Enterprise is how Claude/OAI make their money. Enterprise companies absolutely optimize around costs for infra, it's like an entire job category.

> Also the actual LLM is a tiny portion of the value added. Anyone that tried to build agentic solutions from LLM apis quickly realizes that a huge value is the Claude Code / Codex harness. There are open source implementations like OpenCode but they're not nearly as good.

Claude and OAI are not valued at $1T because of their harnesses

> Think about it another way. Consider how much money Microsoft spends on maintaining Excel. There are open source alternatives that have >90% of the functionality, they'll even work w/ Excel files and generate them. Google sheets is probably 99% and available to everyone and better in a lot of regards. But the immense value spreadsheet software produces workers above the $100 or whatever a year makes it so that there is a real moat and no one bothers exploring alternatives.

Enterprise excel is like $50 a month, the closed source labs charge orders of magnitude more than that per user per month for enterprise, and want to charge more if they can to maintain their valuation. I spent $20 in an afternoon yesterday using my work plan for one workflow for reference, I probably spend at least $50 a day and I don't even do that much coding anymore.

AFAIK the frontier labs make their money on enterprise, and they recently changed their terms so that most businesses can't use the $200/m plan anymore.

This is why companies like Uber - and mine :( - announced per employee AI budgets on the order of ~$1000/month.

When you're forced to pay API costs, the value prop of Kimi/Qwen becomes a lot more compelling.

This is a very rich / developed country privilege perspective.

Where I live, it's not unusual for a monthly wage to be around $200. Of course developer wages are much higher, maybe as much as $1000 a month, but $200 is still a huge chunk of that so it doesn't really matter how much "value" you get out of it if you're no longer able to pay rent or buy decent food.

Even in developed countries, $200 a month is out of reach for all kinds of people who would benefit from it (students without rich families, entrepreneurs, etc.).

Like Codex https://github.com/openai/codex

That margin is getting smaller and smaller. I would have been with you a week ago; paying for Fable was worth it compared to all other models. But with K3, the difference has shrunk to the point where, for me, it's not worth the cost anymore.

In other words, it may be worth paying five times as much to get 10% better real-world outcomes for a lot of people, but a lot fewer people will pay five times as much to get 2% better outcomes.

> a huge value is the Claude Code / Codex harness

For me, it's the opposite. Having to use Claude Code instead of the harness I prefer is a point against Anthropic, not for it.

On our side we use Claude/GPT/Kimi (it replaced Antigravity) for development. But we build our systems around a cheaper denominator (Deepseek previously, recently we added GPT 5.6 which have good prices as well). We offer BYOK for Claude but its def not an option to build something on top of it (for us).

Excel has network effects. If N people are using excel, the incremental N+1'th user is forced to use it or risk not being able to open documents from the N users. Excel is also sticky, in the sense that a user used to Excel UI is hesitant to switch to a new UI. Tokens dont have network effects. If N people use fable, the N+1'th user could use any other model, and have no impact.

Why should I pay for a frontier model that I can’t use?

But once you have an AI-powered application in production, why wouldn't you go with far cheaper and capable enough models? That's just optimising a business process like any other. You'd use cheaper providers whether Chinese, or other on-prem models.

> Think about it another way. Consider how much money Microsoft spends on maintaining Excel. There are open source alternatives that have >90% of the functionality, they'll even work w/ Excel files and generate them.

Sure but were these open source alternative as pervasive and widespread and talked about when Microsoft was bundling Excel with the OS? Or were there millions of dollars, if not billions of dollars being spent by these competitors? The answer is No. It is not the same scenario.

While I understand the logic of harnesses - those are not full proof. It is trivial to setup K3 or Qwen to work with Claude Code/Codex by intercepting requests and routing to K3/Qwen. You have tools like CCSwitch which can do that for you.

The only thing remains is - people willing to pay a lot for slightly better model. That is true but price sensitivity is also a thing. The mania case for Anthropic/OpenAI/SpaceX/Google is that they will capture large part of the enterprise market. But in many cases outside coding AI capabilities will be resold.

That is instead of buying AI for lets say HR functions you pay for embedded AI in your HR software. And the HR software company will have incentives to raise their own margins. If their provide similar looking experience using Qwen/K3 why will they buy Anthropic/OpenAI. That is the real risk here. While as an individual you can continue to pay top dollar.