Comment by ChrisMarshallNY
2 hours ago
I'm of the opinion that the market will need to expand, horizontally. That's what's happening, with low-cost LLMs. I already know lots of "regular folks" that are totally hooked on LLMs (mostly ChatGPT, at the "regular mensch" level). They usually use the free tier, but a lot of them are doing the $20/month Pro tier.
If anyone is in my age group, they remember when ATMs were free. It was the "heroin dealer" business model. It worked out well (for the banks). The Chinese did it with manufacturing.
Getting people hooked on subsidized junk, is an age-old (and highly effective) business model.
Think of all the shops that will soon be composed of people that simply can't even get out of bed, if their LLM is not available. If the LLM dealer starts raising the price, there's no choice. I suspect many of the valuations are taking this into account.
> "Junk is the ideal product... the ultimate merchandise. No sales talk necessary. The client will crawl through a sewer and beg to buy."
-William Burroughs
LLMs are rapidly becoming commodities with open weight and Chinese models. Frontier providers won't be able to raise prices forever, indeed we already see evidence of decreased prices from such competition.
And ATMs can be free still, if you use a bank that refunds all worldwide ATM fees, such as Charles Schwab.
The commodity is not in the LLM but the tokens.
Anthropic's offerings are vertically differentiated. However from an economical stand point, it also be true that they are not the preferred option for many.
> Think of all the shops that will soon be composed of people that simply can't even get out of bed, if their LLM is not available.
I'm biased because I don't use AI, but I don't understand why you wouldn't fire these LLM-addicted people and replace them with people who can code or write an email without the use of an AI assistant.
They won't. They'll just pay more for the LLM.
I use LLMs all the time, but I'm also a highly capable and experienced engineer that can definitely work without. I have just found that the LLM is a force multiplier, like I haven't had before.
Same, though the types of jobs I’m working on now require the speed I get from LLMs. If I had to take my current projects and switch to hand-coding I’d have to extend the timelines and practically add a zero to the price.
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