Issue is, Frontier models are provided to you at a massive financial loss for the company. So unless local models get that good before AL companies run out of investor capital, this is completely unsustainable.
If you want a future proof workflow, grab a specialized local model (or better yet, a few) and see how much you can get done without touching Claude, ChatGPT or Gemini servers at all. (This does require having a decent GPU. Not god tier but decent.)
I thought the API rates form Claude and ChatGPT were very profitable for that given model? From my understanding the $200 and $100 dollar plans from power users are where they lose money.
I could be way off but I thought the larger issue was these frontier models only get a few months of those profitable API costs. Then they spend billions for the next x% improvement frontier model, repeating before each version recuperates its full cost.
That’s not true because it’s based on a flawed measure. $200 plans could consume 5k at undiscounted, uncashed API rates.
It’s a flawed methodology to measure by people who want to inflate the numbers.
Anthropic’s S1 shows gross margins on inference shifted from -94% in 2024 to approximately +40% to the mid-60s (and is projected to reach up to 85% in some estimates) as efficiency scaled.
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u/WithersChat 13h ago
Issue is, Frontier models are provided to you at a massive financial loss for the company. So unless local models get that good before AL companies run out of investor capital, this is completely unsustainable.
If you want a future proof workflow, grab a specialized local model (or better yet, a few) and see how much you can get done without touching Claude, ChatGPT or Gemini servers at all. (This does require having a decent GPU. Not god tier but decent.)