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Comment by arw0n | Hacker News Reader

I love their product and use them myself. But where's the value proposition for investors? Unless they get purchased by one of the large cloud providers, they will get pushed out of the market sooner or later.

What's the value proposition for the typical AWS startup to go with openrouter, if Amazon offers similar rates with direct integration into all their other offerings?

The only reason OpenRouter can exist at the moment is because we are in the wild-west phase of this technology, and lots of people and companies are exploring. In 5 years they will have to have transformed their business fundamentally, or go the way of the dinosaurs.

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If you believe there will be lots of LLM providers in the future, then OpenRouter could be a DoorDash play.

Established restaurants didn't need DoorDash because they were already on everyone's speed dial. But new or small restaurants couldn't afford to advertise or maintain a team of delivery people. DoorDash created a two-sided marketplace that made it a lot easier for new entrants to bootstrap. Today even the established restaurants have to pay them their tithe because hungry people have learned to start with the DoorDash app. A bit of a prisoner's dilemma.

If OpenRouter plays its cards right and gets very lucky, a large number of people will configure their hungry LLM clients to start with OpenRouter, and then LLM providers will have to join the marketplace or else miss out on all those customers.

not sure that works as well when they don't own their API though; how much software is openrouter-only in a way that's not 5min of deepseek to patch the source for, or 15min of opus to patch the binary instead

Everyone (except Anthropic) seems to be settling on the same API, so nobody "owns it" anymore. I expect there to be practically no software that's OpenRouter-only.

https://openresponses.org/

I agree that technical lock-in wouldn't cause the consolidation. Instead, if it happened, it would be because of the network effects of the two-sided platform.

People could email cat photos and resumes. But Facebook and LinkedIn are where everyone already is, so that's what they use instead.

DoorDash is viable only because the restaurant business (minus national chains) is extremely balkanized. Restauranteurs have very little power.

They never claimed it was technically hard. Brand recognition is their forte. They found out there is a need, developped a product around it.

AWS does not provide nearly as many different models as OpenRouter. Perhaps they have an incentive to not do that, move slower as a big company or more legal risks to consider. If AI model outputs becomes commoditized then having one place where you can switch effortlessly from one to the next based on price might just justify OpenRouter. It could become a commodity marketplace/exchange.

functionally they operate as a marketplace for cloud providers. I feel like there is value there, especially as API costs rise and companies explore cost-saving/efficiency. IMO, this is a particularly attractive value prop in the SMB space, where it is common to interoperate between multiple SaaS/software stacks.

Yah I don’t think they have a long term play without a pivot

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