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quicklywilliamtoday at 12:16 AM2 repliesview on HN

Interesting read. I don't know if I quite buy the evidence, but it's definitely enough to warrant further investigation. It also matches up with my personal experience, which is that tools like Claude Code are burning through more and more tokens as we push them to do bigger and bigger work. But we all know the frontier model companies are burning through money in an unsustainable race to get you and your company hooked on their tools.

So: I buy that the cost of frontier performance is going up exponentially, but that doesn't mean there is a fundamental link. We also know that benchmark performance of much smaller/cheaper models has been increasing (as far as I know METR only looks at frontier models), so that makes me wonder if the exponential cost/time horizon relationship is only for the frontier models.


Replies

esperenttoday at 3:05 AM

> But we all know the frontier model companies are burning through money in an unsustainable race to get you and your company hooked on their tools.

Do we? Because elsewhere in the thread there's people claiming they are profitable in API billing and might be at least close to break even on subscription, given that many people don't use all of their allowance.

ai-xtoday at 5:15 AM

Anthropic has 50% gross margins on their tokens.

Step 1) Bubble callers will be proven wrong in 2026 if not already (no excess capacity)

Step 2) Models are not profitable are proven wrong (When Anthropic files their S1)

Step 3) FOMO and actual bubble (say around 2028/29)

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