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It is amazing how we watch from the sidelines these aquisitions and think .... why such big bill ? But it takes a good team to sell and everytime someone is su
by srameshc 1mo ago
It is amazing how we watch from the sidelines these aquisitions and think .... why such big bill ? But it takes a good team to sell and everytime someone is successful it is because probably they have great sellers who believe in their value and demand a price. It is certainly not an easy task to get to the finish line for a startup and pay back their investors.
- abixb 1mo agoCurious on what OpenRouter's true moat is? It's just an LLM API routing framework, right?
- rkangel 1mo agoYeah, and Stripe is "just" a payments platform. Openrouter is easy, reliable and performant (like Stripe).
- abixb 1mo ago[dead]
- bubblegumcrisis 1mo agoAlso it's name has "open" in it. Which means you can do what you want with it, and it's all open source! Just the other day, I tried to have openrouter route to my local ollama, and it refused. Apparently I have to pay for this privilege. How wonderful. Open open (op)en. Open open (op)en. Clo-o-o-ooooo-sed.. (sing with Wagner flight of the V)
- Animats 1mo agoNow that's the value. OpenRouter has the power to step on the air hose of any provider they don't like. That's Google's real power. Works for them. Between search, ads, and the "app store", they can crush most companies. OpenRouter's power is only in one area. For now.
- Nextgrid 1mo ago> Stripe is "just" a payments platform Counterpoint: you can't just go to Visa/Mastercard or a merchant acquirer out there and set up an account on the same terms that Stripe can. On the other hand, you can sign up to any LLM provider and get API access on terms that are the same or better (since I'm sure they don't appreciate having a middleman and would benefit from incentivizing direct usage) than OpenRouter gets.
- GTP 1mo agoYes, you can get better pricing if you do it yourself. But the true advantage of OpenRouter is that, in a space where there's a new model being released every week, you can easily switch to whatever model is best at any given time without having to set up accounts with multiple providers. Or you can just experiment with the latest release. Their product is the convenience. Of course if you decide to only use a specific provider or two, then you don't need OpenRouter.
- rob-lag 1mo agoBut it's not really that difficult to make a clone of OpenRouter's service. What they do isn't really that original. Their only value comes from the fact that the currently have lots of traffic. And I dkn't think that their cumstomers are really bound to theur servuce. They could switch to a competitor without too much hassle.
- GTP 1mo agoYes, but as l9ng as there's no clone, they're good. On the potential clone side, I guess many will be put off by the fact that "there's already OpenRouter". Also, a clone would need to find a way to make existing OpenRouter customers to switch, which isn't easy.
- ahepp 1mo agoWill that necessarily be true in the future? Would we not expect that openrouter will develop the ability to negotiate special pricing?
- 1mo ago
- xmcp123 1mo agoThere are already other providers that can say the same, some with very small teams and better rates.
- nonethewiser 1mo agoYeah and the kids down the street are “just” a lemonade stand.
- verdverm 1mo agoStripe operates in a very regulated industry where new entrance is difficult OpenRouter is commodity stuff, I've never used it personally and picked alternatives. The sense I got from people who said they used it was that they are on average penny pinchers. That does not seem like an ideal user base
- BeetleB 1mo agoPayments is quite hard, actually. Payment platforms existed for years before Stripe came along. They solved the problems the others couldn't.
- macNchz 1mo agoHaving worked on web apps that processed online payments before and after Stripe I totally agree, this was an area of real pain that became suddenly extremely simple because of Stripe. The alternatives were terrible–100 page Word docs of SOAP API docs for Authorize.net, massive PCI compliance requirement specifications, horrible legacy merchant services businesses. On the other hand, I operate an app that talks to (and logs prompts/meters costs) to many different LLM API providers, and I do not consider it painful at all. I have an AI agent to deal with any integration quirks, if needed. Mostly they provide OpenAI-compatible APIs anyhow. It's basically a no-brainer to go direct with the providers and save 5%, the great majority of the cost of an AI-powered app is no longer dev time implementing the integration, it's the tokens themselves.
- meric_ 1mo agoOpenRouter is already the entrenched go-to router tbh. There's competitors (Vercel) but they're already well known. Stripe can also make them more competitive because they can waive / profit off the transaction cost. Considering stripe takes like a 3% fee, and the openrouter markup is 5%, that's a pretty big boost. Now is that enough revenue to earn back 7B.... I'm not too sure. I guess they're betting realy big that these sorts of model routers will gain explosive token usage in the future
- scrollop 1mo agoAnd trustedrouter which is a bit cheaper and more private
- johndough 1mo agoDoesn't TrustedRouter cost more than OpenRouter? (5.5% markup vs 5%) Also, TrustedRouter's website is full of slop, which does not inspire much confidence.
