at their scale they could also just run a large on-premise or rented (basically still cloud, but cheaper) GPU cluster and run through that. fixed costs, even license a SOTA model’s weights if you’d like
If the large, well founded IT companies in the world believes the current AI cost is to high, then Anthropic, OpenAI and CoPilot have no actual customer base. AI is then relegated to very profitable niche business, but that can't fund the R&D for the models.
Also, I don't believe you need to spend $1500 a month on a coding agent if you optimize usage at all.
For the employer those employees cost between 2945 - 7736 EUR per month based on https://kalkulatori.lv/lv/algas-kalkulators (income and social taxes).
So on the lower end that's (1500 USD ~ 1300 EUR) close to half the total expenses of such a developer, on the high end here around 15-20%. That's quite significant, depends on whether their productivity also improves (if that's what the orgs care about).
And we’re not even the country with the worst pay out there, but pay the same for tokens, cause regional pricing isn’t a thing!
Even here, companies don't really trust Eastern providers that much, so they'd be looking for someone in the EU running DeepSeek instances, which might come with a bit of markup. Those orgs would also sometimes be weary of OpenRouter which to me seems like shooting yourself in the foot by being so picky.
That said, DeepSeek V4 Pro (with Max reasoning) is pretty okay and I'm using it instead of Opus 4.8 (my Max 100 USD subscription weekly limits ran out today) and it can do stuff passably (even better than Mistral's offering and has nice context window), but compared to the amount of work I can get done with Anthropic's models, it keeps occasionally fucking up and I have to go back and correct it, so lots of token waste. Maybe it's close to SOTA from 6-12 months ago, though, which is pretty cool on its own, though - just less confidence in its output.
It's like trying to limit the costs and therefore not gaining the maximum added value from the technology. Similarly for those trying to run stuff on-prem, we don't really have the electrical grid here for large scale inference in-country, nor is anyone exactly salivating at the idea of dropping multiple tens of thousands of EUR to build out something passable. I do host some stuff on a bunch of Nvidia L4 cards (Qwen3.6 35B A3B) and while the model has its uses, it's also a far cry from SOTA.
So I guess it depends - compared to an Anthropic subscription it kinda sucks, but then again if you have to pay for Anthropic's tokens those are robbery and then DeepSeek looks like a no-brainer alternative.
Yeah, I bet all labs releasing SOTA models are more than happy to remove the main way they make money and let you run it locally, especially if you're a big spender like Uber who seems very willing to throw money into the sea as an experiment.
Anthropic and OpenAI license to the public clouds. Google reportedly licenses to Apple. licensing to Fortune 100 companies running on their own infra is an obvious next step
it is a race to the bottom and I’m not sure the labs win that race. we’ll see!