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rmunn | on: Claude Fable is relentlessly proactive
At some point the subscription model is going to become unsustainable for the frontier companies to continue (we just saw that happen with GitHub Copilot), and they will move everyone to a pay-per-token model. And then everyone will suddenly discover that they can get so much more value out of locally-hosted models, and they'll be willing to pay the $50,000 (or whatever) upfront on hardware to host it. (Not most individuals, obviously. But most companies can probably afford to spend that much on hardware if they think they'll benefit long-term). That's going to put a serious crimp in the frontier companies' ability to continue as they have been.

I don't know when that will happen, but I don't think it'll be more than a decade. Maybe 3-5 years. (Though you shouldn't take my word for it, I was predicting the dotcom bubble bursting in 1998 and it lasted at least two years longer than I would have predicted).

EDIT to clarify: I don't mean "in 1998, I was predicting the dotcom bubble would collapse and I was right". I mean "I was predicting that 1998 would be the year the dotcom bubble would collapse, and I was off by at least two years".

simonw | parent | next
GitHub Copilot's challenge is that they weren't selling access to their own models, they were selling access to models from OpenAI and Anthropic which they presumably had to pay list price for (or maybe a slightly reduced rate that they negotiated).

They also had a pricing plan which they had designed pre-coding-agent, when it was rare for a single prompt to burn $10+ of tokens in an agent loop.

OpenAI and Anthropic are at least selling their own models directly, so they can discount a whole lot more since there's no-one else getting compensated in the middle.

ValentineC | parent
> At some point the subscription model is going to become unsustainable for the frontier companies to continue (we just saw that happen with GitHub Copilot), and they will move everyone to a pay-per-token model.

From what I understand, Enterprise (above 150 seats, I think?) already has to pay per-token pricing.

Subscriptions are the premium "free tier" marketing of the AI world, so that employees can collectively request their large enterprise to subscribe to Claude, Codex, or Cursor, and presumably be billed at per-token prices then.