The business model should be that with economies of scale they could provide compute much cheaper than average consumer can buy to run locally. So yeah, that means they gotta be able to support these $20/mo plans indefinitely.
If they jack up the prices i can just buy a 128gb ryzen ai machine for the price of $200/mo claude for a year. I supposed there’s some room there --they could charge $50/mo and it still makes sense.
but even at $100/mo i can buy a machine to run it at home do a 24 month payment plan and come out ahead.
I’m not an expert but my understanding is most of the computation is in the training. The actual queries are not too difficult to manage. So I think that’s what makes it more difficult to monetize because you’re trying to position yourself as a digital gatekeeper for work that has already been done. Yes, some industries have survived in this position but it limits the amount of profit you can make because there are always ways to copy someone else’s homework. So if prices are too high people will opt out because they have other options even if they’re slightly less quality or convenience.
The business model should be that with economies of scale they could provide compute much cheaper than average consumer can buy to run locally. So yeah, that means they gotta be able to support these $20/mo plans indefinitely.
If they jack up the prices i can just buy a 128gb ryzen ai machine for the price of $200/mo claude for a year. I supposed there’s some room there --they could charge $50/mo and it still makes sense.
but even at $100/mo i can buy a machine to run it at home do a 24 month payment plan and come out ahead.
I’m not an expert but my understanding is most of the computation is in the training. The actual queries are not too difficult to manage. So I think that’s what makes it more difficult to monetize because you’re trying to position yourself as a digital gatekeeper for work that has already been done. Yes, some industries have survived in this position but it limits the amount of profit you can make because there are always ways to copy someone else’s homework. So if prices are too high people will opt out because they have other options even if they’re slightly less quality or convenience.