"Now we don't need to hire a founding engineer! Yippee!" I wonder all these people who are building companies that are built on prompts (not even a person) from other companies. The minute there is a rug pull (and there WILL be one), what are you going to do? You'll be in even worse shape because in this case there won't be someone who can help you figure out your next move, there won't be an old team, there will just be NO team. Is this the future?
Any cost/benefit analysis of whether to use AI has to factor in the fact that AI companies aren't even close to making a profit, and are primarily funded by investment money. At some point, either the cost to operate these AI models needs to go down, or the prices will go up. And from my perspective, the latter seems a lot more likely.
It get even darker - I was around in the 1990s and a lot of people who ran head on into that generation’s problems used those lessons to build huge startups in the 2000s. If we have outsourced a lot of learning, what do we do when we fail? Or how we compound on success?
My Claude Code usage would have been $24k last month if I didn't have a max plan, at least according to Claude-Monitor.
I've been using a tool I developed (https://github.com/stravu/crystal) to run several sessions in parallel. Sometimes I will run the same prompt multiple times and pick the winner, or sometimes I'll be working on multiple features at once, reviewing and testing one while waiting on the others.
Basically, with the right tooling you can burn tokens incredibly fast while still receiving a ton of value from them.
Looked at your tool several times, but haven't answered this question for myself: does this tool fundamentally use the Anthropic API (not the normal MAX billing)? Presuming you built around the SDK -- haven't figured out if it is possible to use the SDK, but use the normal account billing (instead of hitting the API).
Love the idea by the way! We do need new IDE features which are centered around switching between Git worktrees and managing multiple active agents per worktree.
Edit: oh, do you invoke normal CC within your tool to avoid this issue and then post-process?
Claude code has an SDK, where you specify the path to the CC executable. So I believe thats how this works. Once you have set up claude code in your environment and authed with however you like, this will just use that executable in a new UI
I'm on $100 and i'm shocked how much usage i get out of Sonnet, while Opus feels like no usage at all. I barely even bother with Opus since most things i want to do just runout super quick.
Early stage founder here. You have no idea how worth it $200/month is as a multiple on what compensation is required to fund good engineers. Absolutely the highest ROI thing I have done in the life of the company so far.
At this point, question is when does Amazon tell Anthropic to stop because it’s gotta be running up a huge bill. I don’t think they can continue offering the $200 plan for too long even with Amazon’s deep pocket.
Based on people around me and anecdotal evidence of when Claude struggles, a lot more than you think. I’ve done some analysis on personal use between Openrouter, Amp, Claude API and $200 subscription, I probably save around $40-50/day. And I am a “light” user. I don’t run things in parallel too much.
I don't know, I have to figure out another way to count money I guess, but that $200 gives me a lot of worth, far more than 200. I guess if you like sleeping and do other stuff than drive Claude Code all the time, you might have a different feeling. For us it works well.
My question wasn't if the $200 was worth it to the buyer. Renting an H100 for a month is gonna cost around $1000 ($1.33+/hr). Pretend the use isn't bursty (but really it is). If you could get 6 people on one, the company is making money selling inference.
Has anyone else done this and felt the same? Every now and then I try to reevaluate all the models. So far it still feels like Claude is in the lead just because it will predictably do what I want when given a mid-sized problem. Meanwhile o3 will sometimes one-shot a masterpiece, sometimes go down the complete wrong path.
This might also just be a feature of the change in problem size - perhaps the larger problems that necessitate o3 are also too open-ended and would require much more planning up front. But at that point it's actually more natural to just iterate with sonnet and stay in the driver's seat a bit. Plus sonnet runs 5x faster.
Is $200/month a lot of money when you can multiply your productivity? It depends but the most valuable currency in life is time. For some, spending thousands a month would be worth it.
As I said elsewhere... $200/month etc is potentially not a lot for an employer to pay (though I've worked for some recently who balk at just stocking a snacks tray or drink fridge...).
But $200/month is unbearable for open source / free software developers.
It's wild when a company has another department and will shell out $200/month per-head for some amalgamation of Salesforce and other SaaS tools for customer service agents.
At a previous job, my department was getting slashed because marketing was moving over to using Salesforce instead of custom software written in-house. Everything was going swimmingly, until the integration vendor for Salesforce just kept billing, and billing and billing.
