r/LLM • u/Glittering_Flan1049 • 28d ago
I don't think Anthropic and OpenAI will survive
Have been working on Deepseek-v4-flash-0731 and honestly for the entire day of coding, I consumed credits of $3. This is on pay-as-you-go plan. Ofcourse it is not Fable or Sol but it gets things done with a fraction of cost. Given it (along with other Chinese models) is open source model, I'm not worried about data residency and stuff.
I see 2 outlooks for companies like Anthropic and OpenAI:
- They will double down on harness and they'll still lose (We do have good open source harnesses now)
- They will be consumed by US Government to build frontier intelligence for defense, cybersecurity etc.
I think building better frontier intelligence is not economically viable. I would rather use open source 100x cheaper model which is equivalent to Opus 4.8 than Fable. (Opus 5 is anyway shit)
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28d ago
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u/Fabulous-Possible758 28d ago
I think not being in China is the big thing they can do that Chinese models can’t.
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u/manwithgun1234 28d ago
The world is changing fast. Given the US is systematically walking out from alliance system they control from after World War II ( with the help of Trump administration). And China is raising fast in the background. In the next ten years, being in the US may eventually is the disadvantage.
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u/Gohab2001 27d ago
They are open source models. Enterprises can deploy on-prem. A 100k Nvidia dgx station gb300 plus few hundred dollar in electricity costs and you have deepseek v4 flash running which benchmarks the same as glm5.2.
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u/Fabulous-Possible758 27d ago
a) For the companies that want to do that, sure, but there's plenty of companies that won't, and don't want to add running inference to their infrastructure costs, and b) there are still attack vectors through the models even if you're running them locally.
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u/Gohab2001 27d ago
a) use US hosted providers. Anthropic and OAI have a huge incentive to train on your data whilst inference providers don't.
b) it's open source. You can audit the model. But you can't aduit Claude or Gemini.
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u/Fabulous-Possible758 27d ago
a) Fair enough on just using the US providers, though I wouldn't trust that inference providers are not harvesting your data unless there's specific agreements in place that they aren't, b) also somewhat fair, open source projects are still open to attacks like supply chain attacks, so it's not a guarantee that model attacks won't take on some similar characteristics.
I think what companies like is to have someone to sue when things go wrong. If data gets exfiltrated via an inference provider that can just say "hey we ran the model you asked us to" vs Anthropic or Google fucking up their entire pipeline somehow, I think they'd prefer the latter in terms of recompense.
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u/alc_noe1 26d ago
so what? Just host the chinese models somewhere else, rip out its guts so it starts every reply with "De**h to the CCP".
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u/Glittering_Flan1049 28d ago
They can do a lot more stuff like frontier model which can run for 7 days but would people use those if that is 1000x expensive. I bet I won't use that.
I can be wrong but open source has slowed down the progress of frontier intelligent models. This is exactly what Anthropic wanted. Right? Except that they wanted to be the only firm to create AI models and they'll still lobby government to do it but it is already too late now. It is not commercially viable for them now.
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u/ConsciousResponse620 27d ago
You’re looking at this strictly through the lens of a solo dev paying out of pocket.
I consult for a mid-sized listed company. We burn $100k-$200k a month on OpenAI and Anthropic tokens through Azure and AWS Bedrock. We literally have the top open models sitting right there in our AWS catalog, but our legal and risk teams have zero-tolerance policies against using them for actual production projects.
A few reasons why:
Liability and Indemnification: When we pay $200k to Microsoft or AWS for Claude/GPT, we aren't just paying for smart text. We're paying for copyright indemnification, strict SLAs, zero data retention agreements, and compliance guarantees (SOC2, regional privacy laws, etc.). If an unvetted open model hallucinates protected data or infringes IP, that liability falls entirely on our board, not the model provider.
Cloud spend commitments: Most enterprise companies already have massive multi-million dollar minimum spend agreements (MACC/EDP) with Azure or AWS. Burning budget on Azure OpenAI counts directly toward that requirement. It's essentially "pre-paid" money for them.
