However, inference costs for entirely good enough models are likely to keep declining in the future. We're probably hitting diminishing returns on model size and training. The new generations aren't quantum leaps anymore, and newer generations of open source models like DeepSeek are likely to start getting good enough.
There's going to be a limit to how much they can raise prices, because someone can always build out a datacenter and fill it up with open source DeepSeek inference and undercut your prices by 10x while still making a very good ROI--and that's a business model right there. Right now I'm sure there's a lot of people who will protest that they couldn't do their jobs with lesser models, but as time goes on that will get less and less. Already right now the consumers who are using AI for writing presentations, cooking recipe generation and ELI5 answers for common things, aren't going to be missing much from a lesser model. That'll actually only start to get cheaper over time.
Also for business needs, as AI inference costs escalate there comes a point where businesses rediscover human intelligence again, and start hiring/training people to do more work to use lesser models--if that is more productive in the end than shelling out large amounts of cash for inference on the latest models. [Although given how much companies waste on AWS, there's a lot of tolerance for overspending in corporations...]
> because someone can always build out a datacenter and fill it up with open source DeepSeek inference and undercut your prices by 10x while still making a very good ROI-
Not sure how it all works out. Currently trillion dollar companies can't make a native app for platforms. Everything is just JS/Electron because economics does not work for them.
And here companies can make GW data center running very expensive GPUs for 1/10th of current prices. Sound little fanciful to me.
The price you pay for anthropic must include the price of training new and better models which is incredibly costly. If you use the models someone else already spend money to develop you don’t need to pay this price.
I guess the new models will still be quantum leaps, but literally: "The smallest possible change in a system"
They've been like that for a while actually, I think at least since the big hype around ChatGPT 4.5 (or was it 5?) and that underwhelming, lukewarm, oversanitised presentation by Altman and his team.
Yups... Mythos is the smallest possible leap. Not a standard model generation advance, not even a version point advance. Just the smallest possible quanta of a change. We are absolutely hitting a plateau any day now. Any day. Any time. Any second now. Yup. Right now! Surely!
I mean let's be realistic - all that we know about the "mythical" Mythos is the carefully curated and release stuff by the Anthropic's PR team. Is it really a huge leap they are making it to be? I doubt it. In fact I bet if it was indeed that powerful and dangerous, as they imply, they'd find a way to release it immediately, devastate OpenAI and DeepSeek and secure a leading position in the market. Why is it not happening? I suspect because Dario is again at it, peddling his bullshit.
Yeah. AI progress is insanely fast if you compare it to anything else. Where else is a one year old technology already hopelessly outdated? 10 years ago is basically stone age.
I am continually tripped out by the fact when I was 16, I didn't have a 'smartphone' beyond a Windows Mobile 6 phone that had no internet on it.
Now, I have this high-resolution shiny object that can near instantaneously get any information I want along with _streaming HD video to it_ *anywhere*.
15 years even feels like a stone age. I can't fathom what it has to feel like people in their 60s and 70s.
I'm not quite 60, but it's always interesting to me that I feel quite the opposite of this. When I was 16, I didn't have a computer, didn't have a phone, had never used the Internet, but when I think of how life has changed, it's frankly not much. I woke up this morning, scooped my cats' litter boxes, took out some trash, made myself breakfast, ate that, read some news while eating, then lifted weights in my garage, had some work meetings, wrote up some instructions per a customer request from Friday, and am about to go drive to the lake to go do a 9 mile longboard loop.
That's very close to a normal day in 1996. The biggest difference is I read the news on my phone instead of a physical newspaper. The news was not any more interesting or informative because of that. I guess I can also still do the loop reasonably well, but I'm a lot slower than I was in 1996 when I was a cross-country state champion.
My parents are closing in on 70 and I guess I can't speak for them, but I'm at least aware of the daily routines of their lives, too. Walk the dog, do housework, DIY building projects, visit kids and grankids. Seems much the same, too, with the biggest difference being they're now teaching my sister's sons to play baseball rather than me, but shit, one of her sons even looks like exactly the same way I looked when I was 7! The more things change, the more they stay the same.
