believe it's very unlikely for these two improvements together to not result in one to two orders of magnitude cheaper cost per "intelligence". Of course, that might just make use cases that are too expensive today viable and thereby increase usage further.