| ▲ | The Unbearable Cheapness of Open Weight Models(jamesoclaire.com) |
| 51 points by ddxv 6 hours ago | 22 comments |
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| ▲ | Jackobrien an hour ago | parent | next [-] |
| The giants knew this was coming, and soon 95% of AI tasks will be able to be done by open models (coding, research, cowork style work). So why pay a premium? Why use them at all? This leaves the labs with two options: 1) push the frontier in a way only massive scale can, and cash in on it (mythos level cyber security, recursive training, frontier science work). There’s big money for never before possible capabilities. 2) own the app layer with their edge in reputation and powered by their infrastructure. Be apple where everyone else is Linux. Do design, coding, research, SMBs, legal, finance, healthcare and more (they are doing all of this). Will it be enough to justify a Google level valuation? We’ll see how fast they can push it. |
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| ▲ | fredley 8 minutes ago | parent | next [-] | | 3) Buy all the RAM, increasing the barrier to entry to push back the tide a bit, in time for a juicy IPO. | |
| ▲ | ed_elliott_asc 31 minutes ago | parent | prev | next [-] | | Won’t all they need to do is say “best in class, latest models, fastest” and wine and dine a few execs and those enterprise deals will be signed? In this case the people tasked with using the product won’t actually mind. | | | |
| ▲ | sofixa 11 minutes ago | parent | prev [-] | | > own the app layer with their edge in reputation and powered by their infrastructure. Be apple where everyone else is Linux. Do design, coding, research, SMBs, legal, finance, healthcare and more (they are doing all of this). The problem with this is that there are incumbents in all those spaces doing their own AI agents / platforms, and they're the ones choosing the models they use internally and they sell to their own customers. The margins and the possibility to fine tunie using open weight models, as well as the guarantee they'll keep running at predictable costs (no US orders yanking access), make them a very appealing option. And if you're a company that needs an AI powered legal software, would you buy it from OpenAI/Anthropic, or from someone who you've already bought legal software from before and has the domain knowledge? |
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| ▲ | arthurofbabylon 32 minutes ago | parent | prev | next [-] |
| Let's imagine that Anthropic/OpenAI fail to manufacture scarcity by villainizing Open Weight models (a sincere probability). What is left for these corporations to prop up their prices, or any margin at all? I expect scaffolding around tool use, supporting bespoke implementation and driving risk down for institutional adoption. (They might even build an insurance tool to protect accountants/lawyers from errors in compounded probabilism!) A question for economists... It seems plainly clear to me that information and information processing is commodifying (for the first time in human history?). Without the age-old bottlenecks at the top of the value chain, capital will surely flow downwards, right? |
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| ▲ | ddxv 22 minutes ago | parent [-] | | OpenAI, though they seem to backtrack it lately, have been slowly pushing forward of their launch of ads which would be a supplemental way to support cheaper use of their models. This is currently not as great a fit as the modern day banner ads, but it will be interesting to see where they go with that. |
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| ▲ | linzhangrun 3 hours ago | parent | prev | next [-] |
| It would not be surprising if GPT and Claude get cheaper too as inference gets cheaper. Two years ago, o1 was the strongest model and cost much more than Fable, while being nowhere near as smart as a Qwen 3.6 35B that you can now run on a DGX Spark without much trouble. |
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| ▲ | ddxv 2 hours ago | parent [-] | | True, outside of the dark tactics I imagined in the article, they will have to compete at lower costs. It's just that the current iteration does not feel cost competitive yet. |
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| ▲ | arikrahman 2 hours ago | parent | prev | next [-] |
| With cache hit rates being effectively free, harnesses like Reasonix have let me do a month of work for less than 2 dollars. It's not even the subsidies making it cheap, American providers like Digital Ocean or Cloudflare host the same model with similar pricing. |
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| ▲ | my-next-account 17 minutes ago | parent | prev | next [-] |
| I wonder whether Oracle is going to go bankrupt because of this |
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| ▲ | odie5533 2 hours ago | parent | prev | next [-] |
| This is what concerns me about how AI giants are planning to make money. Their product has already been commoditized at prices which for them are still subsidized to grab market share. Unless the giants invent a technological leap, their prices are going to be dragged down by open weight models and I don't see how they'll turn a profit. |
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| ▲ | Jimega36 an hour ago | parent [-] | | Reach AGI to leapfrog whoever is behind. Burn everything to get there faster. | | |
| ▲ | odie5533 23 minutes ago | parent | next [-] | | If Anthropic announced AGI tomorrow, how much better would that model be than Fable 5? It's looking like the road to AGI is gradual and moat-less. Models seem capable of improving other models, and even without illegal distillations many are nipping at the heels of Anthropic. | |
| ▲ | jorisw an hour ago | parent | prev [-] | | 'Reach AGI', the same way SpaceX will put data centers in orbit. A pipe dream. | | |
| ▲ | ben_w 17 minutes ago | parent | next [-] | | I'm currently writing a blog post about data centres in orbit, and my current conclusion is that even though they can build one, they definitely can't put 1 million up there and would have better things to do if they could. AGI? Too loosely defined. They lack a lot of competences which humans recognise when we see them but find it hard to put into words; on the other hand what they can do already do faster than any human (and have greater bredth than any single human, but this usually doesn't matter because "coder" and "economist" and "translator" gets solved in human teams by hiring three people). I do not think current ML has the tools to solve for quality. But we know it's possible for a really mediocre intelligence to make human level intelligence, because evolution made us, so I for me the question of AGI is more a practical one: is it affordable? (I also think not at the present time, but that's an "I think" not "I am analyzing it carefully"). | |
| ▲ | NitpickLawyer 16 minutes ago | parent | prev | next [-] | | > will put data centers in orbit. A pipe dream. Cheap access to space was once a pipe dream. Reusable boosters were once a pipe dream. A new player beating Boeing to the ISS was once a pipe dream. LEO constellations were once a pipe dream. Launching thousands of satellites was once a pipe dream. You should know that a) they are already running "AI" chips on their current sats. and b) they are already producing kW of power on orbit and have ~10k sats on orbit. You can watch Scott Manley's video on it, where he does some rough calculations and explains the overall architecture. There is nothing stopping them to do this, from an engineering perspective. If it makes commercial sense, that's another question, but 5-10-20 years in the future things might change there as well. | |
| ▲ | chpatrick 10 minutes ago | parent | prev [-] | | I think it's such a vague term. If you showed someone in 2010 what we have now they would say it's science fiction. |
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| ▲ | surgical_fire 17 minutes ago | parent | prev [-] |
| One thing it doesn't even mention is how good those models are. Evet since I moved to DeepSeek I had zero regrets. It performs exceptionally well. I honestly prefer it to ChatGPT (or Claude that I use at work). I never used Fable, maybe it is that much better. DeepSeek has no problems with the workloads I give it though - if it only keeps marginally improving with each interaction I don't see myself needing to come back. |
