Is this a reverse psychology trick to convince people to pay for ChatGPT subscriptions?
If you’ve got a toy project that you want “AI” to give you a hand with, do it now.
Pretty soon all these companies are going to have to pay for all that investment in compute resources they’ve been busily soaking up over the last few years, and then they’re going to have to pay back their investors, and then they’re going to have to try and make a profit
This is the golden time for cheap commercial AI. Already the noose is starting to tighten, and it will never again be as cheap as it is now.
Sounds like it’ll never be worth it.
In five years once this RAM nonsense is over you’ll be able to run a comparatively high quality local LLM for very little money. I can’t see how these companies will ever make their money back.
If manufacturers are willing to sell components to us in five years that is.
Of course if the colllapse happens before then the story might be different…
I’m slightly optimistic that manufacturers will return to the retail market eventually. Every AI company is racing to hyperscale right now but there will be a point where the infrastructure is built and at that point the growth will slow down quite a bit. In that scenario there will be ongoing demand for components to be replaced as they become obsolete but I can’t imagine the demand will be the same level it is right now as everyone rushes to build.
That’s assuming this all works the way they want it to. If the economics aren’t viable and the bubble bursts…
Their Datacenter buildout doesn’t work they want to. Most projects are very much delayed, and those that even started getting built are over budget. OpenAI and Anthropic will collapse in the next years, and this is coming from someone who absolutely sees the good things about the technology itself.
OpenAI and Anthropic will collapse in the next years
Stop, I can only handle so much good news!
There is no way, absolutely NO WAY to recuperate the amount of cash burnt on those two companies, and that is not even counting the amount of AI Startup whose cash is currently flowing towards to those two.
“Hyperscale” is utterly meaningless MBA jargon at this point. Equivalent of verbal slop from industry shills and CNBC/Bloomberg sell side simps.
Sorry if that’s true. I understood the word to mean aggressive growth at any cost to try and shut out competition before they can get established.
🤞
Yeah they’ve been pushing Claude code at work for us non coders jobs to come up with stuff that would help us. We’ve gotten a few surprisingly useful programs out of it, but our assumption is perfect them now before pricing goes through the roof. We are also only creating programs that do not require ongoing AI use. Just a bunch of relatively simple things that make our jobs easier.
I am still pushing my boss for some local hw as I think as a group we’ve spent a couple grand in the last month and that is the least of my reasons for wanting a local llm vs subscription.
Yes we’ve begun to track “token use” all over my company so it doesn’t spiral out of control, as it easily can do when you have agents managing agents connecting to MCP servers that themselves use the models to generate responses. The engineers around me say that they basically have multiple agents cranking full time and just keep an eye on them every so often. They will even queue up things to run overnight to make use of the time. They never actually close their laptops. This is an insane amount of usage, well beyond what anyone can do in the ChatGPT application by typing with their fingers, and there’s no way it can continue like this.
Unless there are actual major efficiency innovations. But yes, current LLMs are sold cheaper than what they cost
I’d rather save earth
I dunno, man. I’ve blown $200 on worse things.
Then don’t use the internet because everything has Ai. Google has it, every browser has it installed, almost every shopping site automatically uses Ai results, the news feed on Google is all Ai results, the questions that are the most asked on Google are now Ai driven.
Main point of environmental destruction is using the LLM’s but nearly everything is using Ai and it’s hard to outrun it and a lot of things are making it hard to opt out and I wouldn’t put it past them to make it so they can make you pay to opt out of Ai in the future for a premium browser with the ability to disable Ai otherwise you’re stuck with it kind of thing.
I hate what it’s doing to the environment too but it’s not going away unless everyone in neighboring communities decided to bulldoze them and use their wrecking balls to destroy them. Emps aren’t hard to make happen.
If people wanted to destroy them they would. If people really didn’t want them they’d destroy them.
What bubble have you been living in? Almost none of my apps have any kind of AI… You can easily ditch it by using a Firefox fork, or any privacy Chromium fork, or even Chromium itself. Saying “Then don’t use the internet” is somewhat of a defeatist sentence, just stick to good websites/programs and you’re good.
I should’ve added a 🤪 to that because that was meant to be light not in a fuck off kind of way but more of a you gotta be kidding me this shit keeps expanding kind of way.
Oh
every browser has it installed
Not Waterfox!
Use Firefox without AI and don’t use google search engine
Nice try, OpenAI sales reps.
How much of our water, electricity, tax breaks, and public land does it use?
Yes!
