I feel like devs generally spend someone else's money on tokens. Either their employers or OpenAIs when they use a codex subscription.
If I put on my schizo hat. Something they might be doing is increasing the losses on their monthly codex subscriptions, to show that the API has a higher margin than before (the codex account massively in the negative, but the API account now having huge margins).
I've never seen an OpenAI investor pitch deck. But my guess is that API margins is one of the big ones they try to sell people on since Sama talks about it on Twitter.
I would be interested in hearing the insider stuff. Like if this model is genuinely like twice as expensive to serve or something.
You can't build a business on per-seat subscriptions when you advertise making workers obsolete. API pricing with sustainable margins are the only way forward if you genuinely think you're going to cause (or accelerate) reduction in clients' headcount.
Additionally, the value generated by the best models with high-thinking and lots of context window is way higher than the cheap and tiny models, so you need to provide a "gateway drug" that lets people experience the best you offer.
> You can't build a business on per-seat subscriptions when you advertise making workers obsolete.
On the other hand I would argue that most workers' salaries are more like subscriptions than API type pricing (which would be more like an hourly contractor)
Yeah and the increase in operating expenses is going to make managers start asking hard questions - this is good. It means eventually there will be budgets put in place - this will force OAI and Anthropic to innovate harder. Then we will see how things pan out. Ultimately a firm is not going to pay rent to these firms if the benefits dont exceed the costs.
Meaning that you believe they're not trying their "hardest" to innovate? They must be slacking then.
Budgets are already happening
> Ultimately a firm is not going to pay rent to these firms if the benefits dont exceed the costs.
This is also true for the humans. They will need to provide more benefits than the coding agents cost.
Humans are needed to use agents and these agents are not showing to be fully autonomous and require constant human review. In fact all you are getting is a splurge of stuff, people not thinking deeper anymore and the creation of more bottle necks and exacerbating the ones that already exist in an org.
You sound like elon with the fsd will be here next year. Many cars have the self driving feature - most drivers don’t use it. Oh why is that I wonder.
The difference between sub and api price makes it hard to create competitive solutions on the app level.
This was something I worried about after openai started building apps as well as models. Now all of the labs make no secret of the fact that they are going after the whole software industry. Its going to be hard to maintain functioning fair markets unless governments step in.