Last I checked no one is still there who was there originally, except the vendor. And the vendor was charging around $90k/mo for integration services and custom development in 2017 when my team was let go. My team was around $10k/mo including rent for our cubicles.
That was another weird practice I've never seen elsewhere, to pay rent, we had to charge the other departments for our services. They turned IT and infrastructure into a business, and expected it to turn a profit, which pissed off all the departments who had to start paying for their projects, so they started outsourcing all development work to vendors, killing our income stream, which required multiple rounds of layoffs until only management was left.
I've seen it too - not uncommon. A frustrating angle is vendor lockin. You are required to only use the internal IT team for everything, even if they're far more expensive and less skilled. They can 'charge' whatever they want, and you're stuck with their skills, prices and timeline. Going outside of that requires many levels of signoffs/approvals, and untold amounts of time making your case. There's value in having some central purchasing process, but when you limit your vendors to one (internal or external) you'll creating a lot more problems that you don't need to have.
I suspect there's some accounting magic where salaries and software licenses are in one box and "Diet Coke in the fridge" is in another, and the latter is an unbearable cost but the former "OK"
But yeah, doesn't explain non-payment for AI tools.
Current job "permits" Claude usage, but does not pay for it.
That's your problem, or your company or your country.
Here in EU, if not stated in your work agreement, it's pretty common people work full time job and also as a self-employed contractor for other companies.
So when I'm finished with my work, HO of course, I just work on my "contractor" projects.
Honestly, I wouldn't sign a full time contract banning me from other work.
And if you have enough customers, you just drop full time job. And just pay social security and health insurance, which you must pay by law anyway.
And specially in my country, it's even more ridiculous that as self-employed you pay lower taxes than full time employees, which truth to be told are ridiculously high.
Nearly 40% of your salary.
If you're salaried, you are not a task-based worker. The company pays you a salary for your full day's worth of productive time. If you can suddenly get 5x more done in that time, negotiate a higher salary or leave. If you're actually more productive, they will fight to keep you.
Your salary is not determined by your productivity, it's determined by market rates. 5X productivity does not mean 5X salary. Employers prey on labor market inefficiencies to keep the market rates low.
Any employer with 2 brain cells will figure out that you are more productive as a developer by using AI tools, they will mandate all developers use it. Then that's the new bar and everyone's salary stays the same.
Yeah a 20$ plan is prob enough for the AI slop you need to fill in your 8h working time. Unless you have many projects that require more AI slop that is.
Communism is an ideal but never a reality. What you see in reality is at best an attempt at communism which is quickly derailed by corruption and greed. I mean, it's great to have ideals, but you should also recognize when those ideals are completely impractical given the human condition.
By the way, this also applies to the "Free market" ideal...
Importantly, problems with the ideal shouldn't preclude good actions that take us in a direction.
There being problems with absolute libertarian free markets doesn't mean all policies that evoke the free market ideal must be disregarded, nor does the problems with communism mean that all communist actions must be ignored.
We can see a problem with an ideal, but still wish to replicate the good parts.
Sure. The issue for me is when people intentionally mislabel something to make it look worse.
For example, mislabelling socialism as communism. The police department, fire department, and roads are all socialist programs. Only a moron would call this communism and yet for some reason universal healthcare...
There's also this nonsense when someone says "That's the free market at work", and I'm like, if we really lived in a free market then you'd be drinking DuPont's poison right now.
Using the words "Communism" and "Free market" just show a (often intentional) misunderstanding of the nuance of how things actually work in our society.
The communism label must be the most cited straw man in all of history at this point.
Productivity multiplies x2
You keep your job x0.5
Your salary x0.8 (because the guy we just fired will gladly do your job for less)
Your work hours x1.4 (because now we expect you to do the work of 2 people, but didn’t account for all the overhead that comes with it)
As a non-founder / not a VC you max get a few percentage points, and its mostly paper toilet money until there's an exit or IPO, and the founders will always try to squeeze you if they can, not because they're bad people, but because the system incentivises it. (you'll keep getting diluted in future rounds)
tbh, if im gonna bust my ass I'd rather own the thing.
Equity is a lottery ticket. Is sacrificing my happiness or life balance in the near term worth the gamble that A) my company will be successful, and B) that my equity won’t have been diluted to worthlessness by the time that happens? At higher levels of seniority/importamce/influence this might make sense, but for most people I seriously doubt it does, especially early in their careers.
Interesting. Though it seems they are themselves building Agentic AI tooling. It's vibe coding all the way down - when's something real going to pop out the bottom?
