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> there's obviously a question on how/why are they lowering the prices so much.

Same reason they release some of the models for free: They are trying to capture market share.

The difference is that releasing the model for free doesn't have ongoing cost for the company. Providing cheap tokens is very expensive - specially if you don't have access to the latest transistor node chips. So I think the parent comment is right, there's something else at play allowing DS and Xiaomi to offer these nearly free tokens.

LLM providers can't "capture" anything. People loved Claude Code because it was cheap and good. Not cheap anymore? People switching to Codex, DS4 etc.

Their only moat is maybe being SOTA but that only lasts so long before everyone else catches up.

I mean there is a minor moat. Most people don't enjoy switching providers or models. If you can get people to trust you'll stay near frontier, they'll stick around even when you aren't the best. Claude is a prime example of this

This is why they are pushing more for non-tech folks to use their products with desktop apps. They are not going to switch on a whim.

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