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by bwfan123 57 days ago
> AI models are the new virtual machines

Deepseek v4 flash is priced at 1/10 that of openai/anthropic. I can see a race to the bottom - or perhaps an android vs iphone split - where, the premium market is served by openai/anthropic and there is a long-tail of commodity vendors.
2 comments
zurfer 57 days ago
It's priced at 1/10, but deepseek is probably not profitable, also it's slow.

Even more interesting is the question if we would have a deepseek model without the US frontier models.

And then what's the value of the advantage that the frontier models have. It's definitely 100x more valuable to find zero days 3months earlier. Probably not in every domain but in enough domains having the smartest model is valuable.

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simianwords 57 days ago
False. Deepseek and other providers who host deepseek have no incentive to subsidise. They also price it similarly. So it is the true value.
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ForHackernews 57 days ago
iPhone is a consumer brand, and to some extent a fashion/status signalling choice. The market pressures in the B2B space are quite different, I expect lots of cheap good-enough models (Deepseek and others) will end up powering customer service chatbots and the like.

Who will pay 500x the price for a 1% better model? Quants and traders?

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bwfan123 57 days ago
Much of the agentic intelligence is at the client. The llm backend is largely swappable. For instance, claude-code paired with any model performs well enough for many usecases. In fact, the real breakthrough is how an agent paired with an unreliable llm could perform well. Given this dynamic, I see llm tokens as the electrons or electricity, and agents as the toasters, and appliances using those electrons. If you extend this analogy, value will bubble up into the appliances which would each have consumer preferences. A token is a token no matter who produces it, just as an electron is, but I like my KitchenAid toaster, whats your preference ?
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ForHackernews 57 days ago
But Claude Code works about as well as Codex and roughly the same as Github Copilot. So what part of this pipeline is supposed to command premium pricing?

You might prefer your KitchenAid toaster but I'd wager you won't pay enough to support a trillion dollar valuation.

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