I really hope we can avoid metered stuff for the long-term. One of the best aspects of software development is the low capital barrier to entry, and the cost of the AI tools right now is threatening that.
I'm fortunate in that my own use of the AI tools I'm personally paying for is squished into my off-time on nights and weekends, so I get buy with a $20/month Claude subscription :).
I can see how pricing at 100 to 200$ per month per employee could make sense for companies, it’s a clear value proposition at that scale. But for personal projects and open source work, it feels out of reach. I’d really like to see more accessible pricing tiers for individuals and hobbyists. Pay per token models don’t work for me either; earlier this year, I racked up almost $1,000 in a month just experimenting with personal projects, and that experience has made me wary of using these tools since.
> Pay per token models don’t work for me either; earlier this year, I racked up almost $1,000 in a month just experimenting with personal projects, and that experience has made me wary of using these tools since.
Can't have your cake and eat it too.
Behold the holy trifecta of: Number of Projects - Code Quality - Coding Agent Cost
Charging $200/month is economically only possible if there is not a true market for LLMs or some sort of monopoly power. Currently there is no evidence that this will be the case. There are already multiple competitors and the barrier to entry is relatively low (compared to e.g. the car industry or other manufacturing industries), there are no network effects (like for social networks) and no need to get the product 100% right (like compatibility to Photoshop or Office) and the prices for training will drop further. Furthermore $200 is not free (like Google).
Can anyone name one single widely-used digital product that does _not_ have to be precisely correct/compatible/identical to The Original and that everyone _does_ pay $200/month for?
Therefore, should prices that users pay get anywhere even close to that number, there will naturally be opportunities for competitors to bring prices down to a reasonable level.
* It's not clear on how much revenue or new customers is generated by using a coding agent
* It's not clear on how things are going on production. There's only talks about development in the article
I feel ai coding agents will give you the edge. Just this article doesn't talk about revenue or PnL side of things, just perceived costs saved from not employing an engineer.
So what we do at NonBioS.ai is to use a cheaper model to do routine tasks, but switch to a higher thinking model seamlessly if the agent get stuck. Its most cost efficient, and we take that switching cost away from the engineer.
But broadly agree to the argument of the post - just spending more might still be worth it.
I get a lot of value out of Claude Max at $100 USD/month. I use it almost exclusively for my personal open source projects. For work, I'm more cautious.
I worry, with an article like this floating around, and with this as the competition, and with the economics of all this stuff generally... major price increases are on the horizon.
Businesses (some) can afford this, after all it's still just a portion of the costs of a SWE salary (tho $1000/m is getting up there). But open source developers cannot.
I worry about this trend, and when the other shoe will drop on Anthropic's products, at least.
I have not invested time on locally-run, I'm curious if they could even get close to approaching the value of Sonnet4 or Opus.
That said, I suspect a lot of the value in Claude Code is hand-rolled fined-tuned heuristics built into the tool itself, not coming from the LLM. It does a lot of management of TODO lists, backtracking through failed paths, etc which look more like old-school symbolic AI than something the LLM is doing on its own.
Where do you see the major price increases coming from?
The underlying inference is not super expensive. All the tricks they're pulling to make it smarter certainly multiply the price, but the price being charged almost certainly covers the cost. Basic inference on tuned base models is extremely cheap. But certainly it looks like Anthropic > OpenAI > Google in terms of inference cost structure.
Prices will only come up if there's a profit opportunity; if one of the vendors has a clear edge and gains substantial pricing power. I don't think that's clear at this point. This article is already equivocating between o3 and Opus.
I find it kind of boggling that employers spend $200/month to make employees lives easier, for no real gain.
That’s right. Productivity does go up, but most of these employees aren’t really contributing directly to revenue. There is no code to dollar pipeline. Finishing work faster means some roadmap items move quicker, but they just move quicker toward true bottlenecks that can’t really be resolved quickly with AI. So the engineers sit around doing nothing for longer periods of time waiting to be unblocked. Deadlines aren’t being estimated tighter, they are still as long as ever.
Enjoy this time while it lasts. Someday employers might realize they need to hire less and just cram more work into individual engineers schedules, because AI should supposedly make work much easier.
Coding an actual solution is what, 5-10% of the overall project time?
I dont talk about some SV megacorps where better code can directly affect slightly revenue or valuation and thus more time is spend coding and debugging, I talk about basically all other businesses that somehow need developers.
