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Comment by svnt

5 hours ago

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?

4 comments

svnt

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mlinsey  4 hours ago

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?

  • svnt  2 hours ago

    I don’t have feelings about the AI industry to put aside. I would not have sufficient information to assess whether thingamajigs are legitimately valuable or whether they are tulips. The only indicator I see is the last point about people using it in the short term despite having access to cost effective alternatives, which actually points to irrationality/FOMO more than legitimate value.

    What we are looking at looks to me like it is rapidly becoming a a commodity: it will become as existential as electricity and water to businesses, and it will be sold and marketed and regulated, more or less like a utility.