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kenhwang | on: OpenAI and Anthropic cut their LLM prices by up to 80% within a few months. Why?
They're not competing against each other, they're competing against free/local/open weight models that they're also lobbying very hard to regulate/ban.
rienbdj | parent | next
Of course they compete with each other. Codex and Claude Code have direct feature overlap.

But they do have a common enemy in open weight models.

asa123 | parent
As much as I hear this sentiment, and as much as all the smart software people around me echo the desire for this sentiment to be true; it feels like people say these things, but then at the same time say - well, Claude/Chatgpt is still marginally better for me now. But clearly they are catching up so maybe one day!!!

In that sense, I'm really not sure if Kimi/chinese models are really competing against Anthropic/OAI? Not to mention that for individuals, the subscription model is extremely different, and Kimi subs are (I think) worse value, and chinese API's maybe marginally end up cheaper than using american subscriptions.

qlte | root | parent | next
The profit comes from the enterprise customers who have to pay for usage at API rates. Not the subsidized subscriptions, which both OpenAI have designed to be unavailable for large enterprises by withholding IAM and auditing features they need except on the usage based entperise plans.

As an individual I'm still paying for a ChatGPT Plus plan since $20/mo gives me a lot of value and I use many multiples of $20 at API rates per month. But in terms of capabilities, I am entirely satisfied when using my Opencode Go plan with open models like Deepseek Flash/Pro, Kimi and MiMo.

At this point keeping my ChatGPT subscription isn't because of a significant capability gap compared to open models. It's 90% about the value of the subscription priced well below API rates (10% the fun of trying latest models).

If OpenAI/Anthropic dropped their cheap subscriptions or drastically undermined the value proposition I'd be happy using open models exclusively and currently barely notice a difference switching back and forth for the vast majority of tasks.

I'm expecting the subs to increasingly provide less value as the US labs IPO and follow the SV pattern of moving from marketshare capture mode to profit extraction mode. Thankfully I'm already comfortable using OpenCode with open models and avoid lock-in to any specific harness so would be a very soft landing.

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hobofan | root | parent | next
> well, Claude/Chatgpt is still marginally better for me now

Enterprise doesn't care about marginally better. They care about cost.

Most organizations that run our self-hostable chat platform with cloud models are for most stretches running 6 months-1 year old models, and are strongly eyeing (or have already switched) to more commodity models for most of their workforce. Frontier models are mainly relevant for engineering tasks.

SkiFire13 | root | parent | next
For enterprise customers the value proposition of self-hosting one of the open models is enormous. We're talking 10x cheaper (remember that enterprises pay API rates), plus more control on where the data goes (especially given that some frontier models do not support ZDR). And all those savings are lost revenue for the US AI Labs.
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smodo | root | parent | next
Openrouter stats seem to indicate that there is a lot of demand for ‘good enough at a good price.’ After all, not everyone is decompiling PS5 games. In fact, most people are just speedrunning notetaking apps in JavaScript frameworks.
mbreese | root | parent | next
But, Openrouter stats can only measure the usage they see. I'm not sure it is really all that representative of total LLM usage across the market.

I think that's the difference here -- OpenAI and Anthropic are competing more with each other (and Google Gemini) than they are with open weight models. While people on HN are familiar with Kimi and GLM models, I'm not sure how many casual users of LLMs know about them. I think the competitive risk open weight models pose to OpenAI and Anthropic is much further in the future.

There is a lot of usage that's only known by Anthropic or OpenAI that's not visible to the rest of the world.

peddling-brink | root | parent
> most people are just speedrunning notetaking apps in JavaScript frameworks.

I feel seen. But seriously, my app, with my preferences, written by a semi-trustworthy entity that isn’t trying to shove ads down my throat. That’s really great.

NewJazz | root | parent | next
Have you considered you are reading comments from different people?