Competition drives prices down. We tried Kimi and GLM models after hitting 'cybersecurity' blocks on OpenAI and Anthropic. We found them to be much cheaper to access and helped us complete our work without 'cybersecurity' refusals blocking us.
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332451b
DeepSeek claims $38 of revenue per GPU, per hour for Flash V4. That is $332,880 per GPU, per year. This matches their DeepInfer numbers: 25,600 output tokens/s per GPU sold at $0.60 per million -> $55 minus some other overhead to arrive at $38.
For the bigger Anthropic and OpenAI models (and associated higher prices) there are many unknown factors. But presumably they also work hard on optimizations, and it's not so crazy to think they had or still have a lot of wiggle room to adjust prices.
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redrix
This is why Anthropic and OpenAI are pushing for more “regulation”. You can’t show ROI to investors by cutting inference costs.
Regulation might inconvenience them a little, but the upside is huge if it means open models out of China get banned.
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KevinMS
The third AI winter is coming. This is the one where it works for some cases but is too expensive.
chakintosh
It’s a race to the bottom to see who blinks first and goes bankrupt. It’s not sustainable.
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epsteingpt
Because there's limited demand, and GPU capacity is like airline seats use it or lose it.
This will only get worse.
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bhu8
It’s probably more efficient caching methods and smaller models (6 sol is actually 6 terra and opus 5.5 is smaller than 5.1 etc). Don’t overthink this please
skhameneh
Well they did pull back on ZDR a few times and at least Anthropic has made their arguments (that I disagree with) that model outputs, no matter how much user context was fed, do not fall under their definition of "user data".
Are these prices subsidized by user generated outputs?
Can I even trust any answer to not be carefully worded and rephrase the response to "user data"?
Even so, what's to prevent some "oops" event that seems to be all too common?
At least some months back Bedrock seemed to be properly isolated, but I've heard of many getting non-ZDR notices for new models.
joelsstafford
Then why I feel that I can handle fewer tasks with the same subscription over the last 5 months?
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tangotaylor
> It’s no surprise both companies are trying to build moats to defend against this trend, such as a focus on enterprise commitments and personal agentic assistants like OpenAI Dots and Claude Duet.
This probably won't be enough, because Openrouter now has to do age verification to verify their users are adults, and if they don't, they have to apply "teen mode" to all users.
limit2
> leaked financials from both OpenAI and Anthropic show unsurprisingly that they are losing billions due to R&D/scaling
No, they are losing billions because LLMs are not a viable business. Their real business is making bombastic statements which the credulous press prints unquestioning, fooling various investors and ... that's it. IPO is another of these. You really should note how the Anthropic IPO date keeps slipping because they can't make the S-1 public as it would give away the game immediately. The market was fooled by SpaceX once you can't do this a second or third time.
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maxdo
It’s both competition almost 3 way , cheaper open source , a clearly lagging behind a bit open ai that cuts prices to win Anthropic customers .
There was an interesting technical advantage by some models where Anthropic as a leader start loosing dramatically in speed too. 5.5 made a come back in that dimension.
Garlef
OpenAI also doubled the price of their subscription in the same time, right?
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Haven880
I am guessing something to do with Qwen, Kimi and Deepseek. Plus after the tokemaxxing wave died down, a lot of cancelled subs from enterprise? Just my 2ct.
consumer451
Well, because after 2011, when Anderseen famously said "software is eating the world"... it only ate so much of the world. We have that data on verticals now... is it possibly the same thing for "AI?"
Genuine inquiry here.
However, my bigger worry is this is just a temporary lull, and that due to alignment, regulatory, and distillation pressures, the best models will be kept internal, and then all of capitalism fails because the labs could maybe eat all of knowledge work.
There are already no junior hires. The ladder is already collapsing. Embrace, Extend, Extinguish.
hauntingseaweed
Price war. Duh. There is no moat. Also them chinese competition. It’s going to be race to the bottom. It’s gonna be ugly for the stock market. Good for consumers though!
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gum_wobble
Because they have found a way that cost them less to have you use a lesser capable model o less expensive
verdverm
I fully expect token vendors to go the way of mobile data providers. Increasing throughput and efficiency, yet commoditized and not reaping the massive rewards of the economic gains their technologies enable.
Can't wait for the unlimited plans we will have in due time.
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paxy
Because they have been making inference a lot more hardware efficient.
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lotrg
Trynna sell at Faberge prices when users can only afford Walmart
prjkt
They're competing with NVIDIA (huggingface)
jameson
competition. that's good for consumers.
though problem with proprietary LLMs it's difficult to know if the vendor's supposed "optimization" affects performance negatively because it's difficult to define an SLA
Either doesn't bode well for a multi-trillion dollar valuation for either company.
show comments
Starlevel004
> It turned out that GPT-6 Sol was a dud performancewise, so a week later OpenAI announced GPT-6.1 Sol,
I strongly believe that GPT-6 Sol was only ever meant to be the web chat model, but it was a panic public release to respond to Opus 5.5. It's clearly been over fitted for drawing diagrams in the chat.
dez11de
Moore’s Law.
deadbabe
People think OpenAI and Anthropic are just these wildly unprofitable companies with no future or business.
They know what they’re doing. The naysayers are like the people that said this little internet thing wasn’t going anywhere.
Competition drives prices down. We tried Kimi and GLM models after hitting 'cybersecurity' blocks on OpenAI and Anthropic. We found them to be much cheaper to access and helped us complete our work without 'cybersecurity' refusals blocking us.