Even if I would be 10x faster project managers would barely notice that. And I would lose a lot of creative fun that good coding tends to bring. Also debugging, 0 help there its all on you and your mind and experience.
Llms are so far banned in my banking megacorp and I aint complaining.
Serious question, how do you justify paying for any of this without feeling like it's a waste?
I occasionally use ChatGPT (free version without logging in) and the amount of times it's really wrong is very high. Often times it takes a lot of prompting and feeding it information from third party sources for it to realize it has incorrect information and then it corrects itself.
All of these prompts would be using money on a paid plan right?
I also used Claude (free trial on their paid plan) for a bit and I didn't find much of a difference. I would say whatever back-end it was using was possibly worse. The code it wrote was busted and over engineered.
I want to like AI and in some cases it helps gain insight on something but I feel like literally 90% of my time is it prodiving me information that straight up doesn't work and eventually it might work but to get there is a lot of time and effort.
The AI agents that run on your machine where they have access to the code, and tools to browse/edit the code, or even run terminal commands are much more powerful than a simple chatbot.
It took some time for me to learn how to use agents, but they are very powerful once you get the hang of it.
Depends on how much you use. I use AI to think through code and other problems, and write the dumb parts of code. Claude definitely works much better than the free offerings. I use OpenRouter [1] and spend only a couple of dollar per month on AI usage. It's definitely worth it.
I think it's a serious question because something really big is being missed here. There seem to be very different types of developers out there and/or working on very different kinds of codebases. Hypothetically, maybe you have devs or specific contexts where the dev can just write the code really fast where having to explain it to a bot is more time consuming, vs. devs /contexts where lots of googling and guessing goes on and it's easier to get the AI to just show you how to do it.
I'm actually employer mandated to continue to try/use AI bots / agents to help with coding tasks. I'm sort of getting them to help me but I'm still really not being blown away and still tending to prefer not to bother with them with things I'm frequently iterating on, they are more useful when I have to learn some totally new platform/API. Why is that? do we think there's something wrong with me?
> I'm actually employer mandated to continue to try/use AI bots / agents to help with coding tasks
I think a lot of this comes down to the context management. I've found that these tools work worse at my current employer than my prior one. And I think the reason is context - my prior employer was a startup, where we relied on open source libraries and the code was smaller, following public best practices regarding code structure in Golang and python. My current employer is much bigger, with a massive monorepo of custom written/forked libraries.
The agents are trained on lots of open source code, so popular programming languages/libraries tend to be really well represented, while big internal libraries are a struggle. Similarly smaller repositories tend to work better than bigger ones, because there is less searching to figure out where something is implemented. I've been trying some coding agents with my current job, and they spend a lot more time searching through libraries looking to understand how to implement or use something if it relies on an internal library.
I think a lot of these struggles and differences are also present with people, but we tend to discount this struggle because people are generally good at reasoning. Of course, we also learn from each task, so we improve over time, unlike a static model.
I'd try out cursor with either o3 or Claude 4 Opus. The free version of ChatGPT and Claude in Cursor are much better. That's also what this article claims and is true in my experience.
> Serious question, how do you justify paying for any of this without feeling like it's a waste?
I would invert the question, how can you think it's a waste (for OP) if they're willing to spend $1000/mo on it? This isn't some emotional or fashionable thing, they're tools, so you'd have to assume they derive $1000 of value.
> free version... the amount of times it's really wrong is very high... it takes a lot of prompting and feeding it information from third party
Respectfully, you're using it wrong, and you get what you paid for. The free versions are obviously inferior, because obviously they paywall the better stuff. If OP is spending $50/day, why would the company give you the same version for free?
The original article mentions Cursor. With (paid) cursor, the tool automatically grabs all the information on behalf of the user. It will grab your code, including grepping to find the right files, and it will grab info from the internet (eg up to date libraries, etc), and feed that into the model which can provide targeted diffs to update just select parts of a file.
Additionally, the tools will automatically run compiler/linter/unit tests to validate their work, and iterate and fix their mistakes until everything works. This write -> compile -> unit test -> lint loop is exactly what a human will do.
> This isn't some emotional or fashionable thing, they're tools, so you'd have to assume they derive $1000 of value.
