alt Hacker NewsI mean... I don't like it either but this is pretty standard stuff and it's obvious why they're doing it.
Claude, ChatGPT, Gemini, and Grok are all more or less on par with each other, or a couple months behind at most. Chinese open models are also not far behind.
There's nothing inherent to these products to make them "sticky". If your tooling is designed for it, you can trivially switch models at any time. Mid-conversation, even. And it just works.
When you have basically equivalent products with no switching cost, you have perfect competition. They are all commodities. And that means: none of them can make a profit. It's a basic law of economics.
If they can't make a profit, no matter how revolutionary the tech is, their valuation is not justified, and they will be in big trouble when people figure this out.
So they need to make the product sticky somehow. So they:
1. Add a subscription payment model. Once you are paying a subscription fee, then the calculus on switching changes: if you only maintain one subscription, you have a strong reason to stick with it for everything.
2. Force you to use their client app, which only talks to their model, so you can't even try other models without changing your whole workflow, which most people won't bother to do.
These are bog standard tactics across the tech industry and beyond for limiting competitive pressure.
Everyone is mad about #2 but honestly I'm more mad about #1. The best thing for consumers would be if all these model providers strictly provided usage-based API pricing, which makes switching easy. But right now the subscription prices offer an enormous discount over API pricing, which just shows how much they are really desperate to create some sort of stickiness. The subscriptions don't even provide the "peace of mind" benefit that Spotify-like subscription models provide, where you don't have to worry about usage, because they still have enforced usage limits that people regularly hit. It's just purely a discount offered for locking yourself in.
But again I can't really be that mad because of course they are doing this, not doing it would be terrible business strategy.
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I'm not "mad", I'm "sad" -- because I was very much on "Team Anthropic" a few months ago ... but the tool has failed to keep up in terms of quality.
If they're going to close the sub off to other tools, they need to make very strong improvements to the tool. And I don't really see that. It's "fine" but I actually think these tools are letting developers down.
They take over too much. They fail to give good insights into what's happening. They have poor stop/interrupt/correct dynamics. They don't properly incorporate a basic review cycle which is something we demand of junior developers and interns on our teams, but somehow not our AIs?
They're producing mountains of sometimes-good but often unreviewable code and it isn't the "AI"'s fault, it's the heuristics in the tools.
So I want to see innovation here. And I was hoping to see it from Anthropic. But I just saw the opposite.
> And that means: none of them can make a profit
Well, no. It just means no single player can dominate the field in terms of profits. Anthropic is probably still losing money on subscribers, so other companies "reselling" their offering does them no good. Forcing you to use their TUI at least gives them control of how you interact with the models back. I'm guessing but since they've gone full send into the developer tooling space, their pitch to investors likely highlights the # of users on CC, not their subscriber numbers (which again, lose money). The move makes since in that respect.