12 ms·

The comparison seems flawed in terms of cost. A Claude subscription is 20 bucks per worker if using personal accounts billed to the company, which is not very

• meager_wikis 8mo ago
  If anything, the 'scariness' of an old computer probably protected the company in many ways. AI's approachability to the average office worker, specifically how it makes it seem like it easy to deploy/run/triage enterprise software, will continue to pwn.
• gruez 8mo ago
  How viable are the $20/month subscriptions for actual work and are they loss making for Anthropic? I've heard both of people needing to get higher tiers to get anything done in Claude Code and also that the subscriptions are (heavily?) subsidized by Anthropic, so the "just another $20 SaaS" argument doesn't sound too good.
  • 8note 8mo ago
    id guess the 200 subscription sufficient per person. but at that point you could go for a bugger one and split amongst headcount
  • simonw 8mo ago
    I am confident that Anthropic make revenue from that $20 than the electricity and server costs needed to serve that customer. Claude Code has rate limits for a reason: I expect they are carefully designed to ensure that the average user doesn't end up losing Anthropic money, and that even extreme heavy users don't cause big enough losses for it to be a problem. Everything I've heard makes me believe the margins on inference are quite high. The AI labs lose money because of the R&D and training costs, not because they're giving electricity and server operational costs away for free.
    • Esophagus4 8mo ago
      I always assumed that with inference being so cheap, my subscription fees were paying for training costs, not inference.
      • smashed 8mo ago
        Doubtful
      • simonw 8mo ago
        Anthropic and OpenAI are both well documented as losing billions of dollars a year because their revenue doesn't cover their R&D and training costs, but that doesn't mean their revenue doesn't cover their inference costs.
        • overgard 8mo ago
          Does it matter if they can't ever stop training though? Like, this argument usually seems to imply that training is a one-off, not an ongoing process. I could save a lot of money if I stopped eating, but it'd be a short lived experiment. I'll be convinced they're actually making money when they stop asking for $30 billion funding rounds. None of that money is free! Whoever is giving them that money wants a return on their investment, somehow.
          • simonw 8mo ago
            It matters because as long as they are selling inference for less than it costs to serve they have a potential path to profitability. Training costs are fixed at whatever billions of dollars per year. If inference is profitable they might conceivably make a profit if they can build a model that's good enough to sign up vast numbers of paying customers. If they lose even more money on each new customer they don't have any path to profitability at all.
            • citrin_ru 8mo ago
              > If they lose even more money on each new customer they don't have any path to profitability at all. In theory they can increase prices once the customers will be hocked up. That's how many startups works.
  • _jss 8mo ago
    Merely for the viability part: I use the $20/mo plan now, but only as a part-time independent dev. I will hit rate-limits with Opus on any moderately complex app. If I am on a roll, I will flip on Extra Usage. I prototyped a fully functional and useful niche app in ~6 total hours and $20 of extra usage, and it's solid enough and proved enough value to continue investing in and eventually ship to the App store. Without Claude I likely wouldn't have gotten to the finished prototype version to use in the real world. For Indy dev, I think LLMs are a new source of solutions. This app is too niche to justify building and marketing without LLM assistance. It likely won't earn more than $25k/year but good enough!
  • Aurornis 8mo ago
    I don't think the assumption that Anthropic is losing money on subscriptions holds up. I think each additional customer provides more revenue than the cost to run their inference, on average. For people doing work with LLMs as an assistant for codebase searching, reviews, double checks, and things like that the $20/month plan is more than fine. The closer you get to vibecoding and trying to get the LLM to do all the work, the more you need the $100 and $200 plans. On the ChatGPT side, the $20/month subscription plan for GPT Codex feels extremely generous right now. I tried getting to the end of my window usage limit one day and could not. > so the "just another $20 SaaS" argument doesn't sound too good Having seen several company's SaaS bills, even $100/month or $200/month for developers would barely change anything.
    • lokar 8mo ago
      Why do you think that? Lots of people on this thread saying that, but zero citations.
• latchkey 8mo ago
  Like Uber/Airbnb in early days, this is heavily subsidized.
  • deleted 8mo ago
    [deleted]
• abraxas 8mo ago
  What if LLMs are optimizing the average office worker's productivity but the work itself simply has no discernable economic value? This is argued at length in Grebber's Bullshit Jobs essay and book.
  • overgard 8mo ago
    I think this is extremely common and nobody wants to admit to it!
  • kittbuilds 8mo ago
    [dead]
  • groundzeros2015 8mo ago
    And that book sort of vaguely hints around at all these jobs that are surely bullshit but won’t identify them concretely. Not recognizing the essential role of sales seemed to be a common mistake.
