4 ms·

> In a world where open-weight models dominate, the proprietary frontier models of Anthropic and OpenAI will find it virtually impossible to charge monopolistic

by ericmay 2mo ago

> In a world where open-weight models dominate, the proprietary frontier models of Anthropic and OpenAI will find it virtually impossible to charge monopolistic pricing. Maybe they can't charge monopolistic pricing (there's a few market entrants anyway today), but they can still charge premium pricing. Also two things can be true at once. American and western AI companies or other companies can rightly be part of the chain of general concern from western societies about anti-democratic authoritarian regimes (Iran + friends, China, Russia, North Korea, Cuba, &c.) getting ahold of technology while simultaneously also being worried about losing their market position and seeking regulatory rules to entrench themselves against actors who do not share the same values and seek to undermine western businesses with trade practices that are intolerable to our societies.

theplumber 2mo ago
They will be like Windows Server. Expensive, restricted and overall worse than the open stuff but somehow sill generate some sales
- ericmay 2mo ago
  No they won't. They'll offer far superior models at a premium price and they'll capture most of the profits similar to iPhone versus the Android manufacturers. US companies will also release open source models and lower-cost options that will compete with any open source models released by any other country, except when you ask US/western models what happened at Tiananmen Square they'll give you an answer instead of being blocked by an authoritarian government. Whenever I have these conversations it's like, ok do I believe the incredibly smart people running Google, Facebook, Nvidia, OpenAI, Anthropic, Apple, Amazon, and more who have careers, companies, and trillions of dollars at stake, or do I believe random people on the Internet who say "Open AI and Anthropic will be like Windows Server and open-source models will be better"? Without extremely strong evidence to the contrary, I'm going to go with what the smartest people in the room are doing. The model and economics make a lot more sense, and fears about Chinese open source models are overblown. When you're behind and frantic you release open source software. If American companies somehow fall behind they'll just release their own better open source software/models and undercut China using the exact same strategy. So either both sides get to employ this strategy and neither has an advantage, or the spend and research matter and America for now has an advantage.
  - bryanlarsen 2mo ago
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” - Upton Sinclair
    - ericmay 2mo ago
      This applies to open-source evangelists and developers too.
  - platevoltage 2mo ago
    The incredibly smart people aren't the ones running those companies. They're the ones actually creating the products.
  - bigyabai 2mo ago
    > They'll offer far superior models at a premium price > US companies will also release open source models and lower-cost options This is wishcasting. People are raising the alarm because models like GLM-5.2 and Kimi K3 have already displaced demand for frontier models in highly demanding fields like security research. There's no amount of money that you can pay for "premium" access to Mythos, so those researchers are taking their money to inference providers that give them comparable models. It's okay if this is your prediction, but it's not particularly grounded in the present scenario. > ok do I believe the incredibly smart people running Google, Facebook, Nvidia, OpenAI, Anthropic, Apple, Amazon, and more Why do you conflate all of these businesses with vastly different business strategies to one another? Apple and Facebook do not have the same AI strategy, same for Amazon and Nvidia or Google and OpenAI. Many of these businesses made expressly terrible choices that hamstrung their ability to capitalize on AI profits. FAIR failed to scale their early Llama models into a service; Apple abandoned OpenCL too early and invested in a dark-silicon NPU coprocessor instead of supporting CUDA's multi-trillion dollar ARM rollout; Google went all-in on hardware research and failed to create a frontier model that moved significant tokens; OpenAI forfeit the frontier to Anthropic, and Anthropic bent over backwards to appease American censorship demands and push cringeworthy marketing campaigns to capture LLM mindshare with Claude. There is no "American companies" coalition. They're all reacting in drastically different ways and your eagerness to conflate them suggests that you don't have any real position outside tribalist "us vs them" pugilism.
empath75 2mo ago
> In a world where open-weight models dominate, the proprietary frontier models of Anthropic and OpenAI will find it virtually impossible to charge monopolistic pricing. It'll never be economical to run open-weight models compared to paying per token from the big providers. The cost is going to be roughly proportional to energy inputs over time, and they're going to be the ones that have the scale and engineering ability to knock it down.
- bryanlarsen 2mo ago
  But it will be much more economical to pay per token to discount providers running open weight models.
  - empath75 2mo ago
    Those providers are not going to end up being price competitive with the big labs unless they are running at the scale of the big labs.
thisisit 2mo ago
Sometimes people say AI is the next big thing since the internet and at other it is like cloud computing where companies can charge premium. Both cannot be true at the same time. If you look back in the early days there were premium ISP providers with better up times and stable speeds. In the long run none have survived because everyone has caught on. If AI is important then there is always going to be incentive to try something cheaper even if it is not the best - especially on enterprise budgets and the costs can be offloaded to the customer somehow - if the uptime and service stability is guaranteed by a third party provider.

