Absolutely. AI is an enterprise product - at least: for now. And Anthropic is in the pool position; eicker.news/@technews/117443237284007574

AI is an enterprise product

I think Google and Meta are well-positioned to provide AI services to regular people, since they both already have a large user base, existing cash flow from other non-AI products (meaning they can subsidize AI features for as long as they need to), and can probably outlast any startup. Google especially easily have enough paid users and advertisers to cover costs for free users.

Most of thr other AI companies will probably all end up focusing on / pivoting towards enterprise use cases though, for the higher prices and stability of long-term contracts.

Exactly. Enterprise is where AI can actually earn its keep: companies will pay serious money if it cuts costs or boosts revenue. Consumer chatbots are mostly a costly distribution strategy for now. The real customers have procurement budgets, not a $20 subscription and a dream.

Are Enterprise companies gonna wanna be fucked by hyperscalers the same way they are fucked by Microsoft?

I’d say no, they won’t. Without the vendor lock in, it will be cheaper and more secure to run open source models locally on your own hardware.

People are done outsourcing their essential workflows to non-competitive monopoly corporations.

The funniest outcome would be hyperscalers spending billions convincing enterprises they need AI, only for those enterprises to deploy open-weight models on their own hardware. After decades of vendor lock-in, »we can run this ourselves« might be the most expensive sentence Microsoft ever hears. However, the reality in many organisations is also that they opt for the supposedly safer choice of turning to a third party, rather than taking action themselves.

Yeah I have the $200/m sub for work and I’m using about $200/day volume of tokens at API rate. Obviously this isn’t a sustainable business model.

Am I prepared to pay full rate? Not yet, but if models keep improving at the rate they are then probably at some point. Opus 5.5 has been a huge increase in quality at a cheaper cost to deliver a task.

With next gen gpus and better models reducing the ‘cost per task’ I think they’ll get there.

It’s R&D, hardware

“Yeah, besides those integral parts of our costs, we’re profitable”

😅.

It’s like a hair dresser saying “If I don’t count the rent of my shop and all the supplies, I’m profitable”.

I’m surprised how easy it is to blow through hundreds of dollars in Claude tokens at work. They certainly aren’t subsidizing anything. If the Qwen 3.8 27B model I run on my gaming PC at home were priced like Claude, I’d probably have a $1000 a month bill.

Edit:

I bought a 7900 XTX a couple months ago for less than 2 months worth of Claude bills at work that runs 3.8 27B quite well at 200k context that is pretty on par with Sonnet 5.

Maybe Anthropic isn’t bleeding money as fast as they would otherwise be, but their premium pricing is pretty hard to justify. If Qwen 4 27B keeps pace with Sonnet 5.5, then we’ll basically have a Fable 5.1 class model that runs on a gaming PC.

I’m surprised how easy it is to blow through hundreds of dollars in Claude tokens at work. They certainly aren’t subsidizing anything.

That is the subsidized rate!

It costs far more for all the training and compute costs together than what you are currently paying.

Don’t know if it was you but someone pointed out a few months ago that the 7900 was the last 24GB card to be found for less than $1k and I grabbed one as an upgrade from a 3070. Running local models it’s less reliable than Claude at work, but not by much, and it was a good upgrade for gaming.

Before the return period was up it had gone from ~$900 to past $1.2k and I wasn’t eligible for a repair/replacement just a refund, the market is completely sideways.

I got one used for 600€ not long ago, sold my 6900XT for 450€, very happy

Nice, that’s quite a deal!

Yeah, it might’ve been me and glad to hear you got while the getting was still good.

Those enterprise customers are companies like this very one, who then have to heavily discount their rates or nobody wants it, (and as we see here, even then) so that’s not a solution for anthropic.

I don’t have data to back this up but I’d say thay the majority of their customers aren’t also selling AI services themselves. It’s customers that use AI for their business processes, software development, etc.

Nobody has extremely good data about this because it’s in their interest to make that as opaque as possible, but the reporting I’ve seen suggests that it is, if not the majority at least an extremely large fraction, and even where it’s used for in-house software development that is largely bankrolled by VC hoping to gain a competitive advantage with AI. It doesn’t really appear that the API pricing offers better cost/productivity than just hiring junior devs (lol).