    • bubblewand 8mo ago
      What counts as “concretely”? And I don’t recall it calling sales bullshit. It identified advertising as part of the category that it classed as heavily-bullshit-jobs for reason of being zero-sum—your competitor spends more, so you spent more to avoid falling behind, standard red queen’s race. (Another in this category was the military, which is kinda the classic case of this—see also, the Missile Gap, the dreadnought arms race, et c.) But not sales, IIRC.
      • thesmtsolver2 8mo ago
        How does that make advertising a bullshit job? The only way advertising won't exist or won't be needed is when humanity becomes a hive mind and removes all competition.
        • bubblewand 8mo ago
• 46493168 8mo ago
  >I think there are enough short term supposed benefits that something should be showing there. As measured by whom? The same managers who demanded we all return to the office 5 days a week because the only way they can measure productivity is butts in seats?
  • bryanlarsen 8mo ago
    Productivity is the ratio of outputs to inputs, both measured in dollars.
    • tonyedgecombe 8mo ago
      Productivity is the ratio of real GDP to total hours worked.
      • bryanlarsen 8mo ago
        That's labor productivity, a different measure. But the original article references labor productivity, so your definition is more relevant.
    • 46493168 8mo ago
      What is the definition of input, what is the definition of output, and who is responsible for measuring them?
      • bryanlarsen 8mo ago
        The answer is different depending on your target -- are you measuring the productivity of a firm, a country or some other sort of entity?
• azuanrb 8mo ago
  $20 is not useable, need $100 plan at least for development purposes. That is a lot of money for some countries. In my country, that can be 1/10 of their monthly salary. Hard to get approval on it. It is still too expensive right now.
  • iwontberude 8mo ago
    Yeah it’s not obvious at first but a big project will cause usage to skyrocket bc of how much context it will stuff with reading files. I can use my $20 subscription’s 5 hour limit in mere seconds.
• vessenes 8mo ago
  Agreed. We do have a way to see the financial impact - just add up Anthropic and oAI's reported revenues -> something like $30b in annual run rate. Given growth rates, (stratospheric), it seems reasonable to conclude informed buyers see economic and/or strategic benefit in excess of their spend. I certainly do! That puts the benefits to the economy at just around where Mastercard's benefits are, on a dollar basis. But with a lot more growth. Add something in there for MS and GOOG, and we're probably at least another $5b up. There are only like 30 US companies with > $100bn in revenues; at current growth rates, we'll see combined revenues in this range in a year. All this is sort of peanuts though against 29 trillion GDP, 0.3%. Well not peanuts, it's boosting the US GDP by 10% of its historical growth rate, but the bull case from singularity folks is like 10%+ GDP growth; if we start seeing that, we'll know it. All that said, there is real value being added to the economy today by these companies. And no doubt a lot of time and effort spent figuring out what the hell to do with it as well.
  • mikem170 8mo ago
    Investors are optimistic, but what will this new tech be used for? Advertising? Propaganda? Surveillance? Drone strikes? Does profitable always equal useful? Might other cultures justifiably think differently, like the Amish?
    • vessenes 8mo ago
      The Amish are skilled at getting cash from the “English” as they call non-Amish. I imagine they also think that the money they receive is roughly tied to value they create. I wasn’t talking valuations, just revenue - money that CFOs and individuals spent so far, and are planning on spending. I also didn’t talk profitable. Upshot, though, I don’t think it’s just a US thing to say that when money exchanges hands, generally both parties feel they are better off, and therefore there is value implied in a transaction. As to what it will be used for: yes.
      • mikem170 8mo ago
        You did specify revenue. The original comment mentioned benefits. I was thinking that the two are different.
• overgard 8mo ago
  I've never looked at enterprise licensing, but regular license wise, a Claude subscription is actually $200 a month. I don't count the $20 or $100 tiers because they're too limited to be useful (especially professionally!)
• Zardoz84 8mo ago
  And nobody talks that the "20 bucks per worker" it's selling it at loss. I'm waiting to see when they put a price that expects to generate some net income...
  • mikkupikku 8mo ago
    20 bucks per worker could easily be profitable, depending on how much the workers actually use it..
• dahcryn 8mo ago
  not true at all, onboarding is complex too. E.g. you cant just connect claude to your outlook, or have it automate stuff in your CRM. As a office drone, you don't have the admin permissions to setup those connections at all. And that's the point here: value is handicapped by the web interface, and we are stuck there for the foreseeable future until the tech teams get their priorities straight and build decent data integration layers, and workflow management platforms.
