Hang on to your wallet, you ain't seen nothing yet.
The true cost of AI won't be revealed until after a large portion of the customer base has become "hooked" on it.
The true cost of AI won't be revealed until after a large portion of the customer base has become "hooked" on it.
I’m happily paying $200/mo for Claude code. The tokens I use would be >$10k at API rates. I’m building the best products of my life, and multiple of them in parallel. I’m doing better creative work, finally realizing a game idea I’ve had no time for, etc.
If this level of usage goes to $500/mo… I’ll be out. It’s worth what I’m paying, but hey I went a decade without writing that song or building that game. It’s not freaking heroin, it’s a tool that offers a good value for what I pay.
Could be wrong though.
That combined with the relatively easy switching costs. It doesn't bode well for AI companies seeking to create a walled garden.
* Hardware improvements will reduce costs
* Model training improvements (read: more efficient model training) will reduce costs
* Better models will reduce costs (more inference for less hardware time while keeping quality constant)
* Tooling and platform will stabilize—less need to dump money into applications and backend systems because they will become mature—also improvements in AI efficiency and quality will lower the cost of maintenance and future feature development
* Energy buildout will stabilize (we will eventually have enough energy supply to meet AI demand)
* Chips market will stabilize (chip supply will catch up to AI demand, lowering the hardware costs)
1. The GitHub Copilot pricing change that started a week ago already change buying decisions.
2. Small name open weight providers selling at what I assume, and hear through grape vine, is a profitable place.
Claude is over priced for what you get, and if headline is true, expensive to run. I do wonder if their API pricing is profitable. That's the word on the street about Big AI, they are making money on the PayGo