This is not born out in my personal experience at all. In my experience, both in the physical and software tool worlds, people are incredibly emotional about their tools. There are _deep_ fashion dynamics within tool culture as well. I mean, my god, editors are the prima donna of emotional fashion running roughshod over the developer community for decades.
There was a reason it was called "Tool Time" on Home Improvement.
"Now we don't need to hire a founding engineer! Yippee!" I wonder all these people who are building companies that are built on prompts (not even a person) from other companies. The minute there is a rug pull (and there WILL be one), what are you going to do? You'll be in even worse shape because in this case there won't be someone who can help you figure out your next move, there won't be an old team, there will just be NO team. Is this the future?
Any cost/benefit analysis of whether to use AI has to factor in the fact that AI companies aren't even close to making a profit, and are primarily funded by investment money. At some point, either the cost to operate these AI models needs to go down, or the prices will go up. And from my perspective, the latter seems a lot more likely.
It get even darker - I was around in the 1990s and a lot of people who ran head on into that generation’s problems used those lessons to build huge startups in the 2000s. If we have outsourced a lot of learning, what do we do when we fail? Or how we compound on success?
My Claude Code usage would have been $24k last month if I didn't have a max plan, at least according to Claude-Monitor.
I've been using a tool I developed (https://github.com/stravu/crystal) to run several sessions in parallel. Sometimes I will run the same prompt multiple times and pick the winner, or sometimes I'll be working on multiple features at once, reviewing and testing one while waiting on the others.
Basically, with the right tooling you can burn tokens incredibly fast while still receiving a ton of value from them.
Looked at your tool several times, but haven't answered this question for myself: does this tool fundamentally use the Anthropic API (not the normal MAX billing)? Presuming you built around the SDK -- haven't figured out if it is possible to use the SDK, but use the normal account billing (instead of hitting the API).
Love the idea by the way! We do need new IDE features which are centered around switching between Git worktrees and managing multiple active agents per worktree.
Edit: oh, do you invoke normal CC within your tool to avoid this issue and then post-process?
Claude code has an SDK, where you specify the path to the CC executable. So I believe thats how this works. Once you have set up claude code in your environment and authed with however you like, this will just use that executable in a new UI
Interesting, the docs for auth don't mention it: https://docs.anthropic.com/en/docs/claude-code/sdk#authentic...
Surprised that this works, but useful if true.
https://docs.anthropic.com/en/docs/claude-code/sdk#typescrip...
`pathToClaudeCodeExecutable`!
Thanks for showing!
Max $100 or $200?
I'm on $100 and i'm shocked how much usage i get out of Sonnet, while Opus feels like no usage at all. I barely even bother with Opus since most things i want to do just runout super quick.
Does Claude Max allow you to use 3rd-party tools with an API key?
There is no way those companies don't loose ton of money on max plans.
I use and abuse mine, running multiple agents, and I know that I'd spend the entire month of fees in a few days otherwise.
So it seems like a ploy to improve their product and capture the market, like usual with startups that hope for a winner-takes-all.
And then, like uber or airbnb, the bait and switch will raise the prices eventually.
I'm wondering when the hammer will fall.
But meanwhile, let's enjoy the free buffet.
Early stage founder here. You have no idea how worth it $200/month is as a multiple on what compensation is required to fund good engineers. Absolutely the highest ROI thing I have done in the life of the company so far.
At this point, question is when does Amazon tell Anthropic to stop because it’s gotta be running up a huge bill. I don’t think they can continue offering the $200 plan for too long even with Amazon’s deep pocket.
Inference is cheap to run though, and how many people do you think are getting their $200 worth of it?
Based on people around me and anecdotal evidence of when Claude struggles, a lot more than you think. I’ve done some analysis on personal use between Openrouter, Amp, Claude API and $200 subscription, I probably save around $40-50/day. And I am a “light” user. I don’t run things in parallel too much.
I don't know, I have to figure out another way to count money I guess, but that $200 gives me a lot of worth, far more than 200. I guess if you like sleeping and do other stuff than drive Claude Code all the time, you might have a different feeling. For us it works well.
My question wasn't if the $200 was worth it to the buyer. Renting an H100 for a month is gonna cost around $1000 ($1.33+/hr). Pretend the use isn't bursty (but really it is). If you could get 6 people on one, the company is making money selling inference.
Has anyone else done this and felt the same? Every now and then I try to reevaluate all the models. So far it still feels like Claude is in the lead just because it will predictably do what I want when given a mid-sized problem. Meanwhile o3 will sometimes one-shot a masterpiece, sometimes go down the complete wrong path.
