8 ms·

Agreed on everything. Just to add, not only anthropic is offering CC at like a 500% loss, they restricted sonnet/opus 4 access to windsurf, and jacked up their

Agreed on everything. Just to add, not only anthropic is offering CC at like a 500% loss, they restricted sonnet/opus 4 access to windsurf, and jacked up their enterprise deal to Cursor. The increase in price was so big that it forced cursor to make that disastrous downgrade to their plans. I think only way Cursor and other UX wrappers still win is if on device models or at least open source models catch up in the next 2 years. Then i can see a big push for UX if models are truly a commodity. But as long as claude is much better then yes they hold all the cards. (And don't have a bigger company to have a civil war with like openai)

manojlds 1y ago
If open models become big, open coding agents would be bigger at that point. Even more motivation as well.
threatripper 1y ago
But Cursor is also offering OpenAI and Google models.
adidoit 1y ago
Not sure this is true. Inference margins are substantial and if you look at your claude code usage it's very clever at caching Input │ Output │ Cache Create │ Cache Read 916,134 │ 11,106,507 │ 199,684,538 │ 2,767,614,506 as an example here's my usage. Massive daily usage for the past two months.
lvl155 1y ago
Which is interesting because Sonnet is cheap and Opus is not on par with o3 for tasks where you want to deploy it.
7thpower 1y ago
Where is a citation on Anthropic increasing cost to cursor? I had not seen that news, but it would make sense.
bernawil 1y ago
you mean the plans are subsidized? pay-per-use doesn't look subsidized to me, I can spend 5$ a day on a medium sized codebase easily.
virgildotcodes 1y ago
Seems like the survival strategy for cursor would be to develop their own frontier coding model. Maybe they can leverage the data from their still somewhat significant lead in the space to make a solid effort.
- josephcooney 1y ago
  interestingly windsurf have done this (I'm not sure how frontier this model is...but it's their own model) https://windsurf.com/blog/windsurf-wave-9-swe-1 https://windsurf.com/blog/windsurf-wave-9-swe-1 but AFAIK cursor have not.
- bluelightning2k 1y ago
  Windsurf has developed their own fron tier model. It's pretty good. It's not sota but it's very well aligned with their tool call formatting etc.
- libraryofbabel 1y ago
  I don’t think that’s a viable strategy. It is very very hard and not many people can do it. Just look at how much Meta is paying to poach the few people in the world capable of training a next gen frontier model.
  - lukan 1y ago
    Why are there actually only a few people in the world able to do this? The basic concept is out there. Lots of smart people studying hard to catch up to also be poached. No shortage of those I assume. Good trainingsdata still seems the most important to me. (and lots of hardware) Or does the specific training still involves lots of smart decisions all the time? And those small or big decisions make all the difference?
    - riwsky 1y ago
      Because it’s not about “who can do it”, it’s about “who can do it the best”. It’s the difference between running a marathon (impressive) and winning a marathon (here’s a giant sponsorship check).
teruakohatu 1y ago
> CC at like a 500% loss Do you have a citation for this? It might be at a loss, but I don’t think it is that extravagant.
- rolisz 1y ago
  Before they announced the Max plans, I could easily hit 10-15$ of API usage per day (without even being a heavy user). Since they announced that you can use the Pro subscription with Claude Code, I've been using it much more and I've never ever been rate limited.
  - asaddhamani 1y ago
    API prices are way higher than actual inference cost.
  - 3uler 1y ago
    This is what I don’t get about the cost being reported by Claude code. At work I use it against our AWS Bedrock instance, and most sessions will say 15/20 dollars and I’ll have multiple agents running. So I can easily spend 60 bucks a day in reported cost. Our AWS Bedrock bill is only a small fraction of that? Why would you over charge on direct usage of your API?
    - mike_hearn 1y ago
      Anthropic has costs beyond their AWS bill ....
- csomar 1y ago
  The way I am doing the math with my Max subscription and assuming DeepSeek API prices, it is still x5 times cheaper. So either DeepSeek is losing money (unlikely) or Anthropic is losing lots of money (more likely). Grok kinda confirms my suspicions. Assuming DeepSeek prices, I've probably spent north of $100 of Grok compute. I didn't pay Grok or Twitter a single cent. $100 is a lot of loss for a single user.
Aeolun 1y ago
It probably doesn’t cost them all that much? Maybe they were offering the API at a 500% markup, and code is just breaking even.

