[raincole]

> an API that is likely a loss-leader to grab market share (hosted LLM cloud models)

Everyone just repeats this but I never buy it.

There is literally a service that allows you to switch models and service providers seamlessly (openrouter). There is just no lock-in. It doesn't make any financial sense to "grab market share".

If you sell something with UI, like ChatGPT (the web interface) or Cursor, sure. But selling API at a loss is peak stupidity and even VCs can see that.

[zdp7]

You can't switch to a competitor that went out of business. If you low ball your rates, it starves startups of needed funds

[raxxorraxor]

Depends on the business case. LLM slowly creep into several workflows and here determinism becomes more important than the latest abilities in reasoning.

People start to let their LLM parse text content. Be that mails, chats or transcriptions, the models often need to formalize their output and switching models can become burdensome, while developers might switch models on a whim.

Doesn't mean you can capture a market by selling cheap though.

[mupuff1234]

Except they most likely do have a plan to make it harder to switch.

[DarmokJalad1701]

Who is "they"? It makes no sense for Openrouter to allow providers that do not conform to the API. They profit from the commission from the fees and not providing inference.

[raincole]

Yeah, sure, please elaborate on how providers such as Fireworks, DeepInfra, Chutes are going to "make it harder to switch."

[mupuff1234]

I'm talking about openAI, anthropic, Google, etc.

They'll offer consumer and enterprise integrations that will only work with their models.

[hedayet]

yes. And they will try both carrots and sticks.

The carrots are already visible - think abstractions like "projects" in ChatGPT.

[julianeon]

This is also the argument of the guy in the article, fyi (it's not a loss leader, no reason for it to be).