This is market introductory pricing that hasn't factored in cost recovery. Most of it has been run on early investment with the assumption they will recover costs in the long run. The prices are subsidized across the board and they will need to go up signficantly to recover them.

▲

swiftcoder 10 days ago | parent | next [-]

Assuming this were accurate, then presumably the AI companies would be betting that inference costs come down before the bill is due - I don't see enterprises being willing to absorb another ~10x price increase for tokens (as they've just done going from subscription prices to per-token pricing)

▲

LurkandComment 10 days ago | parent [-]

For claude shops this was a huge hit. But lets back this up. There are some companies that haven't even built a break-even model at this price because they are funded by investment. As soon as those investors lose patience the first dominos will fall. For those who have somewhat of a business model, will it survive a price increase? The bigger question is do the base model providers have enough runway and have a way to keep going as they need to recover costs.

▲

pqtyw 10 days ago | parent [-]

It's mostly R&D though, not inference. If LLM's effectively become a commodity then they are screwed anyway.

	▲	swiftcoder 10 days ago \| parent [-]
		Aren’t the Chinese labs quickly turning them into a commodity? The open-weight models will have a steady race to the bottom on inference costs just by dint of competition between providers. They aren’t at the frontier yet, but they are rapidly eating the flash market.

▲

pqtyw 10 days ago | parent | prev | next [-]

Yeah, that's not going to work if you can get e.g. 80% of value by using 10-20x or more cheaper open models. At some point it would just make sense for large companies to rent compute and deploy their version of DeepSeek or whatever (if they don't trust Chinese providers)

▲

logancbrown 10 days ago | parent | prev [-]

None of what you said is true

▲

rimliu 10 days ago | parent [-]

And you know this how?

	▲	logancbrown 4 days ago \| parent [-]
		Burden of proof is on you