Comment by 0xbadcafebee
4 hours ago
That still isn't the whole story. Compare DS 4.1 Flash [1] to GLM 5.3 Flash [2], and consider the effective price. DS's price is lower than GLM on input tokens, but higher than GLM on output tokens. Output price is an order of magnitude higher than input price. So for output-heavy workloads and long reasoning, DS costs more than GLM.[1] https://openrouter.ai/deepseek/deepseek-v4.1-flash#pricing [2] https://openrouter.ai/z-ai/glm-5.3-flash#pricing
Yes the official DS provider has a low cache cost, for now (it's just distributed KV). But people are still concerned about ZDR, sovereign AI, getting more model choice in their subscription price, etc. They want more bang for their buck. So when a new model comes out, the bigger impact is really its performance across providers, not the price at a single provider.
And in about 5 years (or less), API prices will stop being a thing. We all used to pay per-minute for phone calls, texts, data. Nobody does anymore. Virtually every mobile provider is now a flat prepaid or contract fee. Carriers improved their technology (going from analog to digital), and it turned out consumers will spend more money on a packaged subscription than on pay-per-use. That's why everything in the world is a subscription now.
Your modern $70 big wireless plan isn't giving you $70 of value. Similarly, your $20 AI subscription that's a great deal right now, will be less valuable in 5 years, when hardware & models are more efficient. You'll still be able to buy a local AI rig, but it will still be very expensive, due to AI models continuing to be large, and NVidia keeping new hardware expensive, as these things together reinforce their dominance and profits, and our reliance on them.
This also follows another pre-existing trend. Why do people keep having to buy a new iPhone or laptop every other year? Because each year companies make software & data less efficient/more bloated, so people need a more powerful machine to run it, which enables them to make even more bloated software. Almost everything people do with a computer today is what they did 15-20 years ago; it's just a higher bit-rate. Despite this, people keep re-buying the same machine, so companies can keep extracting more wealth.
AI works the same way. Rather than cost to consumers going down over time, it will likely go up. Not because it can't get cheaper/more efficient - but because it increases companies' profit. This isn't just a theory, btw; the US economy's growth is now almost entirely reliant on this happening.
> Rather than cost to consumers going down over time, it will likely go up. Not because it can't get cheaper/more efficient - but because it increases companies' profit.
As shown in the OpenRouter links you provided, there are over 30 distinct providers of these open-weights models, the majority of them supporting ZDR. They can't raise prices because it's a near-perfect marketplace and if they do, someone will just lower them to compete as long as marginal revenue >= marginal cost. There's no moat or other economic factors (e.g. collusion; hard to do with 30 actors) to allow for price control.
That's a short-term view of a subset of users.
Think about mobile users. If you compare the raw cost for MVNOs vs MNOs, they have basically the same cost. There is no special moat around text messages, voice calls, data. By law, MNOs have to give MVNOs access to resell their network access; it's literally the same network. Yet MVNOs are 2x-6x cheaper than MNOs. How is that possible? Trickery. MNOs hide fees, bundle "features", lock people into exorbitant prices, and increase costs over time. Nobody today sees the price per minute of calls, text, data. If you look really, really closely, you can compare data caps, international vs domestic. But almost nobody does.
Now back to LLMs: Normal users do not pay API cost, they pay subscription cost. They're going to be the vast majority of users. No normal user is going to look at API provider costs. They're going to pick one of a handful of subscription providers. Those subscription providers will hide the real costs behind the scenes, making deals with inference providers, who will in turn hide those prices for competitive advantage. They will raise prices, and it'll be buried in the subscription fees. This has been happening for a decade with mobile subscriptions, and it's already happening now with LLM subscriptions. (There is no price-list for current LLM subscriptions; it's a total mess that's constantly changing)
Enterprise and government are large-scale users, and they'll pay exactly the same way they pay for compute right now (LLM cost is literally compute cost). Some will self-host, some will pay API pricing, some will rent, some will use "team" or "business" subscriptions. This is also all happening right now. AWS is making bank from Bedrock purely because people in their ecosystem would rather spend money through a known vendor with marketplace credits, and that's just one of a hundred different examples.
To put it in simpler terms: AI is just servers. Normal people do not pay for servers, they pay a service provider for services. Businesses pay for servers, but in many different ways, and definitely not the cheapest options.