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xvxvx 7h ago

‘The sudden cost spike exposes the fragility of building businesses on subsidized API access. If your margins depend on cheap tokens, you are entirely at the mercy of the labs.’

I’m just here for the fallout. The businesses who jettisoned their talent in favor of cheap AI garbage. The ones who have seen obvious degradation in work quality and stability, but who have tried to ignore or hide it. They now have to face down CFO’s and executive management who see zero returns on the current spend and are being asked to approve extreme budget increases.

A 230% increase isn’t even a big jump. Try 1000%. That may not even be enough to cover the costs and turn a profit for AI companies.

InsideOutSanta 6h ago

They're just phasing out an old model. Pricing on current models hasn't changed.

sz4kerto 6h ago

> The ones who have seen obvious degradation in work quality and stability, but who have tried to ignore or hide it. They now have to face down CFO’s and executive management who see zero returns on the current spend and are being asked to approve extreme budget increases.

Hm, there must be businesses like this, but I presume there are many who experience huge returns on current spend - and even 5x costs would be fine, but currently AI prices (given fixed 'intelligence') are dropping like a stone. I can't imagine that the same level of intelligence is going to be more expensive in 12 months.

It's just normal that there's a huge variation of how businesses and individuals adapt to new circumstances, this has been the case forever.

jubilee33 6h ago

For some firms not having to deal with employees is less do with cost and more to do with control and a freedom from all the extra overhead that dealing with humans and their complex "needs" brings. Health care, working conditions, the scourge of a human resources department, complaints and liabilities of every sort imaginable. I personally would pay double or triple the wage of a human worker to not have all that worry, especially in high regulatory juristictions. If the output is faster and even half as good as well, there is no question at all.

Most humans demand too much and bring little to the table. Real talent is very rare and it mostly wants to work for itself if it can.

weikju 3h ago

It’s ok, we won’t need to pay for your services too if AI is that good and just get the output directly from AI.

I just hope by then that AI consumers are as good at shopping as we are or the economy will suffer…

jubilee33 2h ago

relevant... :D

https://youtube.com/shorts/TNZ0oFKFAsk

gigatree 5h ago

What would you say real talent looks like? Is it just about hard work, or something else?

jubilee33 2h ago

I think "real" talent requires a love or at least enjoyment of the task, then add some natural ability or persistence to get unusually proficient. Most people have a job to make money. That's the unfortunate reality of needing to eat, many even forego their natural talent to be more economically mobile.

Working very hard is good ethic, but machines will work harder no matter what.

flohofwoe 6h ago

The only problem is that now you can be banned for being cruel to your AI slaves too, the outrage! /s

999900000999 6h ago

The issue is our entire economy is being held up by AI hype.

If there's a grand realization that AI isn't magic, let's just say I'm not optimistic.

torben-friis 5h ago

If there's a grand realization that it IS magic, it doesn't look so good either. Replaced knowledge workers will not be consuming much either.

throwa356262 6h ago

Big deal, they are bringing 0731 prices to the same level as 1017. Given their compute constraints (thanks to US sanctions) it makes sense to not support too many legacy models anyway.

https://www.alibabacloud.com/help/en/model-studio/model-pric...

roenxi 6h ago

Over 12 months I'd expect [0] the $/task of completing a benchmarked task to drop to x0.01 of its original price. If providers increase their prices by 230%, that implies I would expect x0.033 the initial benchmark.

I don't know if this even counts as newsworthy, prices are too volatile. Speaking of, wasn't this model released a few months ago? It must be getting close to being obsolete by now.

[0] https://artificialanalysis.ai/trends#efficiency

sureMan6 6h ago

It's an outdated model that they're increasing the price of so you switch to the newer one essentially, this whole post is clickbait since it doesn't mention that

eur0pa 6h ago

I'd like to see the prompt that generated this piece

edit: these are not the prices I see at https://api-docs.deepseek.com/quick_start/pricing/

denzil 5h ago

DeepSeek is different company than Alibaba. I'm not sure why prices of one of the secondary (for DeepSeek models) API providers is newsworthy, but I guess people might not realize it is a different company.

impure 5h ago

V4 Flash 0731? Not even 4.1? And anyways, DeepSeek is an open model, plenty of services provide access to it. Also looking at pricing on OpenRouter it looks like Alibaba is actually one of the more expensive providers.

blakeman8192 6h ago

The article failed (deliberately?) to mention that 0731 vision exp is two releases old. It's not nearly as efficient or as capable as the newer 4.1 Flash and 4.1 Flash 1017 models.

This move is most likely the DeepSeek team just making efforts to phase it out.

solatic 6h ago

Yep, 1017 is available at the normal $0.15/$0.06 pricing: https://www.alibabacloud.com/help/en/model-studio/model-pric...

This is no different from AWS charging higher prices for hosting Kubernetes/MySQL/etc. versions that are end-of-life. Keep your stuff maintained and upgrade, to free up the resources.

ipsum2 6h ago

AI blogspam.

drcongo 4h ago

Does "loss leader" mean something different here?

miohtama 6h ago

In other news, China is about to ban open weights model exports

https://www.straitstimes.com/business/china-plans-ai-export-...

yorwba 4h ago

From your link:

"Open-source technology and research already in the public domain would not be covered, and the government will provide streamlined procedures, such as automatic licensing, to exports involving open-source AI technologies."

China is making companies tell them ahead of time before they release large, capable models. It's not a ban yet.

Dban1 6h ago

So reliant on AI

bargainbin 6h ago

I mean, even with a hike of 230% this is going to be lower than Luna/Haiku right?

import 6h ago

Afaik Luna is a bit cheaper.

Alibaba hikes DeepSeek V4 Flash 0731 output prices by 230% (stork.ai)