• y42 8mo ago
  Problem is, that just having a Claude subscription doesn't make you productive. Most of those talks happen in a "tech'ish" environments. Not every business is about coding. Real life example: A client came to me asking how to compare orders against order confirmation from the vendor. They come as PDF files. Which made me wonder: Wait, you don't have any kind of API or at least structured data that the vendor gives you? Nope. And here you are. I am not talking about a niche business. I assume that's a broader problem. Tech can probably automate everything and this since 30 years. Still business lack of "proper" IT processes, because at the end every company is unique and requires particular measures to be "fully" onboarded to IT based improvements like that.
  • mikkupikku 8mo ago
    Thing is, unless the order confirmations number high in the thousands, most businesses could just hire an old lady with secretary experience to crunch through that work manually for a fraction of what it would cost them to get the whole system automated. I've seen this play out with time sheets. Every day factory floor workers write up every job they do on time sheets, paper and pencil, but management wants excel spreadsheets with pretty plots. Solution? One old typist who can type up all the time sheets every day. No OCR trouble, no expensive developer time, if she encounters illegible numbers she just cross references against the job fliers to figure it out instead of throwing errors the first time a 0 looks like a 6.
• delaminator 8mo ago
  You still need to teach a 2020s employee how to use Claude. - protect yourself from data loss / secret leaks - what it can and can't do - trust issues & hallucinations - Can't just enable Claude for Excel and expect people to become Excel wizards.
• jstummbillig 8mo ago
  I see no reason to believe that just handing a Claude subscription to everyone in a company simply creates economic benefit. I don't think it's easier than "automating customer service". It's actually very strange. I think it could definitely already create economic benefit, after someone instructed clearly how to use it and how to integrate it in your work. Most people are really not good at figuring that out on their own, in a busy workday, when left to their own devices and companies are just finding out where the ball is moving and what to organize around too. So I can totally see a lot of failed experiments and people slowly figuring stuff out, and all of that not translating to measurable surpluses in a corp, in a setup similar to what OP laid out.
  • viking123 8mo ago
    I wish people in my company even used their Claude code or Cursor properly rather than asking me non-sense questions all the time that the model can easily answer with the connected data sources. And these people are developers. This shit will take like 10 years to adopt properly, at least in most boomer companies. I use these all the time nowadays and they are great tools when utilized properly but I have hard time seeing it replace functions completely due to humans having limited cognitive capacity to multitask and still needing to review stuff and build infra to actually utilize all this..
• TimByte 8mo ago
  I think the subscription price is only the visible tip of the iceberg
• geraneum 8mo ago
  > A Claude subscription is 20 bucks per worker Talking about macro economics, I don’t think that number is correct.
• vidarh 8mo ago
  A $20 Claude subscription lets you scratch the surface. A $20 Claude subscription without training means you have a lot of people spending time figuring out how to use it, and then maybe getting a bit of payback, but earning back that training is going to take time. Getting people to figure out how to enter questions is easy. Getting people to a point where they don't burn up all the savings by getting into unproductive conversations with the agent when it gets something wrong, is not so easy.
• u1hcw9nx 8mo ago
  I think crazygringo mispresents Solow paradox. None of the main explanations say it's the cost that removed the productivity.
• MSFT_Edging 8mo ago
  > A Claude subscription is 20 bucks per worker Only until the loans come due. We're still in the "uber undercutting medalian cabs" part of the game.
• MagicMoonlight 8mo ago
  A computer lets you save a fortune in storage rooms, admin staff, delivery fees etc. It lets you reinvent how everything runs. ChatGPT just lets you generate slop, that may be helpful. For the vast majority of industries it doesn’t actually offer much. Your meme departments like HR might be able to push out their slop quicker, but that doesn’t improve profitability.
• giantg2 8mo ago
  "if using personal accounts" InfoSec and Legal would like a word with you...
• analog31 8mo ago
  I'm not sure about the comparison either, but the cost of operating the LLM should include the worker's wages. I read an article yesterday about people working insane hours at companies that have bet heavily on AI. My interpretation is that a worker runs out of juice after a few hours, but the AI has no limit and can work its human tender to death.
• boxingdog 8mo ago
  [dead]
• nurettin 8mo ago
  > A Claude subscription is 20 bucks per worker I mean, sure. If you want to use it for 20 minutes and wait for two hours at a time.
• steveBK123 8mo ago
  I keep seeing this argument thrown around, but API usage on business plans is token spend based and can be orders of magnitude more than this $20/head per month. My company is spending 20-50x that much per head easily from the firmwide cost numbers being reported. They had to set circuit breakers because some users hit $200/day.
• 8note 8mo ago
  the expensive work is reorganizing organizations to be able to make use of the improved output.