4 ms·

This method of bundling should be illegal in general, as it stiffles competition.

by cyberax 4mo ago

jack_pp 4mo ago
How does it stifle competition / innovation? You can use other harnesses, pay API for anthropic models or cheap chinese models. You're just upset that you don't get to use their VC money the way you want to use it lol. It either is a good deal or it isn't, if it is just say, thanks free VC money, if it isn't say fuck you.
- thfuran 4mo ago
  Any service or product delivered at a loss seems pretty plainly anti-competetive. Whether it is actually subsidized to that extent, I’m not sure.
  - dcrazy 4mo ago
    The entire LLMaaS industry is priced below cost. Even if the marginal cost of electricity and bandwidth to produce one token is less than the price of that token, the amortized infrastructure and R&D costs make the entire venture unprofitable. If pricing below cost were illegal, it would essentially make starting up a business—any business—impossible.
    - wqaatwt 4mo ago
      You can’t calculate what that cost is though regardless. If the gross margin is positive you can’t confidently challenge their longterm growth projections however optimistic or unrealistic they are.
  - simianwords 4mo ago
    you have no evidence that it is served at a loss
  - xoa 4mo ago
    >Any service or product delivered at a loss seems pretty plainly anti-competitive. You have to get into the weeds though on what exactly counts as a "product delivered". Like, Apple doesn't charge for new versions of macOS. But are "Macs" separate stacks together or are they the fusion of hardware and software, and if so on what levels? There are all sorts of products surrounding us that are running software that we still treat as unified objects after all, right down to smart light bulbs or a "plain" lithium battery pack which still requires controllers to manage charging and USB negotiation etc. Chips and software are in tons and tons of "basic" hardware stuff yet we just buy the object as a singular entity. I'm not saying that dumping can't be a thing but the lines aren't always clear cut either. You also have to get into bog standard business scaling issues and profit vs investment. If you take on debt to invest in capital that you believe will lower per unit costs if you build enough volume and then turn a profit, you're "selling at a loss" but that's how tons of business works, that's why there is risk right? Doesn't seem good to discourage that. It seems more fruitful to approach things from the perspective of monopolies, competition, corporate governance etc in general, granted not that a lot of governments have been great about that either in recent history.
    - mishellaneous 4mo ago
      this is a good point. > It seems more fruitful to approach things from the perspective of monopolies, competition, corporate governance etc in general where to go to learn more about these topics?
  - wqaatwt 4mo ago
    Well if their gross margins are positive (I really doubt they aren’t) there isn’t much of a case to be made. You can expect meaningful R&D and capital investments to pay off short term and you can’t make any meaningful projections either to determine if they are dumping or not.
- bee_rider 4mo ago
  Because the US models haven’t had to compete on the actual price of providing the unsubsidized service, the Chinese models are probably ahead of us in terms of what can actually be delivered profitably (which is a pretty bad result given the level of investment).
- cyberax 4mo ago
  It would make it impossible for makers of 3rd-party harnesses to compete with Claude Code. This principle is not just limited to LLMs. > You're just upset that you don't get to use their VC money the way you want to use it lol. I don't particularly care about Claude or harnesses.
  - jack_pp 4mo ago
    the fact that there are 10+ harnesses means you are wrong. Also, if other harnesses need to work without the literal SOTA then they need to be better than Claude Code. If their incentive is to reduce token usage then again, they will evolve to be better than CC
dcrazy 4mo ago
Do you also think all you can eat buffets should be illegal? What about early bird specials? Free soda with a large fry? Happy hour wings? Where does the “bundling” end?
- butlike 4mo ago
  1.) All you can eat buffets ARE the product, not a loss leader, so there's no bundle there. 2.) Early bird specials, again, aren't loss leaders. They're a way to get sales on the left side of the bell curve. The restaurant food is still the product, not a subsidy. 3.) Free soda with large fry doesn't actually exist (though it sounds like it should, right?) 4.) Happy hour wings (again, see #2) None of these are bundling so I don't really get why you bothered to comment
  - jefftk 4mo ago
    > Free soda with large fry doesn't actually exist I just searched and found free medium fries with a large soda at McD if you order through the app. Seems like bundling to me, and you have to use their particular app.
    - cyberax 4mo ago
      Sure, and perhaps it should be prohibited. But it's also a matter of impact. But it's just hard to care too much about a commoditized product and an app with tons of competition. And McDonald's is not keeping any competitors away by locking their fries offer behind their app.