manojlds 1y ago

If open models become big, open coding agents would be bigger at that point. Even more motivation as well.

threatripper 1y ago

But Cursor is also offering OpenAI and Google models.

adidoit 1y ago

Not sure this is true. Inference margins are substantial and if you look at your claude code usage it's very clever at caching Input │ Output │ Cache Create │ Cache Read 916,134 │ 11,106,507 │ 199,684,538 │ 2,767,614,506 as an example here's my usage. Massive daily usage for the past two months.

lvl155 1y ago

Which is interesting because Sonnet is cheap and Opus is not on par with o3 for tasks where you want to deploy it.

7thpower 1y ago

Where is a citation on Anthropic increasing cost to cursor? I had not seen that news, but it would make sense.

bernawil 1y ago

you mean the plans are subsidized? pay-per-use doesn't look subsidized to me, I can spend 5$ a day on a medium sized codebase easily.

virgildotcodes 1y ago

Seems like the survival strategy for cursor would be to develop their own frontier coding model. Maybe they can leverage the data from their still somewhat significant lead in the space to make a solid effort.

josephcooney 1y ago
interestingly windsurf have done this (I'm not sure how frontier this model is...but it's their own model) https://windsurf.com/blog/windsurf-wave-9-swe-1 https://windsurf.com/blog/windsurf-wave-9-swe-1 but AFAIK cursor have not.
bluelightning2k 1y ago
Windsurf has developed their own fron tier model. It's pretty good. It's not sota but it's very well aligned with their tool call formatting etc.
libraryofbabel 1y ago
I don’t think that’s a viable strategy. It is very very hard and not many people can do it. Just look at how much Meta is paying to poach the few people in the world capable of training a next gen frontier model.
- lukan 1y ago
  Why are there actually only a few people in the world able to do this? The basic concept is out there. Lots of smart people studying hard to catch up to also be poached. No shortage of those I assume. Good trainingsdata still seems the most important to me. (and lots of hardware) Or does the specific training still involves lots of smart decisions all the time? And those small or big decisions make all the difference?
  - riwsky 1y ago
    Because it’s not about “who can do it”, it’s about “who can do it the best”. It’s the difference between running a marathon (impressive) and winning a marathon (here’s a giant sponsorship check).

teruakohatu 1y ago

> CC at like a 500% loss Do you have a citation for this? It might be at a loss, but I don’t think it is that extravagant.

rolisz 1y ago
Before they announced the Max plans, I could easily hit 10-15$ of API usage per day (without even being a heavy user). Since they announced that you can use the Pro subscription with Claude Code, I've been using it much more and I've never ever been rate limited.
- asaddhamani 1y ago
  API prices are way higher than actual inference cost.
- 3uler 1y ago
  This is what I don’t get about the cost being reported by Claude code. At work I use it against our AWS Bedrock instance, and most sessions will say 15/20 dollars and I’ll have multiple agents running. So I can easily spend 60 bucks a day in reported cost. Our AWS Bedrock bill is only a small fraction of that? Why would you over charge on direct usage of your API?
  - mike_hearn 1y ago
    Anthropic has costs beyond their AWS bill ....
csomar 1y ago
The way I am doing the math with my Max subscription and assuming DeepSeek API prices, it is still x5 times cheaper. So either DeepSeek is losing money (unlikely) or Anthropic is losing lots of money (more likely). Grok kinda confirms my suspicions. Assuming DeepSeek prices, I've probably spent north of $100 of Grok compute. I didn't pay Grok or Twitter a single cent. $100 is a lot of loss for a single user.

Aeolun 1y ago

It probably doesn’t cost them all that much? Maybe they were offering the API at a 500% markup, and code is just breaking even.