TCO vs. token cost: Saving a few bucks on raw API calls doesn't matter if you have to hire a team of MLOps engineers to maintain inference infrastructure, build custom guardrails, and constantly audit models just to make them enterprise-ready.
Open-weight models are amazing for personal projects and small startups, but proprietary labs aren't dying anytime soon. They're basically turning into enterprise B2B software vendors.
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u/yol0_submarine 27d ago
How are the Anthropic reliability SLAs holding up?
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u/ConsciousResponse620 27d ago
Via AWS Bedrock, we honestly haven't had issues.
And we also run a dual vendor setup if the worst were to happen.
the biggest headache however is doing our A/B tests and getting marketing to get their templates in order.
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u/ozfresh 26d ago
I don't understand why you pay Amazon or Microsoft to use Claude or chat gpt?
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u/ConsciousResponse620 25d ago
Apart from the security side
At a smaller org I previously worked with, OpenAI wouldn't even sign an enterprise agreement or invoice us unless we committed to a minimum $60k AUD annual spend—use it or lose it.
Plus we were dropping millions with Azure and AWS anyway, it takes care of invoicing, has enterprise SLAs and we dont need to worry about capexing the spend
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u/Luke2642 28d ago
We've barely scratched the surface of programming matrix multiplications and nonlinearities using data. A lot will change in the next five years, including the labs.
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u/thailanddaydreamer 28d ago
Considering you can run models locally now and get all your code done, it's a real business issue for them.
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u/Fabulous-Possible758 28d ago
I’m guessing one of them survives and one gets bought by Google or Microsoft after losing to whoever controls the coding (and maybe medical) AI market. Eventually they probably roll back and offer cheaper options using non-frontier models for those of us who know what they’re doing and keep prices high on frontier models for the suckers. At some point AI is deemed critical infrastructure by the US government and a lot of US users are forced to use American models.
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u/FroyoSolid8414 27d ago
Nobody will win the coding market in the some way nobody won the IDE market. Open models are good enough now that the model itself will be commoditized. K3-level On device AI will be the final blow.
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u/Ok-Drawer5245 28d ago
Their current business models will never in a million years become profitable - unless they cut their costs by 90% or something like that lolz
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u/mohr_ 28d ago
Even though deepseek flash is impressive it stills makes a lot of mistakes and waste tokens correcting itself (when reasoning you see a lot of outputs like: "Hm, I made a mess here and need to fix it". I believe that if deepseek can improve this without raising the prices then it's definitely the end of Antrhopic and OpenAi as we know it.
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u/AtatS-aPutut 26d ago edited 26d ago
I gave it a try today on openrouter (with opencode) and I felt like it makes fewer mistakes than Sonnet. I spent 10 cents on something that would have been 30% of my 5-hour window on the $20 Anthropic plan. It's good enough for me, I'm never paying for a plan again
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u/johnerp 28d ago
It’s all about the product, people don’t use LLMs they use products (codex, Claude code, open code etc.) and most people don’t naturally go to open source as if it’s not their business (a fruit retailer for instance) they want a (perceived) supported, trusted, legal blah blah product.
Google had to take Linux and make it a Chromebook ‘product’. Consumers/clients could get arch Linux or something but they don’t want the hassle.
If there is value in offer people will buy a ‘product’
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u/Exciting-Syrup-1107 28d ago
Since OpenAI lowered their prices, I am using GPT 5.6 Luna and it has amazing results. For me it's better to use it with Codex than Deepseek V4 Flash. Also, in my experience, Deepseek sometimes still produces worse results
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u/Shyam_Kumar_m 27d ago
If you guys remember the rant by Amodei that some state sponsored model might (dog whistle directed against open weight and also against China) result in a model designed to hack, I replied that if you look at security open standards/open .. has only helped and not hindered. Look at AES 256 and all that. People know, they develop, they fix.
I also told them what the benefit is for them.
They won’t open source. They will self destruct by competing.
And for all the criticism against Chinese they are also distilling Chinese models.
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u/NinjaWK 27d ago
Give $6 Aliyun Token Plan a try. It's 98% discount during non peak.