DeepSeek claims $38 of revenue per GPU, per hour for Flash V4. That is $332,880 per GPU, per year. This matches their DeepInfer numbers: 25,600 output tokens/s per GPU sold at $0.60 per million -> $55 minus some other overhead to arrive at $38.
For the bigger Anthropic and OpenAI models (and associated higher prices) there are many unknown factors. But presumably they also work hard on optimizations, and it's not so crazy to think they had or still have a lot of wiggle room to adjust prices.
This is why Anthropic and OpenAI are pushing for more “regulation”. You can’t show ROI to investors by cutting inference costs.
Regulation might inconvenience them a little, but the upside is huge if it means open models out of China get banned.
The third AI winter is coming. This is the one where it works for some cases but is too expensive.
It’s a race to the bottom to see who blinks first and goes bankrupt. It’s not sustainable.
Because there's limited demand, and GPU capacity is like airline seats use it or lose it.
This will only get worse.
It’s probably more efficient caching methods and smaller models (6 sol is actually 6 terra and opus 5.5 is smaller than 5.1 etc). Don’t overthink this please
Well they did pull back on ZDR a few times and at least Anthropic has made their arguments (that I disagree with) that model outputs, no matter how much user context was fed, do not fall under their definition of "user data".
Are these prices subsidized by user generated outputs? Can I even trust any answer to not be carefully worded and rephrase the response to "user data"? Even so, what's to prevent some "oops" event that seems to be all too common? At least some months back Bedrock seemed to be properly isolated, but I've heard of many getting non-ZDR notices for new models.
Then why I feel that I can handle fewer tasks with the same subscription over the last 5 months?
> It’s no surprise both companies are trying to build moats to defend against this trend, such as a focus on enterprise commitments and personal agentic assistants like OpenAI Dots and Claude Duet.
Also regulatory capture, like OpenAI calcifying its teen mode into law via Adam's Law. https://openai.com/index/supporting-california-bill-advance-...
Openrouter recently changed their TOS to exclude under-18 users, presumably to escape liability from the law. https://conductatlas.com/diff/openrouter/openrouter-terms-of...
This probably won't be enough, because Openrouter now has to do age verification to verify their users are adults, and if they don't, they have to apply "teen mode" to all users.
> leaked financials from both OpenAI and Anthropic show unsurprisingly that they are losing billions due to R&D/scaling
No, they are losing billions because LLMs are not a viable business. Their real business is making bombastic statements which the credulous press prints unquestioning, fooling various investors and ... that's it. IPO is another of these. You really should note how the Anthropic IPO date keeps slipping because they can't make the S-1 public as it would give away the game immediately. The market was fooled by SpaceX once you can't do this a second or third time.
It’s both competition almost 3 way , cheaper open source , a clearly lagging behind a bit open ai that cuts prices to win Anthropic customers .
There was an interesting technical advantage by some models where Anthropic as a leader start loosing dramatically in speed too. 5.5 made a come back in that dimension.
OpenAI also doubled the price of their subscription in the same time, right?
I am guessing something to do with Qwen, Kimi and Deepseek. Plus after the tokemaxxing wave died down, a lot of cancelled subs from enterprise? Just my 2ct.
Well, because after 2011, when Anderseen famously said "software is eating the world"... it only ate so much of the world. We have that data on verticals now... is it possibly the same thing for "AI?"
Genuine inquiry here.
However, my bigger worry is this is just a temporary lull, and that due to alignment, regulatory, and distillation pressures, the best models will be kept internal, and then all of capitalism fails because the labs could maybe eat all of knowledge work.
There are already no junior hires. The ladder is already collapsing. Embrace, Extend, Extinguish.
Price war. Duh. There is no moat. Also them chinese competition. It’s going to be race to the bottom. It’s gonna be ugly for the stock market. Good for consumers though!
Because they have found a way that cost them less to have you use a lesser capable model o less expensive
I fully expect token vendors to go the way of mobile data providers. Increasing throughput and efficiency, yet commoditized and not reaping the massive rewards of the economic gains their technologies enable.
Can't wait for the unlimited plans we will have in due time.
Because they have been making inference a lot more hardware efficient.
Trynna sell at Faberge prices when users can only afford Walmart
They're competing with NVIDIA (huggingface)
competition. that's good for consumers.
though problem with proprietary LLMs it's difficult to know if the vendor's supposed "optimization" affects performance negatively because it's difficult to define an SLA
Capitalism and open competition doing its thing.
Part of the cheaper costs, if not the majority, probably are KV cache optimisations. https://insufferable.dev/posts/the-ai-race-just-got-awkward/
Think of all the open source projects in DeepSeek
credits goes to china ai companies
credit goes to china ai companies
Duh, China?
Microeconomics may give us a clue
Lack of demand and/or commodity product.
Either doesn't bode well for a multi-trillion dollar valuation for either company.
> It turned out that GPT-6 Sol was a dud performancewise, so a week later OpenAI announced GPT-6.1 Sol,
I strongly believe that GPT-6 Sol was only ever meant to be the web chat model, but it was a panic public release to respond to Opus 5.5. It's clearly been over fitted for drawing diagrams in the chat.
Moore’s Law.
People think OpenAI and Anthropic are just these wildly unprofitable companies with no future or business.
They know what they’re doing. The naysayers are like the people that said this little internet thing wasn’t going anywhere.