Comment by safety1st

Yes 100% this. A lot of people keep talking about how OpenAI and Anthropic will need to raise their prices. What is less discussed is how they CAN'T raise their prices because competition exists, and sure it's not SOTA, but it's literally an order of magnitude cheaper in many cases and the drive to figure out how to make it work well enough is going on right now (and will only intensify when the SOTA models raise their price).

It's a given that the SOTA models need to raise their prices. It's also a given that they can't. The more they raise the more customers will move to their competition.

So what happens next? Well I think it will suck horribly if you can't move off of SOTA sooner or later, because the Big Two are going to lose customers, and therefore have to raise prices on the locked in customers even more than these projections suggest.

Beyond that if you're looking to start a business, figure out how to use cheap models in new scenarios. Build software which does that and license it. This is kind of contrary to the idea that you shouldn't over optimize for deficiencies in the models that will likely go away in the next generation - for instance a lot of problems were solved when context windows got way bigger. So it's a thin line to walk but I think it's there because a lot of orgs are using Claude today for pretty basic tasks.

The dev who's addicted to SOTA models honestly is going to have to settle for less or get totally screwed. Most applications within business from what I see aside from complex research do not require SOTA. They summarize, they classify, they transform, and doing that accurately has been cheap for a while.