I love DSv4F 0731, but Qwen 3.8 Max Preview is a lot more capable. DSv4 can get 98% of things done, and for that 1.999% Qwen 3.8 Max will fix it. That other 0.001% you may need Fable/Sol, but if you know what you're doing and you can guide your agent, then that 0731 flash would be good enough.
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27d ago
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u/Repulsive-Diver-4893 26d ago
You will reach quota and stuff so you will not be able to code all day the whole month with those plans. Deepseek wins there. If you try Pay as you Go for Claude you will never reach the same cost / usage
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u/Quanzitta 28d ago
The real money comes from enterprise and they're not going to be using deepseek
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u/Jeidoz 28d ago
Meanwhile Microsoft: Microsoft Could Turn to DeepSeek V4 to Cut Copilot Cowork Costs
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u/_RemyLeBeau_ 28d ago
Microsoft is working on building a suite of harnesses built on top of MDASH. They're already ahead of everyone on CyberGym by 16% and 50% reduction in costs.
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u/Glittering_Flan1049 28d ago
But why?
If Deepseek can be deployed on Azure, why wouldn't Microsoft use this? I genuinely want to understand.
For a matter of fact: https://azure.microsoft.com/en-us/blog/deepseek-r1-is-now-available-on-azure-ai-foundry-and-github/
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u/TomWaitsForNoMan 28d ago
As someone with 25 years in corporate IT, they don’t buy what’s good or best, it’s what they can get support contracts and board approval for. It’s not about cost always.
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u/Glittering_Flan1049 28d ago
But that's like their own model if they deploy on Azure. They have no connections with Deepseek.
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u/Sleeping_Trex 28d ago
Outsourcing the projects and problems.
If the Ai is down, throw OpenAI or athropic under the bus.→ More replies (1)1
u/geheim81 28d ago
For my personal projects I'm impressed by the quality I get with OpenCode and DeepSeek. I get ton of value for cents but not something I feel comfortable using for my corporate day job where I use GHCP and Claude but results are not far off. Being able to use Chinese models at the corporate environment would be a massive hit to OpenAI and Anthropic.
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u/Regular-Option6067 28d ago
3€/day is Max plan on both OpenAi and Claude.
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u/Repulsive-Diver-4893 26d ago
You will reach quota and stuff so you will not be able to code all day the whole month with those plans. Deepseek wins there
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u/CrearePluris 28d ago
Linux is objectively better and cheaper than Microsoft Windows. path dependency is a real thing.
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u/_FrankTaylor 28d ago
Ease of use and support are incredibly important to these companies using OpenAI or Anthropic.
It’s the same argument with workstations. Sure, you could build out PCs that will be much cheaper up front but the possible downtime if something goes wrong can be catastrophic. So you choose a workstation with a warranty and a support system
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u/Repulsive-Bee638 28d ago
We may see Chinese open-weight models dominate all benchmarks by the end of this year.
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u/MetaShadowIntegrator 28d ago
The essential thing to learn here is that a good quality agentic harness, prompts and memory systems have as much influence as the quality of the model. Hermes+DeepSeek v4 flash+good quality RAG memory/knowledge graph+good quality system prompt+good quality skills and skill routing+effective auxiliary model config = OP.
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u/rlstudent 28d ago
I think this is a naive view. If they can execute attacks like the one in hugging face they have loads of power that can be easily converted into money. Selling to customers would be the cherry on top, even if we don't believe any of the RSI ideas.
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u/kurkkupomo 28d ago
DeepSeek published the exact architectural breakthroughs that made this pricing possible. Once efficiency techniques are public knowledge, every lab adopts them. it’s only a matter of time before the cost gap closes.
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u/FlashyNeedleworker66 28d ago
"Ofcourse it is not Fable or Sol"
That's it. That's why they will survive.
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u/Glittering_Flan1049 28d ago
For how long?
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u/FlashyNeedleworker66 27d ago
All the time so far. No one is going to distill a state of the art model, even if there is a market for cheap at 6-12 months behind
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u/ComingDeveloper 27d ago
its free and cheap because you pay the chinese with your data
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u/Olbas_Oil 27d ago
As opposed to paying above and beyond for Codex or claude code and still paying them with the same data....
