> People call $DeepSeek the “death threshold”: if your model is only marginally better than $DeepSeek, you won’t survive. $DeepSeek is insanely cheap.
goes hard
A few thoughts on the (open vs closed) model landscape:
Models need to be either (truly) great or (very) cheap. Everything in between will get competed away.
We will see consolidation in both camps: the “great” and the “cheap”. People call $DeepSeek the “death threshold”: if your model is only marginally better than $DeepSeek, you won’t survive. $DeepSeek is insanely cheap.
Model routing becomes a must. routing between “great” and “cheap”, with tasks assigned to the right model to maximize performance per $.
The key debate is whether cheap models cross the “good enough” line. The bear case for frontier models is that once cheap models are good enough, most users will be satisfied. I disagree. I think demand for frontier intelligence will never be fully satisfied.
The GLM / China model fear is worth tracking, but not overstating yet. @zai_org GLM is very chip constrained. It is mainly available through @togethercompute @FireworksAI_HQ , etc., not broadly across public clouds. I would track two things: 1) availability, and 2) the quality gap versus $OpenAI and $Anthropic. That will determine the real impact over time.
Token pricing can be VERY misleading (more in the below tweet). If two models are similar and the price gap is 50%, that gap can easily be erased by infra, cached %, and token efficiency. Comparing “input/output price per million tokens” alone is often deceptive.
Cheap models and the supply chain around them are underrated. (aka the China AI)
On-prem vs. cloud really shouldn’t have this much debate... "If it takes $20k of hardware to run GLM 5.2 and you only break even after 5.5 years of 24/7 utilization, cloud still wins. Cloud compute remains more token-efficient per total cost dollar than local compute."
“Tokenmaxxing” and “Jevons paradox” (if I could collect a $ every time ppl mention these terms...). 1) As with any frontier tech, moving from early adopters to mainstream adoption often takes a reset. 2) Cheap models will expand the market.
++ full: https://open.substack.com/pub/robonomics/p/open-source-models?r=3hcp4&utm_campaign=post-expanded-share&utm_medium=web
