Imagine still saying this after open weight models being released everywhere and the likes of DeepSeek keeping their prices at the lowest possible for more than good enough intelligence that even Microsoft is migrating to deploy DeepSeek's models.
DeepSeek is somewhere between Sonnet and Opus in capability, for much lower price.
Their $0.87 per million output tokens is one of the few API offerings that is probably subsidized (the break-even price is probably around $2 judging by[1])
I think Anthropic and OpenAI's margins will erode some over time. But I think they are very profitable now on the API prices they are charging, and their margins will remain healthy.
Put it like this: AWS is a very expensive way of getting compute, and there are numerous competitors that are much cheaper.And yet AWS is very profitable.
[1] https://openrouter.ai/deepseek/deepseek-v4-pro#providers
I use it as something that sits right below Sonnet for daily tasks that can be run in loops with validation checks, perfect. Anything more advanced...it just doesn't cut it.
Same experience with z-ai glm 5.1 btw... don't know what system prompt magic antrophic set in front of their Sonnet 4.6, but it does execute tasks efficiently.
claiming any of these deepseek models are close to opus is a bit optimistic
For software development, I notice no difference. For all the work I did using AI, DeepSeek is as capable as claude.
I tried DeepSeek and MiMo through both Claude Code and Pi.dev. I found Claude Code a slightly better harness, but I still have both installed and switch around frequently.
As for "open source AI", what exactly are you talking about? Is it open models?
I tried some through Ollama, but I don't have the hardware to run decent models.
Anyway I'm rambling, what Microsoft is doing with AI in enterprise is basically what they did with Teams and similar systems. They provide a platform for it which is good enough that your organisation is going to want it rather than deal with multiple vendors. Not for tech organisations, but for every other enterprise organisation it'll be so much easier to just go this way. I imagine that Anthropic is getting some sort of payment from Microsoft for Cowork, but what Cowork shows is that Microsoft can be completely model agnostic and still sell "top" AI. Especially because they've set cost on a fixed rate that I'm sure they'll increase by 25% every year.
Or do things like the fact that you need some sort of special Agent 365 license for your sysadmins to manage the admin.microsoft part of Copilot which has to do with security policies... Ask me if it was fun doing that agent by agent... It's frankly the most Microsoft thing I've ever seen.
The cost of hardware still needs to dramatically drop for open-weight models to be viable for local usage. Even with the release of things like Nvidia DGX Spark and Ryzen AI Halo, you'd likely want a few of them to run agents in parallel.
Sure, you can use cloud hosted variants of models like DeepSeek etc at API rates, but subscriptions still come out on top for bulk usage. GPT is already tightly integrated into peoples workflows, has wide adoption, has good tooling for developers, etc.
Plus there's nothing stopping them from competing on a price level if they really feel the need. It just means they might burn more cash in the short term.
It's more efficient to do the opposite on a constrained platform. Run agents in parallel using a single model, then round-robin among models for cross-checking purposes. (The makers of local inference engines are dropping the ball by not making batched inference a first-class citizen of that workflow. It's not just useful for vLLM and SGlang.)
But a lot of other people are going to happily shell out for Opus 4.8 at way higher prices.
The API GLM 5.2 launched last night with several providers on OpenRouter. I had a short conversation, didn't get to test much, but initial impressions "the vibes were good".