LLM pricing has never made sense
6 hours ago
- #LLM Industry
- #AI Pricing
- #Capitalism Critique
- Claude Code was temporarily removed from Anthropic's $20/month subscription tier due to a pricing page test affecting 2% of users, indicating potential rate increases for code generation products.
- GitHub's Copilot is pausing new sign-ups, tightening usage limits, and adjusting model availability, making the product worse for users.
- OpenAI is reportedly losing money on its $200/month Pro subscriptions, with over $290 billion in investment and no profit yet, aiming for profitability by 2030.
- Companies like OpenAI and Anthropic have raised vast sums from venture capitalists, but returns are now expected, possibly leading to rate hikes that could price out many users.
- Local LLMs running on hardware like Apple's M-series chips and open-weight models offer a free alternative, challenging the sustainability of expensive cloud-based services.
- The issue for many is not the technology itself but the capitalist system and how companies are aggressively promoting AI products.
- A profitability reckoning is anticipated for big AI companies, with products likely to become worse, more expensive, or both to satisfy VC returns.
- Uncertainties remain, such as whether users will keep paying more, unsubscribe due to ads, or switch to local LLMs, highlighting the risks in current investment strategies.