- aleqs 1mo agoI don't get the 'transaction fee reduction' arguments. Yeah they can reduce the fee, which in turn reduces profit margin... any other product/service in a similar position can do the same... it's not some sort of free win
- kridsdale1 1mo agoThis was the same thinking behind Vanguard funds.
- aleqs 1mo agoNot the same at all.
- petesergeant 1mo agoOpenRouter’s “moat” is currently “why would I use anything else?”. Stripe has presumably only purchased them because they think there’s consumer-surplus to monetize here, which presumably will soon be giving me lots of reasons to use something else.
- bellowsgulch 1mo agoOpenCode Go is too good to be true, and I suspect it won't last, like GitHub Copilot.
- xmcp123 1mo agoBecause the others are cheaper
- LPisGood 1mo agoThe others have to charge a payment processing fee and take some profits.
- petesergeant 1mo agoWhich other aggregators that have anywhere near the model selection are cheaper?
- tomjakubowski 1mo agoIt isn't clear to me what advantages OpenRouter has over running a similar router-aggregator locally for ~free. I guess they have stronger bargaining power than a solo engineer or small startup, and can therefore negotiate volume discounts with model providers. The question is if those discounts let them offer cheaper rates than a local router-aggregator even after the markup. And if they can do that, then OpenRouter is undercutting the providers themselves on price, which I would imagine the providers would not want to see.
- glerk 1mo agoI presume they are sitting on a lot of usage data and will be able to roll out efficient auto-routing based on it. There is a huge demand for this as most users are overwhelmed by provider options and just want to route to the best/cheapest model based on the task.
- Arshad-Talpur 1mo agoI dont know exactly but dont you think 90% of Vertical AI Companies are doing same?
- dzink 1mo agoAs with Cursor it's the data - all the prompts and responses that can be used to train AI models. Getting a head start on that at the pace of current development costs.
- jm4 1mo agoThey are the leading LLM API routing tool. Stripe is the leading payments API. They are betting on OpenRouter being as important to developers as payments. Both let them take a small percentage of a shitload of transactions. Being the goto service for APIs and executing well is the moat. Someone else would have to beat the volume leader on price or beat them on execution. Good luck. The only realistic competitors would be Amazon, Google or Microsoft and none have shown any interest so far.
- roncesvalles 1mo agoI don't understand why one would let a router handle their LLM request (other than for routing it to the cheapest inference provider for open models). When I build an application that uses LLMs, it's tuned and tested for a specific model only. LLMs are not really drop-in replacements of each other, even different versions of the same series. The pertinent question isn't why OpenRouter but why a router company is worth 7B.
- jm4 1mo agoYou can use one key for multiple models, you can have many keys with a budget on each, you can manage all your keys in one piece of glass, you don't have to deal with the upstream vendors directly just to name a few. These are all things that may be important to developers. I can't even get an OpenAI API key because those morons can't get their phone verification to work properly. OpenRouter is the only way I can use their models.
- hgoel 1mo agoI think it's kind of like what GitHub has despite getting rid of the quota system for Copilot: existing customers that are already setup to deal with them. In this case I imagine that OpenRouter's moat is going to be that businesses that already use Stripe will have a lower bar to choosing OpenRouter to provide the AI access, and clean integration with Stripe to pay for stuff like AI support bots.
- dreamofwaves 1mo agoIsn't copilot a cheaper harness than claude code and offers more flexibility?
- hgoel 1mo agoI don't know about cheaper. The flexibility is kind of what I'm pointing to, if I understand you right. Instead of dealing with Anthropic, OpenAI, XAi etc directly and having systems to handle user assignment, budgeting etc for each, companies just deal with GitHub, which they've probably been dealing with anyway.
- BeetleB 1mo agoThey have enough customers to have leverage against providers. As an example, if they decide they can be "punished" if they claim ZDR but lie about it.
- viccis 1mo agoCorollary to this is that whenever companies acquire smaller companies and lay off the small company's sales teams, they deserve what they get. Looking at you, big company that turned my last one from nearly a billion valuation into a $20M fire sale in 3-4 years.
- esafak 1mo agoIf you meant that generally: because productivity is increasing; the world is getting richer. Not all of it flows down, but some does; top SV salaries are up too. By a lot. edit: Inflation does not account for the observed growth.
- jakebol 1mo agoWe are certainly seeing higher monetary velocity in certain sectors. That usually follows from real economic expansion but could also be due in part to inflation.
- shafyy 1mo agoIt's just the same VCs moving money from one pocket to the other.
- baxtr 1mo agoMinor nitpick: don’t confuse sales with negotiations. Negotiations start when sales is done. These were highly capable negotiators. But most likely also good salesmen.