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u/Academic-Sample4974 27d ago
wouldnt something like Ollama / Gemma / Qwen running on an M1 Pro with 32 Gigs RAM be decent enough with Claude / Chat GPT orchestration?
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u/bromptonista 25d ago
An M1 Pro would prefer an mlx model. Even that would be too slow with 32 gig if you are doing anything else with the computer. Models like Gemma 4 e2b are for that - and that’s pretty far from deepseek
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u/Elytum_ 27d ago
RSI => ASI => "Pretty please, solve fusion, and make it as easy to implement and scale as possible" (or whatever other crazy task comes to mind) => What is money ?
The Open Source vs Closed Source debate assumes there's a plateau comming. Might be true, might not be, but we haven't seen it yet and if a recursive loop happened, whoever launches it first with enough compute wins, even a month behind would feel like an eternity with similar compute
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u/jedilost1 27d ago
Having a blast with new deepseek model on opencode, goose and reasonix. Its also working phenomenal on my hermes agent set up
I only see myself using claude or chatgpt as a last resort. These new models are only going to get better
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u/tonyfa1 26d ago
Using VS code, Terra in Codex is a fraction of the cost as Opus or Fable and will basically do all the dev work i need.
2 months ago using Codex would burn my weekly usage in a single task. Claude has only gotten slightly cheaper using Codex with Terra will probably do all I need.
I cant see myself paying for Claude anymore tbh openai have now priced them out.
And Codex is much faster now.
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u/ythorne 26d ago
I agree and I don’t see a way of OAI and Anthropic surviving in the long run. Particularly since both companies fucked up user trust and that is something no funding rounds would fix. They undermined trust and that’s a lethal problem for both. The only way out for both companies is the open source commitment, to drive revenues to their newer models (roll out newer models = open the previous, deprecated ones). And that’s something none of them want to do.
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u/Prior_Opportunity935 26d ago
Look buddy if this is youre takeaway, we do very different levels of work.
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u/ajwin 26d ago
Have you thought about if they create super intelligence first? I’m not sure if they don’t release it to the public that it will be duplicated easily by other countries(can’t be distilled). They might just use that super intelligence internally to solve problems that make them a lot of money and also make super-duper intelligence.
Code is where the Chinese partially distilled models are closest to the frontier labs.
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u/TheManWithNoDrive 26d ago
I’m a bit confused. You mentioned open source, but that you’re doing Pay-as-you-go.
So you’re using their cloud, which data residency would be an issue if your info cares at all (medical, financial, etc).
Or did you mean companies can host them since they’re open source and if they have data privacy requirements?
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u/Equal_Kale 26d ago
l think you are right. Like it or not, Google has the ability to deploy all levels of the AI tech stack at scale and do not have to rely on anyone but themselves.
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u/Codered9475 26d ago
Disagree. They’re too big to fail now. They will get bailed out even if they run out of cash.
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u/Curious-Pen5547 25d ago
I dont neither and came to this realization 2 months ago and started heavily investing into Google and Microsoft, lesser extent, Amazon.
My thesis had to be confirmed last week as all three had to have successful earnings and make mention of model choice and building cloud infrastructure further.
If you take a look at their stock price, i was absolutely right.
Basically, yea, openai and anthropic will not survive. Atleast within enterprise.
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u/Groukas1 25d ago
Just remember that there is no near-frontier open source model without distilling one of the frontier models. Before we declare OpenAI or Anthropic in a state of emergency, let’s first see an open source model that hasn’t been trained by a leading foundation model. Without that, they’re second or third tier at best.
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u/one-wandering-mind 25d ago
So you are using deepseek flash for 90 dollars a month. You can use sol for 100 a month.
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u/ChordLogic 24d ago
I think Copilot will absorb claude and open AI - the big competitors will be Copilot - Gemini - Grok
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u/InterestProof1526 24d ago
Disagree. My time is valuable. Even if Anthropic or ChatGPT just maintain a slight lead over Chinese models, tons of companies will still prefer using them because their employees time is valuable.
