Comment by mlinsey
2 hours ago
You're observing that:
a) effective price-per-token is rising b) there is insufficient compute to meet the demand.
And your conclusion is that the industry is circling the drain and due to collapse?
2 hours ago
You're observing that:
a) effective price-per-token is rising b) there is insufficient compute to meet the demand.
And your conclusion is that the industry is circling the drain and due to collapse?
They are different observations, I think, though the phrasing confuses it:
a) cost per successful task is rising — eg claude max allocation is functionally shrinking
b) is there enough potential cost reduction in the queue to make up the gap
c) if open models converge on a more efficient but slightly-less capable point (which has effectively happened) what is the actual moat?
Yes, cost per successful task is rising - ie, we are all paying effectively more for AI.
And yet - Anthropic is still struggling to have enough capacity to serve demand - they are virtually sold out.
And yes, are almost-as-good open models, on part with the closed models from 6 months ago (at worst), that are just a single Openrouter API call away, and yet Anthropic is still selling out. So people are paying for the premium product anyway, for whatever reason - maybe the last bit of intelligence is worth it, maybe they like the harnesses/products around the models, maybe it's a brand/enterprise sales thing.
Put aside your feelings about the AI industry and imagine we are talking about thingamajigs. Prices for thingamajigs are going up. They are still selling out about as fast (or faster) than the company selling them can build factories. There are more cost-effective competitors already in the market, but thingamajigs are selling out anyway.
Would you, looking at the thingamajig industry, conclude the "jig is almost up"? That "the returns aren’t anywhere close to what investors expect" and that the impending IPO is all some desperate hail mary to save things before the collapse?