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I think it’s pretty clear what the purpose of this stuff is: get people so invested into the Claude ecosystem with certs and “modernization kits”, so that when

I think it’s pretty clear what the purpose of this stuff is: get people so invested into the Claude ecosystem with certs and “modernization kits”, so that when the subsidies end and subscription costs shoot up they feel they’re in too deep now to switch to something cheaper.

ImaCake 7mo ago
Or what if local models get good enough to threaten the server based product?
- otabdeveloper4 7mo ago
  They're good enough already. The moat is only a) post-training magic for the elusive UX "vibes" b) stickiness of the Claude UI's. The first part will be eventually (give it a couple years) solved by a LoRA marketplace. The second is not relevant because existing UI's are very sticky already and Claude won't be able to overcome decades of inertia anyways.
  - mock-possum 7mo ago
    That and the price of hardware
- edf13 7mo ago
  That is the biggest threat - and likely where things will end up eventually… it’s when that “eventually” is and what the server based providers can pivot to in that time.
- nosefurhairdo 7mo ago
  Seems unlikely. We're already seeing specialized hardware optimized for LLM performance (taalas, groq, cerebras), and simple economies of scale result in these sorts of products being a better value when rented from a server vs purchased/managed/upgraded for the typical the user. Frontier models will continue to be either exclusively available from servers or significantly more affordable from servers vs local alternatives for the foreseeable future.
- mikkupikku 7mo ago
  This will probably happen unless the industry conspires to roll back the availability of general computation so common people can only own computers with enough power to be glorified thin clients. The way this might look is good hardware never officially being banned, just priced too high for anybody to afford, and produced in small quantities to keep it that way while all production shifts to making massively expensive powerful hardware for corporate buyers.
lelanthran 7mo ago
> I think it’s pretty clear what the purpose of this stuff is: get people so invested into the Claude ecosystem with certs and “modernization kits”, so that when the subsidies end and subscription costs shoot up they feel they’re in too deep now to switch to something cheaper. It worked for cloud services :-)
- staticassertion 7mo ago
  Did it? AWS seems to be getting cheaper over time, not more expensive.
  - lelanthran 7mo ago
    > Did it? AWS seems to be getting cheaper over time, not more expensive. It was cheaper prior to them issuing certificates, then it got expensive.
    - staticassertion 7mo ago
      Do you have a source for that? Certainly things like compute and other services that I'm aware of are objectively cheaper, so I'm curious what has gone up.
thepasch 7mo ago
> so that when the subsidies end and subscription costs shoot up Subscription costs are capped to API rates as their ceiling (and, realistically, way lower than that - why would you even subscribe if you could just go pay-what-you-use instead), and those are already at a big margin for Anthropic. What still costs them a fuckton of money comparatively is training, but that is only going to get more efficient with more purpose-built hardware on the way. Basicallly, I don’t see much of a reason to hike subscription prices dramatically. I don’t think they’ll stay at $100/$200 but anyone who’s paying that already knows how much value they’re getting out of that and probably wouldn’t mind paying more.
- OJFord 7mo ago
  I'm not sure what you mean, if you max out your subscription perhaps? If you pay $100 and don't use it, you don't get refunded $100 because it's 'capped to API rates' which would've been 0.
  - ffsm8 7mo ago
    He means that anthropic cannot increase the price of the sub because the users can just switch to the regular API pricing which consequently puts a ceiling on the cost of the sub. Nobody would use a $1k sub if using the API pricing would only cost $500 for comparative service. For the record, I'm only explaining what he put forward. I don't agree with the opinion, mainly for two reasons: The API cost can be increased in conjunction, hence the ceiling is just as variable The harness is even more important then the model ime, and Claude Code is getting better every month. Even though the alternatives are getting better too, they're at least currently significantly worse IME - I'd say at least 3-6 months behind (compounded by the model, ofc). And as a third point, unrelated to the original argument: there is no way anthropic is actually treating the sub as a loss leader. It is not cheap. It's only cheap compared to their API pricing, which they can freely set however they want. Compare their pricing to free models like Kimi k2.5 etc. I sincerely doubt anthropics model costs more to run then theirs, and they're profitable at 30% of the price anthropic charges.
    - 7mo ago
cyanydeez 7mo ago
Enshittifocation x rent seeking is the future of aithoritarian capitalism. I recommend everyone explore local models.

