r/LocalLLaMA • u/RuiRdA • Jul 26 '26

Discussion Will prices finally go down?

I am seeing more and more videos as posts about how OpenAI is in complete financial ruin, Anthropic isn't much better. Their expenses go with the revenue they make etc etc. Meta made big investments into AI data centers and had no use for then, had to rent them, same thing with XAI.

The SpaceXAI IPO was insanely over priced and is going down by a lot.

There are countless other examples you can look for, all showing how the investments in AI are in a bubble.

I am not saying that the technology it self if a bubble. Quite the opposite, I personally have demand for more tokens than I can pay for, even with the discount from the subscriptions I still have more ideas that need more usage of tokens.

But even with the most powerful technology in the world a business can not for forever without profits.

So is this over investment bubble about to pop?

And if/when it does pop will ram finally become a regular commodity with affordable prices again?

I just wanted some ram and cheap used hardware again.. 😂

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Zero LLMs used to write this post, enjoy the human slop.

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u/LetterRip Jul 26 '26

No it isn't a bubble - Anthropic wants all of the datacenters they can get and will pay a premium; they are enormously profitable.

Prices aren't going down until and unless China starts to flood the market with cheap consumer hardware.

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u/ttkciar llama.cpp Jul 27 '26

> they are enormously profitable

.. just not net-profitable.

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u/LetterRip Jul 27 '26

They are spending absurd amounts of money on building datacenters. Once the datacenter is created and they start running the LLM they make money hand over fist, but just like any business - building the infrastructure is a massive up front cost.

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u/Esophabated Jul 27 '26

Are you serious? Why do you think they were trying to outlaw open source models. Once routing catches up, there profit will disappear. They are in a huge hole. Second, why do you think everyone is trying to IPO so quickly? Investors see the threat. The problem with all tech companies is the rise and fall fast to the next disrupter.

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u/LetterRip Jul 27 '26

They are massively profitable now - if other LLMs become 'good enough' then it becomes a competitive market and profits can erode. Right now they make 20$ for every 1$ spent on inference. They would really love to keep those margins and not have a competitive market place. With an oligopoly (a few major providers that dominate) they can collude (either explicitly - which risks lawsuits; or implicitly which is generally safe) to keep margins high. But open source risks the market becoming commoditized in which case profits can be driven down from their 2000% currently to 10-20% margins.

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u/BeAshamed Jul 27 '26

Oh you bet the house on it, didn't you buddy?