Nice try, I still ain’t gonna pay. OpenAI can go bankrupt without burning my money
This is just Gym Economics though, right? They work on the assumption that only a small number of their member will actually use the service heavily, but the overwhelming majority will turn up to use the treadmill a few times then never visit again.
Ok but it would take 70 users paying $200 to cover the cost of $14,000. So if one person maxes out their usage, there needs to be 69 users who do not use their account at all but are still paying. And that’s just the break even point, still no profit for the AI company.
I’m struggling to believe that many people would pay that much and then underuse the subscription. It seems far more likely to me that this pricing model isn’t sustainable.
Even worse, that calculation is based on that their API pricing is currently providing a positive margin. From what I have seen and heard at this point, API pricing is at best breaking even.
For a consumer service, absolutely. That’s too much money for a household to ignore and they are actually paying attention.
For a business user? Quite possible. My company bought subscription to one of the providers for every single employee, no matter the role. A large number don’t use it at all (if they do anything, it’s using a chat that’s either free or included with something else), and most of the rest use it lightly. We have only a handful of folks trying to use it as much as possible. Companies frequently just buy for everyone instead of micromanaging who needs or doesn’t need a service.
I thought that Anthropic et al. were charging enterprise accounts based on token usage rather than just a flat subscription fee. That’s why you see things like this.
For example, Microsoft copilot has a monthly price with a token quota and a company can choose to just make it stop working when the quota is hit.
I think I recall other plans having at least the option of token quotas, because most companies don’t want to give employees a blank check for anything. I also believe that generally the token bill is on top of a fixed monthly cost too.
Please do.
Use it all.
Bankrupt these shit companies and help burst the bubble
Sounds like a trap. Big cruises are said to have buffets, but yet, they’re still floating.
But how much is the data you’re giving them worth? The other option is don’t give them your money or your data. The Qwen 3.6 MoE model with OpenCode is running pretty well on my RTX 4060 gaming laptop. According the Codacus YouTube channel, it even runs decently in as little as 6GB of VRAM.
Edit:
Fixed typo.
TBH local models aren’t as good as cloud. Even with 16GB VRAM you aren’t getting anywhere close to >100GB cloud LLM
No, it’s not quite as strong, and especially the initial prefill can take a bit. I also sometimes run into infinite thinking loops where I have to stop it and re-run my last prompt.
It’s surprising how close Qwen 3.6 gets on the benchmarks to Claude models, though. Especially when running locally with 200k context, I’ve found it’s good enough to be a daily driver. Despite the faults, it’s better than paying Anthropic $200 a month so they can rate limit me and collect my data.
I prefer to run with cheap pay-per-prompt cloud model. You can find really good open models that cost $0.50 per million tokens.
Just stop using it period, self hosted or not. Wtf is the thinking here?
It’s 100% bad in every case. It’s never good, is never been good, and it literally can’t become good. It’s bad no matter where it’s at, or who it’s being hosted by.
Just don’t use it for anything. At all. Nope, not even that.
I started out using GitHub Copilot at work because there was a lot of pressure to use AI, and I was put off by how we were churning through PRs that seemed to work, but having to go back and fix the slop afterwards.
Now I’ve realized that there are skillful ways and unskillful ways to use LLMs, and they can in fact be a useful tool beyond just generating slop. They don’t replace a human thinking critically, but they can automate mundane, routine tasks. They can also summarize text well and suggest options for humans to consider. For example, LLMs reviewing code will often find issues the human reviewers missed.
In addition to coding, I’ve recently been using Qwen locally for screenwriting. It can’t write worth a shit, but it does a good job critiquing my work and pointing out problems with the story structure and the like. For example, I can tell it something like “look at the 7 plot elements described in this MD file and point out where this story does and doesn’t follow this structure”, and the output is quite useful.
While LLMs aren’t the magical silver bullet the tech bros are hyping them up to be, they can still be a useful tool. If they’re just used to generate slop, then no, they’re worse than useless.
I’m horrrfied that an LLM is your writing coach.
It’s not my “coach” any more than random people online would be if I posted it in a forum somewhere and no more than a LLM or a human peer reviewing my code is my “coach”. It provides a different perspective to help me see beyond my own biases with feedback I can accept or reject.
Qwen has obviously been trained on writing books and a ton of screenplays. As an experiment, I changed the character names in a classic sitcom script and it was able to identify the series from the writing style and then it also identified the episode. It’s not useful for doing the actual writing, but it does provide useful feedback based on sophisticated statistical analysis of my work compared to its professionally-written training data.
Explain to me how it’s better than you learning to analyze your own work from a formulaic perspective?
