Some report burning through their whole monthly "AI credit" allotment in a single day.
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AI costs how much? GitHub Copilot users react to new usage-based pricing system
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God forbid people realize the cost of the thing they've been using. This was, of course, inevitable.
All that VC / hyperscaler money that had been getting burnt on customer acquisition and experimenting was going to demand ROI at some point.. and that point is now.
2026: The year the AI bill came due.
It turns out you can't run a massive cash burn hopes-and-dreams machine forever without consequences. It's no small coincidence that that OpenAI / Anthropic are rushing to IPO before the costs catch up with everyone waking up to the real costs of the LLMs.
All that VC / hyperscaler money that had been getting burnt on customer acquisition and experimenting was going to demand ROI at some point.. and that point is now.
2026: The year the AI bill came due.
It turns out you can't run a massive cash burn hopes-and-dreams machine forever without consequences. It's no small coincidence that that OpenAI / Anthropic are rushing to IPO before the costs catch up with everyone waking up to the real costs of the LLMs.
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There is no such thing as Claude 5.3-Codex. They were most likely talking about GPT. But even then, it doesn't make much sense to use GPT 5.3-codex these days if you want to save money on tokens.
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After reading this article, I went looking for my Yahoo! button. Found it, but the battery died ages ago. There's a lesson in there somewhere.
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The million (billion? trillion???) dollar question is how much does it actually cost to run these models. I think companies like Anthropic and OpenAI earn a big profit on customers who pay per token. I'm looking forward to their IPOs so that I can see how their finances really look like.
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poke 532810
Ars Praetorian
And my employer is pushing for us to use AI to do more coding. I wonder if they’ll change their tune when the full bill comes due?
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Will this lead to a cascade that finally “corrects” the speculative bubble?
I have no sympathy for the billionaire techbro crowd, but I do worry for the many people whose 401k accounts are likely wrapped up in one way or another with the private debt market that has been leveraged into the Ai bubble. When the bubble pops (and it needs to), many people who aren’t billionaire techbro types will see pain.
For that reason alone, screw the billionaires. Add to that the direct damage to communities that did not ask for and do not want data centers, and double screw the billionaires.
I have no sympathy for the billionaire techbro crowd, but I do worry for the many people whose 401k accounts are likely wrapped up in one way or another with the private debt market that has been leveraged into the Ai bubble. When the bubble pops (and it needs to), many people who aren’t billionaire techbro types will see pain.
For that reason alone, screw the billionaires. Add to that the direct damage to communities that did not ask for and do not want data centers, and double screw the billionaires.
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A better personal business case is for you to be smart, not to ask the slopbot how to sound smart for you.
Huh.
Huh.
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I have a feeling they are still losing money, and even these new prices are just easing users into paying the real cost of AI.
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Prices are going to go up everywhere - and keep going up - so users that think "going somewhere else" is an option are in for a surprise.
Doesn't mean the technology is going away. But people aren't going to use these things as readily as they do now once the massive subsidies go away.
Doesn't mean the technology is going away. But people aren't going to use these things as readily as they do now once the massive subsidies go away.
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Good.. one of the more nefarious things about AI was that companies were hiding the true cost. If people had to actually pay what it costs, they might have a different viewpoint on AI use.
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chateauarusi
Ars Praetorian
One person can do the work of three people, for the cost of four! By Grabthar's Hammer, what a savings.
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Turns out almost any tool seems useful when its being given away for free. When things cost money people starting caring about if they're any good.
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No, totally backwards! The actual content of a text message is tens of kilobytes, and it ought to be ~free relative to voice-quality audio. It was always ridiculous to get charged by the text--I suspect the tower-to-phone handshake traffic was higher bandwidth.
This is more like, "It's one question to the slopbot, Michael. What could it cost, ten dollars?" and the answer might be yep.
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My gut feeling: It's still being subsidized, even at that cost :O I expect the following to happen to "GenAI" :
1. The complex AI tools will be used for niche purposes that do not generate a large enough profit for the large companies like Softbank to get a return on investment. Only Microsoft, Google, and AWS will be left standing, and OpenAI, et.al. will be absorbed by them.
2. For simple LLMs, I expect users to move to free local tools using frontends like Jan or GPT4All, using models like OpenAI OSS-20B.
3. I expect Sam Altman et. al. to eventually be brought up on felony fraud charges. I believe they made rich people, like Softbank, Microsoft, and Google, angry with their belief that we are "thissss close" to AGI, and they will be out for blood.
1. The complex AI tools will be used for niche purposes that do not generate a large enough profit for the large companies like Softbank to get a return on investment. Only Microsoft, Google, and AWS will be left standing, and OpenAI, et.al. will be absorbed by them.
2. For simple LLMs, I expect users to move to free local tools using frontends like Jan or GPT4All, using models like OpenAI OSS-20B.
