So it largely sounds like many more people will be able to write software - and will use AI to do it. Existing software engineers will continue to automate their tasks away like they always did, but perhaps at a faster rate.

The impact of AI in other fields seems to be muted.

Ai has become indispensable but maybe not at all cost. My company just had a company-wide meeting to talk about how they're restricting who can use which models and instructing us the "be more responsible with company's tokens". And it's not an small company by any means.

I wonder how a focus on per-token API profits will impact the incentives to improve token efficiency and drive down costs through optimized compute. I suppose as long as a few leading labs are competing, we'll see progress in this regard, but it's certainly less in their interest than it is with a flat subscription pricing model.

With deepseek and xiaomi mimo models slashing their prices 99%, I don't see a great future for openai / antrhopic with regards to their 1T valuations. Maybe 1T valuation will be the whole market, West + East.

Great article I know this upsets a lot of people who are used to thinking Anthropic/OpenAI are just lighting cash on fire but they've cornered the market on enterprise who cannot walk away from these $200/month plans

However the valuations are still far far away from actual sanity

They've got, ballpark, $5t to $10t to make back in the next 5 years, or the hardware buildouts will start getting written down.

This means we're going to need $1t+ in spending, per year, on tokens. 200m knowledge workers in the world, 30m developers. We're talking about a world where you need 5% of every knowledge workers salary to go into tokens. 20% if you're a developer.

That's a _huge_ shift. Most people I know cite +20%-40% velocity with these tools, against the actual work their company cares about doing. +20% speed for +20% spend isn't going to motivate a trillion dollars is spending.

We're not there yet. This is still the upswing of the hype cycle, and unless we figure out how to make developers 2x, 5x, 10x as productive on stuff that matters, this isn't going to play out well.

So how do openai and anthropic plan to keep customers when GLM-5.1 is just as good and open source and a lot cheaper?

I don't see the business model working. My closest friend actually does automation software for large companies.

He does not use Claude or openai at all. He primarily uses gpt 120b on cerebras and glm-5.1 for heavy thinking work. And some other small models for various tasks. All open source.

And these systems are extremely useful for the businesses and are able to run fully automated pipelines that are very stable and fast.

We discuss this a lot, and we both think any business doing heavy agentic work on Claude and openai just aren't aware of exactly how good and cheap open source has gotten on the last year.

So... once the legacy businesses and developers catch up, won't Claude and openai be unable to recoup their costs?

If nothing else this blog did give me the idea that I should split my $200 claude max plan into two $100 CC max and $100 codex plan, esp because Claude is now offering 1.5x weekly limits so its the 5x usage is now more like 7.5x usage.