General agree... I still do the things (mid-50's) I used to do when I was a teenager with no computer, no phone.
But - now they are easier - I can read books on an e-ink screen and pretty much instantly find what I want to read next. I get my news on a phone. I used to watch TV/movies broadcast or on tape rentals. Now, I have just about everything I could ever want available - without ADs... those were such a time-waster.
What has changed is that I have access to MORE information than my local (or school) libraries could ever provide - in a variety of more accessible formats. Whatever tools I need to get "work done", I can find a myriad of free and open-source options.
But - the overall days and household family routines are the same - now, instead of reading a paper book while waiting to pickup my kids (or other family members) "back-in-the-day", I can read my device, or connect with my DIY communities online on my phone - or learn something new. I don't have to schedule life around major broadcast events, I can easily do many tasks while I am "out-and-about".
Friction has been reduced.
If your parents are closing in on 70, I would have expected you to be closer to not quite 50 than not quite 60.
I am just over 50 myself and I agree with your points. Technology has changed but life is largely very similar to wear it was in the 90s. At least day to day. Attitudes are way worse now.
Thank you for this insight!
I always wonder the views of older people. My parents are very technology forward and have been my entire life so it is difficult to gauge how different life is compared to when they were growing up.
It's easy to hear "Oh well I only had 640kb of memory and typed programs out of a magazine I got in the mail!" and see as distinct from having 'unlimited' resources and the internet.
Your insight is good ("The biggest difference is I read the news on my phone instead of a physical newspaper") that life sort of stays the same but the modality changes. People still go to the store like they did in the mid-1800s but now it is by car.
I wonder what our "industrial revolution" will be where the previous generation lived (ie: out in the country on a farm) totally different lives to the current (ie: in the city in a factory). Maybe when space travel and multi-planetary living is normalized?
> It's easy to hear "Oh well I only had 640kb of memory and typed programs out of a magazine I got in the mail!"
Since I was there (young, but there), I want to point out that this crosses three eras which all felt quite different:
Exact years vary but these eras were only about 5 years each. Nobody had a floppy in 1978 but almost computer user did by 1983; nobody had a hard drive in 1983 but almost everyone did by 1988.To some degree this already happened with the move from the industrial city to suburbanization and then re-urbanization. In particular one of the most notable recent developments is that urban waterways are now pretty desirable places to be with parks and recreation; in most industrializing cities the waterfront was actively avoided because the industrial use made it polluted, smelly etc.
Depends on where you live. My dad is almost 80, grew up in a very rural area, and when he was 16 they'd just gotten indoor plumbing. Up until he was 14, his school was a one-room school house with no heating other than a wood stove. If you were the first kid to arrive for the day, it was your job to get the fire going in winter months.
Housework meant no laundry machine, no dishwasher, and possibly no vacuum cleaner. That means hand washing everything, and beating rugs with sticks and brushes to get the dust off of them.
The early lives of my grandparents (in their 90s) are so fascinatingly different to that of mine. But even by the time my parents were growing up in the 60s, life was not so different in the west. The real differentiators in living standards - energy, household appliances and cooking, modes of transport - were more or less figured out then. By the time my parents were young adults in the early 80s, so many of the aspects of "modern life" had been figured out.
I look at the life my kids live, and it's not so different to my childhood. The toys are similar, their housing is similar. Probably the biggest difference is the availability of content on demand rather than much more fixed TV schedules.
The big difference in the last 30 years hasn't so much been in the kind of middle class life you can live, but the number of people who live that kind of life. In the 90s 40% of people globally were living in extreme poverty. Now its under 10%. The kinds of lives the middle class live in China and Vietnam are closer to those of Europeans today, when even 30 years ago most people in those countries were living much closer to the way your dad grew up.
I wonder if AI will result in a step change of living standards? Perhaps along with robotics we'll finally get to do nothing at all at home? I'm not convinced it'll be quick though. Maybe another 30 years.
The news on the phone is worse, in fact.
I think so too.
And at some point even frontier model costs will hopefully come down (if there is still a meaningful difference between closed and open source models at that point) as all of the compute that's being built out right now comes online.
I hope it's true, but right now hardware prices are insane