Lets go one step further.

The economics of airlines are such that they generally earn a return on capital less than cost of capital.

I think this is exactly where we are heading and OAI-Anthropic are the concordes.

Not OP, but it is a known fact that the cumulative profits of the airlines industry (in US) over it's history has been basically 0. We can say that essentially airlines are in business to support other businesses. I believe this is what OP might've been referring to.

To me the question is, can the frontier labs make the variance of output lower + make the output of higher quality to justify their prices?

If not lower priced chinese offerings will be better as its cheaper per token - giving you more attempts to offset the variance.

My feeling on the former is no... I believe they tried really hard but they've settled on pure marketing now to attempt to fight off the chinese with perceived superiority in quality.

Technological obsolesence is a bitch eh.

No this is not what matters.

The customers of these tokens need to see returns on their projects that exceed the cost of financing.

Laying people off only goes so far.

If enough said firms don’t see enough value given the price of frontiers they will cancel and consume open source. This is the risk the frontier labs are exposed to.

If they’ve entered into contractual agreements then actually it is debt.

Do you know what economic trade offs are?

Both implicit and explicit..?

Correct the cost is part of the economics.

Thats why most here shouldn’t engage in the discussion - they parrot on about benefits without identifying and articulating the costs and moreover how it affects the firms financial position.

Correct. That’s exactly right.

The move to buy up ram is straight out of a industrial organisation textbook.

It was the root concession that scale will not solve AGI

Swear people like you were hyping the frontier labs so hard not long ago.

Funny to see the change of tone - a lesson for people not to get too ahead of themselves.

There's no change in tone, I'm still very bullish on the tech, Claude in particular just isn't worth the API price, which I've always felt was too damn high. I have paid for Gemini 2.5 Pro, Deepseek 3.2/4 and GLM 5 tokens happily though.

Lmao you won’t admit it will you?

You financially benefit from stuff like agents. Of course you will be the last to admit publicly when things aren’t quite heading in the right direction. The gap between hype and reality is ever increasing.

You misread my comment because of your personal bias, and now you're acting like it's some sort of own? Come on bro.

The models are putting in work, that's indisputable, the thing I'm calling out is that Anthropic's price and hype are running ahead of the value it's delivering. Agents are a great boost at <=5% of SWE salary, a mediocre tradeoff/risk at 20%+, and insane at SV tokenmaxxing levels.