3. I expect Sam Altman et. al. to eventually be brought up on felony fraud charges. I believe they made rich people, like Softbank, Microsoft, and Google, angry with their belief that we are "thissss close" to AGI, and they will be out for blood.
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Well yeah, the power requirements to work on even a small code base are quite high.
Do you think developers drink Mt. Dew and/or their weight in coffee for their health?
Do you think developers drink Mt. Dew and/or their weight in coffee for their health?
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The technology used for SMS/ text messaging is completely differently, and prices can be reduced. I can not see how pricing can be reduced for complex LLM usage. Can you explain how cost can be lowered using actual examples with sources?
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It varies, even to the cost per token, since different companies have different methods of energy generation and costs associated with just keeping the lights on, people employed and plans moving forward.
The actual amount is likely far higher than they've been charging, since not one AI company has achieved profitability after five years of this bullshit.
But this is where the rubber meets the road when people are being charged the ACTUAL COSTS for their use. To date, no one has been.
Now that at least ONE AI's "I need to make SOME profit" pricing has been publicly revealed, the future of AI and the actual costs of it can be more properly evaluated.
This ONE case isn't necessarily typical, but it is indicative that they've been grossly low-balling the costs per token to the customer in order to try to hook them on the drug and get that addiction/reliance going before telling everyone to pay up.
I'd GUESS that they priced higher than they had to just to get some revenue coming in, knowing that a portion of the users are going to Nope! out of using it from now on, or cutting way the fuck back. Cutting back wouldn't NECESSARILY be bad for the AI company, since presumably, the full costs of the token plus profit are included in each one (like it should have been from the beginning). So even a lower use amount will return a profit - assuming the income is greater than the overall operating costs per month.
It's very likely that a lot of these places may not be able to keep customers at a minimum price point, because they have to charge enough to stay solvent. And increasing the cost per token to cover costs, even without a profit, would likely result in more people abandoning the AI ship.
Casual users are going to vanish, so they'll never see a dime from them. The rest have to have a reason for it, and THOSE costs can't be higher than it was to just have the employees doing what they did before without AI, or they'll just hire new people and dump the AI, or cut back to the point the AI can't stay in business anyhow. They can reduce the cost of a token to the customer, but they can't make the customer pay more than the market will bear, either.
This is where the fun begins Reality is inserting itself into the narrative. It's going to be interesting to see what happens next.
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I was going to say the same thing. If I recall correctly, the sms system (at least originally) piggy backed on top of already existing technology, and it cost telecoms practically nothing to implement it. Charging to use it was a pure cash grab.
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The frontier models are interesting, but of late I've been paying close attention to the progress of the CHEAPER models. Thats way more interesting in my mind.
If you understand their limitations, and you know how to guide them, the cheaper models can do quite a lot at MUCH lower cost.
If a particular model is able to get the job done, I'm VERY happy when a new model comes out and the one I've been using gets cheaper.
If you understand their limitations, and you know how to guide them, the cheaper models can do quite a lot at MUCH lower cost.
If a particular model is able to get the job done, I'm VERY happy when a new model comes out and the one I've been using gets cheaper.
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Workers will be replaced by AI, businesses will adopt it and it will become essential for their processes, and then the price will increase dramatically until it’s almost/just as expensive as it used to be when meatbags did the work. Except now all that money is being siphoned into a handful of megacorporations instead of going to countless millions of workers in the form of salaries.
This was always the plan. Like Uber burning VC cash to subsidise rides until the taxi industry died, then jacking up the prices to reach profitability.
The billionaires and future-trillionares are no longer content with selling you products and services. They’re now literally coming for your entire salary.
This was always the plan. Like Uber burning VC cash to subsidise rides until the taxi industry died, then jacking up the prices to reach profitability.
The billionaires and future-trillionares are no longer content with selling you products and services. They’re now literally coming for your entire salary.
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SubWoofer2
Ars Tribunus Militum
ExxonMobil disagrees, as do China Coal, Royal Dutch Shell, Aramco, Chevron, Peabody, Santos...
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The difference between Uber and these "GenAI" companies is that, unless they can "lock in" the end user, the end user will just leave for another provider. Another problem is that LLMs do not scale from a cost perspective; the more complex the model, the more it cost to use. The last problem is that it's unknown how much money it costs for the service before the quarry is run, and unpredictability is the bane to a business.
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My fear is that this will result in a government bailout of AI companies.
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This has been coming for a while and Ed Zitron has been predicting this for over a year.
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We're starting to get usage billing where I work. Directors and VPs who were pushing "AI everything!" are suddenly asking their people why they're using AI for everything.
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It depends on who is in charge after November. If it's the Republicans, I can see a bailout happening. If it's the Democrats, no way. Silicone Valley put all their eggs in the Republican basket, and it's going to come back to bite them.
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