by ericmay 2mo ago

theplumber 2mo ago

They will be like Windows Server. Expensive, restricted and overall worse than the open stuff but somehow sill generate some sales

ericmay 2mo ago
No they won't. They'll offer far superior models at a premium price and they'll capture most of the profits similar to iPhone versus the Android manufacturers. US companies will also release open source models and lower-cost options that will compete with any open source models released by any other country, except when you ask US/western models what happened at Tiananmen Square they'll give you an answer instead of being blocked by an authoritarian government. Whenever I have these conversations it's like, ok do I believe the incredibly smart people running Google, Facebook, Nvidia, OpenAI, Anthropic, Apple, Amazon, and more who have careers, companies, and trillions of dollars at stake, or do I believe random people on the Internet who say "Open AI and Anthropic will be like Windows Server and open-source models will be better"? Without extremely strong evidence to the contrary, I'm going to go with what the smartest people in the room are doing. The model and economics make a lot more sense, and fears about Chinese open source models are overblown. When you're behind and frantic you release open source software. If American companies somehow fall behind they'll just release their own better open source software/models and undercut China using the exact same strategy. So either both sides get to employ this strategy and neither has an advantage, or the spend and research matter and America for now has an advantage.
- bryanlarsen 2mo ago
  “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” - Upton Sinclair
  - ericmay 2mo ago
    This applies to open-source evangelists and developers too.
- platevoltage 2mo ago
  The incredibly smart people aren't the ones running those companies. They're the ones actually creating the products.
- bigyabai 2mo ago
  > They'll offer far superior models at a premium price > US companies will also release open source models and lower-cost options This is wishcasting. People are raising the alarm because models like GLM-5.2 and Kimi K3 have already displaced demand for frontier models in highly demanding fields like security research. There's no amount of money that you can pay for "premium" access to Mythos, so those researchers are taking their money to inference providers that give them comparable models. It's okay if this is your prediction, but it's not particularly grounded in the present scenario. > ok do I believe the incredibly smart people running Google, Facebook, Nvidia, OpenAI, Anthropic, Apple, Amazon, and more Why do you conflate all of these businesses with vastly different business strategies to one another? Apple and Facebook do not have the same AI strategy, same for Amazon and Nvidia or Google and OpenAI. Many of these businesses made expressly terrible choices that hamstrung their ability to capitalize on AI profits. FAIR failed to scale their early Llama models into a service; Apple abandoned OpenCL too early and invested in a dark-silicon NPU coprocessor instead of supporting CUDA's multi-trillion dollar ARM rollout; Google went all-in on hardware research and failed to create a frontier model that moved significant tokens; OpenAI forfeit the frontier to Anthropic, and Anthropic bent over backwards to appease American censorship demands and push cringeworthy marketing campaigns to capture LLM mindshare with Claude. There is no "American companies" coalition. They're all reacting in drastically different ways and your eagerness to conflate them suggests that you don't have any real position outside tribalist "us vs them" pugilism.

empath75 2mo ago

> In a world where open-weight models dominate, the proprietary frontier models of Anthropic and OpenAI will find it virtually impossible to charge monopolistic pricing. It'll never be economical to run open-weight models compared to paying per token from the big providers. The cost is going to be roughly proportional to energy inputs over time, and they're going to be the ones that have the scale and engineering ability to knock it down.

bryanlarsen 2mo ago
But it will be much more economical to pay per token to discount providers running open weight models.
- empath75 2mo ago
  Those providers are not going to end up being price competitive with the big labs unless they are running at the scale of the big labs.

thisisit 2mo ago

Sometimes people say AI is the next big thing since the internet and at other it is like cloud computing where companies can charge premium. Both cannot be true at the same time. If you look back in the early days there were premium ISP providers with better up times and stable speeds. In the long run none have survived because everyone has caught on. If AI is important then there is always going to be incentive to try something cheaper even if it is not the best - especially on enterprise budgets and the costs can be offloaded to the customer somehow - if the uptime and service stability is guaranteed by a third party provider.