This method of bundling should be illegal in general, as it stiffles competition.

by cyberax 4mo ago

This method of bundling should be illegal in general, as it stiffles competition.

How does it stifle competition / innovation? You can use other harnesses, pay API for anthropic models or cheap chinese models. You're just upset that you don't get to use their VC money the way you want to use it lol. It either is a good deal or it isn't, if it is just say, thanks free VC money, if it isn't say fuck you.

thfuran 4mo ago
Any service or product delivered at a loss seems pretty plainly anti-competetive. Whether it is actually subsidized to that extent, I’m not sure.
- dcrazy 4mo ago
  The entire LLMaaS industry is priced below cost. Even if the marginal cost of electricity and bandwidth to produce one token is less than the price of that token, the amortized infrastructure and R&D costs make the entire venture unprofitable. If pricing below cost were illegal, it would essentially make starting up a business—any business—impossible.
  - wqaatwt 4mo ago
    You can’t calculate what that cost is though regardless. If the gross margin is positive you can’t confidently challenge their longterm growth projections however optimistic or unrealistic they are.
- simianwords 4mo ago
  you have no evidence that it is served at a loss
- xoa 4mo ago
  >Any service or product delivered at a loss seems pretty plainly anti-competitive. You have to get into the weeds though on what exactly counts as a "product delivered". Like, Apple doesn't charge for new versions of macOS. But are "Macs" separate stacks together or are they the fusion of hardware and software, and if so on what levels? There are all sorts of products surrounding us that are running software that we still treat as unified objects after all, right down to smart light bulbs or a "plain" lithium battery pack which still requires controllers to manage charging and USB negotiation etc. Chips and software are in tons and tons of "basic" hardware stuff yet we just buy the object as a singular entity. I'm not saying that dumping can't be a thing but the lines aren't always clear cut either. You also have to get into bog standard business scaling issues and profit vs investment. If you take on debt to invest in capital that you believe will lower per unit costs if you build enough volume and then turn a profit, you're "selling at a loss" but that's how tons of business works, that's why there is risk right? Doesn't seem good to discourage that. It seems more fruitful to approach things from the perspective of monopolies, competition, corporate governance etc in general, granted not that a lot of governments have been great about that either in recent history.
  - mishellaneous 4mo ago
    this is a good point. > It seems more fruitful to approach things from the perspective of monopolies, competition, corporate governance etc in general where to go to learn more about these topics?
- wqaatwt 4mo ago
  Well if their gross margins are positive (I really doubt they aren’t) there isn’t much of a case to be made. You can expect meaningful R&D and capital investments to pay off short term and you can’t make any meaningful projections either to determine if they are dumping or not.
bee_rider 4mo ago
Because the US models haven’t had to compete on the actual price of providing the unsubsidized service, the Chinese models are probably ahead of us in terms of what can actually be delivered profitably (which is a pretty bad result given the level of investment).
cyberax 4mo ago
It would make it impossible for makers of 3rd-party harnesses to compete with Claude Code. This principle is not just limited to LLMs. > You're just upset that you don't get to use their VC money the way you want to use it lol. I don't particularly care about Claude or harnesses.
- jack_pp 4mo ago
  the fact that there are 10+ harnesses means you are wrong. Also, if other harnesses need to work without the literal SOTA then they need to be better than Claude Code. If their incentive is to reduce token usage then again, they will evolve to be better than CC

dcrazy 4mo ago

Do you also think all you can eat buffets should be illegal? What about early bird specials? Free soda with a large fry? Happy hour wings? Where does the “bundling” end?

butlike 4mo ago
1.) All you can eat buffets ARE the product, not a loss leader, so there's no bundle there. 2.) Early bird specials, again, aren't loss leaders. They're a way to get sales on the left side of the bell curve. The restaurant food is still the product, not a subsidy. 3.) Free soda with large fry doesn't actually exist (though it sounds like it should, right?) 4.) Happy hour wings (again, see #2) None of these are bundling so I don't really get why you bothered to comment
- jefftk 4mo ago
  > Free soda with large fry doesn't actually exist I just searched and found free medium fries with a large soda at McD if you order through the app. Seems like bundling to me, and you have to use their particular app.
  - cyberax 4mo ago
    Sure, and perhaps it should be prohibited. But it's also a matter of impact. But it's just hard to care too much about a commoditized product and an app with tons of competition. And McDonald's is not keeping any competitors away by locking their fries offer behind their app.