The online crowd harping on about Chinese models is disconnected from reality imo.

I won't use a Chinese model. Why would i bother? I pay $100/m for the frontier model, understanding it's marginally better than much cheaper alternatives. I get so much value from the product it's not worth shopping around

Think of it like apple and android. Plenty of people pay 2k for their iPhone every few years when android at 1/4 the price is just as functional. Why? Because they get so much excess value from the device it's not worth shopping around. For most people it's their only personal computer. From booking airfare, to filling out their kids permission slips, it's a device they use 10+ hours a week. They don't bother, until a paradigm shift happens and something is 10x better than the iPhone. I imagine llms will follow the same trajectory

100/m for a subscription is a lot of money to most people. Like people who don't have a SWE salary.

You aren't paying API prices. Anthropic (or OpenAI, SpaceX, etc) are almost certainly losing money on your subscription. How long they'll be able to continue to subsidize your usage is an open question, but they definitely won't be able to do it with everyone (currently, their solution is to make enterprise users pay per token, but that might change). What that means is that for the customers that the frontier labs need to be profitable, going with a closed weight provider isn't "marginally better intelligence for marginally higher (or even lower) prices" but "marginally better intelligence for much higher prices".

Yeah. People have very strange ideas about competition and choice and moat. If all you needed to unseat the entrenched was a competitor then Bing would be going toe to toe with Google, and Edge with Chrome. They have a billion+ devices they can stick those options as defaults and still nothing. There are many examples.

People are naturally sticky. If they're satisfied with a product, they'll stick around unless something comes along that is so much better it gets people talking. Open AI's 1B+ customers won't give a shit about Chinese models. Enterprise customers won't move to Chinese models, especially just to save money. They are a non issue, especially if the M.O is just going to be playing catch-up.

You are not the real consumer though. The real consumer is API, inside of products ingesting vast amounts of data at scale.

My last role swapping from Haiku/Sonnet to GLM dropped costs by 90-95% and increased quality.

Money talks.

At $100 / month (or $1200 / year) it may not be worth it, for you. But many of us would be spending a (large) multiple of that and then thinking about how much you spend, where you spend it and who you spend it on can make a big difference. For companies there are other considerations at play as well, for instance trust.

First off, $2k is the price of the new iPhone Duo. Suggesting that that is basically the same thing as a $500 Android phone is... strange.

But also, I don't think you should use individual consumer behavior as a proxy for how the overall LLM market behaves. Current estimates are that individual users represent a pretty small share of overall genai revenue. Most of it comes from enterprise contracts. Those might be more price sensitive because the CFO gets a say in which vendor they choose.

For a couple years now I've been accustomed to choice of foundation model being a heavily scrutinized design decision because it's just about the easiest way to manage COGS. I can certainly imagine scenarios where, given the option to pay 1/2 as much in inference costs but with a 5% reduction in output quality, the boss would say, "Nah, that's a bad deal." But I have yet to encounter one in the wild.

But if you’re a heavy user you’re probably paying $100 for something that costs $1,000. Hence Anthropic’s problem. If they charged real prices to the masses the massses would flee.

Because the $100/m fee they're charging is only there because Chinese models will undercut them if they try to raise it further.

There's been a headline circlulating lately: 80% of Anthropic's revenue comes from 1% of their customers. The $100/mo or however much individuals are paying doesn't seem to be material.

I spend extra on a smartphone because I use the thing all the time, see it all the time, hold it in my hand all the time, it's my camera, music player, note taker and so on.

For AI? Prompt comes in, tokens come out. The value of the 'ecosystem' is roughly zero to me. Switching costs between models are essentially zero. The UI and UX is the same whichever LLM runs underneath.

If you do use llm some, then the $20 tier makes sense, but that's not where the money is. If you use it a lot then a $100 sub probably makes sense. But if you're a BigCo that heavily uses it and pay API prices and suddenly you pay $200 million a month, well, maybe it's worth buying a bunch of hardware and stick it in a basement somewhere, and you won't upload all your secrets to your future competitor to boot. If US labs didn't care about the competition from Chinese models they wouldn't lobby so hard for banning the evil, unaligned, super dangerous communist models that want to steal our freedoms and make our gas expensive.

Ultra-cheap models like Deepseek are also very nice if you need to burn billions and billions of tokens.

I was playing around with OpenCode on Omarchy over the weekend, working on my Android app, and was struggling to spend a single dollar with DeepSeek. The quality difference from the frontier models I use at work was hardly noticeable (where I typically rack up at least a few hundred dollars per month).

LLMs are not a luxury brand that individuals buy. Companies are always looking to save money. And their enterprise consumers are all developing their own models, so idk where you are getting this "analogy" from.

When the chinese or any other party releases a model that is Opus 5.5 level, there might be a shift to other providers as especially people in the EU are trying to get rid of their dependency on american stuff.

Your opinions do not reflect the market and the motivations of its participants.

Competition is the only reason you can pay 100$ a month for like 4000$ worth of API credits.

Consumer AI is going to be paid with privacy, not money. CFOs don't pay 2k iPhones for their employees.

That's a great way of putting it and something I have come to realize as well. I'd rather just pay for the frontier model if I trust that it is indeed at the frontier and works reliably. Same with the iphone.

"I am spending a provably untenable amount for a services that will have to degrade to meet my price point, the cheaper options and processes are beneath me"

The $100/month guy for inference isn’t the prize. It’s the thousands of companies spending millions/month.

It’s not unusual for someone to spend $5k in a week. 2 guys at my place just spend $150,000 over 3 months building out a factory.

We are aggressively exploring open weight models now.

It's really marginally better and in some cases actually worse. If 100 dollars is throwaway money for you, and prices don't increase sure why switch. For heavier users, and for people with less money(most of America is struggling with bills and food) it's not attractive at all.

> Why would i bother? I pay $100/m for the frontier model, understanding it's marginally better than much cheaper alternatives. I get so much value from the product it's not worth shopping around

Wait until you are forced onto an enterprise plan...

The LLMs don't have the moat that Apple has. Apple has carefully built their walled garden to keep people in. Their messaging, their cloud services, their media store, it all keeps users in.

LLMs don't have that. For at least 90% of users, the model in the back end is completely irrelevant to them. Switching to Kimi won't lose them their iTunes music.

You won’t use a Chinese model, and I won’t either. But both of our bosses have much higher incentives than we do to routinely shop around, and unlike us they can convince an Anthropic sales rep to give them a discount.

Anthropic doesn't care about sub users. At all. The real target is pay pig enterprises that give their employees access to the API and allows them to go buck wild spending $1000 on fable in a day.