I wish that was inversely proportional. The less I pay, somehow it costs them more money.
this post was submitted on 07 Jun 2026
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Yes, that's called a "marketing budget"
So are we assuming here that LLMs won't become more efficient over time? GPT-3 has been a frontier model just a few years ago and it's performance blew everyone's mind at that time. I can now run equivalent LLM on my personal computer. Why can't we expect that after a few years Claude Sonnet level of capability won't be possible to accomplish locally?
They could, but what’s the plan here, exactly? That all these for profit companies who are currently publishing models for free, like Qwen, will continue to do so in the future?
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So are we assuming here that LLMs won't become more efficient over time?
Mostly. Moore's law ran up against the physical limits of the materials we make chips out of - so desktops of today just do what the desktops of yesterday do, mostly.
We should keep seeing improvements in highly specialized models. There's interesting outcomes to have here, with the right setup and ollama.
- but -
The really promising impressive models today are just running with long contexts on shithloads of hardware - which is neither coming to home PCs any time soon nor going to actually be profitable to run any time soon.
There's an argument to be made that running the really interesting model on a ton of hardware might make money for really specific uses - but then when we talk about specific uses that are worth lots of money, those use cases tend to tolerate difficult interfaces and reward accuracy. LLMs invariably reduce accuracy in exchange for ease of use. There might be a sweet spot for a huge expensive hallucination prone LLM in some of these uses, but I doubt it (the entire approach) competes, long term.
There's a few specific use cases where inaccuracy is desirable - largely forms of shifting accountability and some kinds of gambling. Things that either are or should be crimes have a higher tolerance for AI hallucination.
But - a small cheap local model has all the desirable attributes for doing these things (crimes) poorly as a big expensive model. So there's probably not even much money to be made there.
I expect that this tech is not going away, but it's also not earning back the current investment.
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looks inside
But if you use the $100 a month Claude Max plan, and you would use it to the weekly limit by going full ‘agentic coding’ (so almost no human in the loop) you would use an amount of tokens that would cost you more than $1000 at API-pricing.
If I watch 600 movies every day on my netflix subscription I am using more energy than I pay them for. Obviously everyone is like me. Therefore they are losing money overall.
Wait, their (netflix) earnings say they made a profit last quarter. But my calculations were waterproof!
Probably anthropic are not net positive, but they are not spending 10x what people pay them for tokens.
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I’m not going to read this whole article, is that opex??