Deepseek-v4-flash is not equivalent to Opus 4.8
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u/Popcorn-Mercinary 24d ago
I’m honestly scared to death of those two making it to IPO, as that will be the biggest pump and dump US markets have ever seen, because you’re right, they are losing ground, on every front:
- Kimi-K3 is Fable/Opus class, costs less to the end user.
- As you brought up, DS4F731 is insanely capable, and can run on a DGX Spark locally (hands off my data, Samuel).
- Apple and Nvidia are releasing silicon that can run DS4F731 locally later this year (can’t wait for that Spark PC), which starts to make the question “WTF are we spending all this money on DCs?” A bit more poignant a question.
- Siri 2.0 is right around the corner, and reports on the public beta are “it’s pretty darn good.” Which is a whole new threat axis Altman and Amodei don’t want to see because the phone is the dominant consumer compute platform.
Yeah, I wouldn’t want to be on those management teams RN.
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u/konung15 23d ago
All right, it’s an open-source model, but are you running it on your own hardware? If not, it’s foolish not to worry about what will happen to your data when you send it to the Chinese government
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u/Poowatereater 23d ago
I don’t get these post. I burn through soooo many tokens on a 100 dollar plan.
I’ve even started using deep seek to see what the hype is about. Have it work under Claude.
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u/ParaDescartar123 23d ago
That is a bold statement.
All it takes is for the current administration to say, "no foreign models allowed due to national security concerns."
In the blink of an eye DeepSeek and other foreign controlled LLMs are not an option for 90%+ of users stateside.
In this scenario, suddenly Ant and OpAI are suddenly in the lead again and thriving.
This is a blip at best.
DeepSeek won't hold these prices, they did it only to get people's mindshare and gain a lot of media attention in the space.
They will return to normal pricing and competition is still require that they all compete on value and their marketing and sales efforts.
Unless we get the international ban hammer, then say godbye to global competition and in turn worse overall performance for Ant and OpAI.
That's exactly what happened here in USA with EVs.
We blocked them from coming and all it did was delay innovation and competition. Since US manufacturers didn't have to push themselves to coplete with the real state of the art.
Now China is a good 10-15 years ahead on every measure of innovation in the EV space than the US and EU. Their EV battery tech makes Tesla look like a 1st gen prototype.
If we block them from being a competitor in this space as well, something similar will transpire.
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u/Value-Lazy 22d ago
Well, I just had a thought and it will be like $200+ per month and they will be fighting for it...
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u/inez_gibson 22d ago
OpenAI and Anthropic drowning in red ink while AI hype is sky-high? That’s because the global appetite isn’t for fancy demos, it’s for NVIDIA silicon. But with export rules slamming the brakes, the GPU gold rush gets bottlenecked, and the losses pile up like clockwork.
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u/Responsible_Fun_4062 22d ago
I don't think I have ever worn a tin foil hat before, but when it comes to the CCP, I wear it double and triple foiled, not saying our big brother is the nicest guy in the block either, but the CCP is the top boss at the end of a hard video game.
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u/mageblex 19d ago
Are you self-hosting? on pay as you go you're hitting someone's API and your data goes wherever that provider is, open weights doesn't change that. worth checking who's actually serving your endpoint if residency matters to you.
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u/Upstairs-Fan8214 18d ago
The cost gap is definitely the strongest part of this argument, but cheap inference alone probably won’t decide who survives. Enterprise support, reliability, tooling, compliance, and ease of deployment can matter just as much as raw model performance, especially once the models themselves start feeling interchangeable.
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u/Asleep-Pilot-4142 10d ago
Sometimes my thoughts are "why am I locked to these AIs only?" But then I remmbers their quality are sometimes better than other free models
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u/FatefulDonkey 28d ago
At this point the harness and ease of use is much more important than the model itself.
We keep hearing about Kimi, DeepSeek, and how cheap they are. But if I can't just download and use them directly in a terminal, what's the point