Everytime you choose to use AI, you are choosing NOT to develop an ability of your own. Sometimes, that’s an ability that just tedious to use, other times it might be something you obviously need to do yourself, yet others the ability might be something with a tangential utility you haven’t recognized.
An analogy might be reading music exclusively. Great, now you can play a wide range of music–indisputably beneficial!–but the cost of developing your own ear.
I have read a lot of books and do analyze my work in terms of techniques and principles I’ve studied over the years. However, even top professional writers don’t work in a vacuum. TV writers, for example, have “the room” with a team of professional writers, producers, etc. weighing in on all writing decisions. For indies, you don’t have that luxury, and even getting another human who is good at writing to read what you wrote and share detailed feedback is hard, especially when said humans aren’t getting paid to do it full time. Asking friends and family to critique your writing will often result in them trying to spare your feelings, whereas Qwen will happily rip your work to shreds and not care if it just shit all over your passion project.
Do you have a flat rate sub to Qwen? I’m curious if you fed it something that you personally think is great writing that isn’t prominent training data, that you are intimately familiar with, and what you would make of its analysis?
My fear is two-fold: first, writing is communication between people with shared experiences. An LLM can’t really tell if someone’s going to have an emotional connection to your writing or why or what or how it works. Second, novelty and rule-breaking is highly context dependant. I’d be worried an LLM is merely steering me into probable lanes instead of allowing me to develop my own unique voice.
All the investors know it’s a massive money sink right now. The goal isn’t for “everyone” to get to use AI.
It’s to get so many people used to using AI that businesses like law offices and hospitals and other corporations so ingrained and built around having AI, while leaving so many graduating college students useless without AI, that businesses will be reliant upon it, no matter what costs of it they will have to absorb.
In five years there won’t be a $200 plan. There will be a $15,000 plan per person and businesses will pay it because they won’t be able to do well without it.
I think there may also a horizontal scheme as monopolies take on a global scale. Those businesses that sell in bankruptcy due to high tech costs could be gobbled up by the biggest AI-native competition. It’s a leap but maybe in a decade your optometrist is replaced by an ai kiosk with a remote technician?
deleted by creator
Law offices, hospitals, and insurance companies are not going to set up their own servers, localize an AI, and upload all the custom data sets they need into a pre trained locally hosted model. Everyone could easily host their own cloud backup system as well, but no one does it.
But yes. That’s their plan. It’s been done multiple times before amongst things. It’s how busses eliminated trolleys, how ride share beat out taxis, and how Walmart sells the cheapest Coke. Amazon does it as well. It’s a variation of predatory pricing. It’s common as hell. Supposed to be illegal, but seldom does anyone get in trouble for it. Crooked government that works for the wealthy n all.
deleted by creator
Since when has stupid ever stopped anything?
The actual cost to OpenAI is likely much less. The number in the article is calculating the API cost that a fully maxed out subscription would incur theoretically. The API token cost, however, is far above the actual computational cost.
I disagree - the analysis takes as a basis a very, very generous margin of 75% on API prices. There is no way they have that much of a margin, this is wishful thinking.
And every single user who maxes out their 200$-subscription burns more cash than they take in from 70 subscriptions that lie dormant.
I was talking to one of our cloud architects at work yesterday. They did a test and just ran in “asdf” to a chat prompt, and were able to trace the costs. It was 12 cents.
I could totally see AI costs getting out of control very quickly. Doing something like a Copilot formula in an Excel spreadsheet is easily going to run up hundreds of dollars of costs eventually.
The actual price is hard to really know, but I think training should also factor in. The hype of LLMs is based on the fantastical idea of continunous improvement forever, so you need to keep training. Even ignoring the hype part, you still need to retrain simply to update the data inside the LLM.
I guess we’ll only know for sure after the crash/readjustment.
I wonder what companies that have integrated AI into all their workflows and processes are planning to do when the times comes to pay real price for the tokens.
spoiler
Nothing. They aren’t thinking ahead.
That’s the next CEOs problem to solve while the current one is enjoying his golden parachute and sailing around the world. Right now, number is going up!
Nah, they do what they always do: mass layoffs
DEFINITELY NOT A BUBBLE EVERYBODY NOTHING TO SEE HERE
Here is the second part of the table btw, with an illusory 75% margin on API pricing:
This will never be profitable if not specialized into very specific areas with very large payoffs. Even coding isn’t paying off enough.
those who subscribed should set up bots to use that full potential
let AI write that bot
Do you want a Butlerian Jihad? Because that’s how you get a Butlerian Jihad
Hopefully it doesn’t crash when the usage goes up a bit.
