IMO AI companies are selling the infrastructure and easier access to the models, beyond competing to get the smarter model. We can run Qwen locally, but at what cost? A good enough GPU for running 27B is more than 4,000 USD where I live (Brazil). Even if I were to spend 100s of hours in credits I would never reach a point where the 4000 USD investment pays off. Unless I'm doing it for the sport, building my own LLM rig is not financially viable.

This is without saying that company clients of Anthropic or OpenAI will not have the upfront money to get a RTX 3090 for each and every employee. Much better to sign a deal with the LLM providers and get cheaper token price with a sales person.

The real target for Anthropic, OpenAI and tons of others are large enterprises and workflows. I think they will do all right if they execute well.

I don’t think so for two reasons:

1. They still have extreme revenue growth (and despite what HN says, good gross margins supposedly).

2. People will pay a premium for the best model. So far, we see catchup but no leapfrogging.

Trading blows in some benchmarks is a bit exaggerated. If you try the model, `xhigh` is basically feels like the `max` mode (i.e. massive thinker and extremely presistent), and the amount of world knowledge and intent understanding is nowhere close to an Opus class model even from 6mo ago.

It's still very useful, and it'll probably displace a good bit of API spend; but it's not really "trading blows with SOTA from just a half year ago". A bit overblown on the Anthropic/OpenAI has missed the window I reckon.

Also, on the open weight frontier side, Kimi K3 is pretty expensive, and Deepseek V4 Pro/Flash is getting a little less juicy with price increases.

This is why they've been making bank on the secondary market. They can retire now.

I mean, that was obvious from the word "go".

Even Zuckerberg isn't as deluded to think that there's money in constantly releasing closed models and hypserscaling their deployment, which is why we got muse-glimmer 30b last week. I have been playing with it on a 32gb MBP w/ M2 Pro. If prosumer-grade hardware from almost three years ago can now offer a novice a way to host a possibly serviceable software development agent, then there's little incentive to pay out for LLMs like Anthropic's or OpenAI's over the long run.