← All IntelClip / OtherCloud commoditization parallel (AWS/GCP price wars)
From Open Source Is Dead. Long Live Open Source. — Saoud Rizwan, Cline · ≈13:21
“when dollars are involved, the markets are extremely efficient and the absurd API costs that these closed labs charge just won't be worth it anymore for most knowledge work.”
“from 2015 onwards once raw compute and storage were a commodity the hyperscalers stopped competing on on it as much and started competing on other things like databases and serverless.”
What’s in it
- Draws a direct parallel between today's AI inference pricing war and cloud's 2014 price-cutting race
- Argues open-weight models will commoditize inference the way AWS and Google commoditized cloud compute
- Uses hyperscaler price-cut history to predict the end of high-margin closed-model APIs
Clip transcript
less than it does today. we're seeing uh the same sort of cost cutting tricks that commoditized the cloud 10 years ago um happening in inference. Uh so in 2014 uh Google uh at their GCP live March announcement said that they would cut compute by 32% and storage by 68%. Um and AWS fired back with similar cuts within within days and this was AWS's 42nd uh price cut at that point. And so from 2015 onwards once raw compute and storage were a commodity the hyperscalers stopped competing on on it as much and started competing on other things like databases and serverless. And I think because open weights allows these host providers to compete and cost uh optimize so aggressively, we'll see mass adoption of these foreign open weights models um because when dollars are involved, the markets are extremely efficient and the absurd API costs that these closed labs charge just won't be worth it anymore for most knowledge work.
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