ImaCake 7mo ago

Or what if local models get good enough to threaten the server based product?

otabdeveloper4 7mo ago
They're good enough already. The moat is only a) post-training magic for the elusive UX "vibes" b) stickiness of the Claude UI's. The first part will be eventually (give it a couple years) solved by a LoRA marketplace. The second is not relevant because existing UI's are very sticky already and Claude won't be able to overcome decades of inertia anyways.
- mock-possum 7mo ago
  That and the price of hardware
edf13 7mo ago
That is the biggest threat - and likely where things will end up eventually… it’s when that “eventually” is and what the server based providers can pivot to in that time.
nosefurhairdo 7mo ago
Seems unlikely. We're already seeing specialized hardware optimized for LLM performance (taalas, groq, cerebras), and simple economies of scale result in these sorts of products being a better value when rented from a server vs purchased/managed/upgraded for the typical the user. Frontier models will continue to be either exclusively available from servers or significantly more affordable from servers vs local alternatives for the foreseeable future.
mikkupikku 7mo ago
This will probably happen unless the industry conspires to roll back the availability of general computation so common people can only own computers with enough power to be glorified thin clients. The way this might look is good hardware never officially being banned, just priced too high for anybody to afford, and produced in small quantities to keep it that way while all production shifts to making massively expensive powerful hardware for corporate buyers.

lelanthran 7mo ago

> I think it’s pretty clear what the purpose of this stuff is: get people so invested into the Claude ecosystem with certs and “modernization kits”, so that when the subsidies end and subscription costs shoot up they feel they’re in too deep now to switch to something cheaper. It worked for cloud services :-)

staticassertion 7mo ago
Did it? AWS seems to be getting cheaper over time, not more expensive.
- lelanthran 7mo ago
  > Did it? AWS seems to be getting cheaper over time, not more expensive. It was cheaper prior to them issuing certificates, then it got expensive.
  - staticassertion 7mo ago
    Do you have a source for that? Certainly things like compute and other services that I'm aware of are objectively cheaper, so I'm curious what has gone up.

thepasch 7mo ago

> so that when the subsidies end and subscription costs shoot up Subscription costs are capped to API rates as their ceiling (and, realistically, way lower than that - why would you even subscribe if you could just go pay-what-you-use instead), and those are already at a big margin for Anthropic. What still costs them a fuckton of money comparatively is training, but that is only going to get more efficient with more purpose-built hardware on the way. Basicallly, I don’t see much of a reason to hike subscription prices dramatically. I don’t think they’ll stay at $100/$200 but anyone who’s paying that already knows how much value they’re getting out of that and probably wouldn’t mind paying more.

OJFord 7mo ago
I'm not sure what you mean, if you max out your subscription perhaps? If you pay $100 and don't use it, you don't get refunded $100 because it's 'capped to API rates' which would've been 0.
- ffsm8 7mo ago
  He means that anthropic cannot increase the price of the sub because the users can just switch to the regular API pricing which consequently puts a ceiling on the cost of the sub. Nobody would use a $1k sub if using the API pricing would only cost $500 for comparative service. For the record, I'm only explaining what he put forward. I don't agree with the opinion, mainly for two reasons: The API cost can be increased in conjunction, hence the ceiling is just as variable The harness is even more important then the model ime, and Claude Code is getting better every month. Even though the alternatives are getting better too, they're at least currently significantly worse IME - I'd say at least 3-6 months behind (compounded by the model, ofc). And as a third point, unrelated to the original argument: there is no way anthropic is actually treating the sub as a loss leader. It is not cheap. It's only cheap compared to their API pricing, which they can freely set however they want. Compare their pricing to free models like Kimi k2.5 etc. I sincerely doubt anthropics model costs more to run then theirs, and they're profitable at 30% of the price anthropic charges.
  - 7mo ago

cyanydeez 7mo ago

Enshittifocation x rent seeking is the future of aithoritarian capitalism. I recommend everyone explore local models.