This might also just be a feature of the change in problem size - perhaps the larger problems that necessitate o3 are also too open-ended and would require much more planning up front. But at that point it's actually more natural to just iterate with sonnet and stay in the driver's seat a bit. Plus sonnet runs 5x faster.
Is $200/month a lot of money when you can multiply your productivity? It depends but the most valuable currency in life is time. For some, spending thousands a month would be worth it.
> Is $200/month a lot of money when you can multiply your productivity?
My read was the article takes it as a given that $200/m is worth it.
The question in the article seems more: is an extra $800/m to move from Claude Code to an agent using o3 worth it?
As I said elsewhere... $200/month etc is potentially not a lot for an employer to pay (though I've worked for some recently who balk at just stocking a snacks tray or drink fridge...).
But $200/month is unbearable for open source / free software developers.
It's wild when a company has another department and will shell out $200/month per-head for some amalgamation of Salesforce and other SaaS tools for customer service agents.
At a previous job, my department was getting slashed because marketing was moving over to using Salesforce instead of custom software written in-house. Everything was going swimmingly, until the integration vendor for Salesforce just kept billing, and billing and billing.
Last I checked no one is still there who was there originally, except the vendor. And the vendor was charging around $90k/mo for integration services and custom development in 2017 when my team was let go. My team was around $10k/mo including rent for our cubicles.
That was another weird practice I've never seen elsewhere, to pay rent, we had to charge the other departments for our services. They turned IT and infrastructure into a business, and expected it to turn a profit, which pissed off all the departments who had to start paying for their projects, so they started outsourcing all development work to vendors, killing our income stream, which required multiple rounds of layoffs until only management was left.
IT charging other departments is standard practice at every large company I've been at.
I've seen it too - not uncommon. A frustrating angle is vendor lockin. You are required to only use the internal IT team for everything, even if they're far more expensive and less skilled. They can 'charge' whatever they want, and you're stuck with their skills, prices and timeline. Going outside of that requires many levels of signoffs/approvals, and untold amounts of time making your case. There's value in having some central purchasing process, but when you limit your vendors to one (internal or external) you'll creating a lot more problems that you don't need to have.
Well that leads to shadow IT and upper management throwing a shit fit when we can't fix their system we don't know anything about.
I suspect there's some accounting magic where salaries and software licenses are in one box and "Diet Coke in the fridge" is in another, and the latter is an unbearable cost but the former "OK"
But yeah, doesn't explain non-payment for AI tools.
Current job "permits" Claude usage, but does not pay for it.
> Current job "permits" Claude usage, but does not pay for it.
That seems like the worst of all worlds from their perspective.
By not paying for it they introduce a massive security concern.
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My butt needs to be in this chair 8 hours a day. Whether it takes me 20 hours to do a task or 2 doesn't really matter.
That's your problem, or your company or your country.
Here in EU, if not stated in your work agreement, it's pretty common people work full time job and also as a self-employed contractor for other companies.
So when I'm finished with my work, HO of course, I just work on my "contractor" projects.
Honestly, I wouldn't sign a full time contract banning me from other work.
And if you have enough customers, you just drop full time job. And just pay social security and health insurance, which you must pay by law anyway.
And specially in my country, it's even more ridiculous that as self-employed you pay lower taxes than full time employees, which truth to be told are ridiculously high. Nearly 40% of your salary.
In my country France, your contact May state hours, so you're paid to sit in the chair
Freelancing as a side hustle may be forbidden if your employer refuses
And it makes sense to pay more taxes since you also have more social benefits (paid leaves, retirement money and unemployment money), nothing is free
Hmm, not a practice I’ve come across in the EU. What countries specifically are you talking about?
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If you're salaried, you are not a task-based worker. The company pays you a salary for your full day's worth of productive time. If you can suddenly get 5x more done in that time, negotiate a higher salary or leave. If you're actually more productive, they will fight to keep you.
Your salary is not determined by your productivity, it's determined by market rates. 5X productivity does not mean 5X salary. Employers prey on labor market inefficiencies to keep the market rates low.
Any employer with 2 brain cells will figure out that you are more productive as a developer by using AI tools, they will mandate all developers use it. Then that's the new bar and everyone's salary stays the same.
Yeah a 20$ plan is prob enough for the AI slop you need to fill in your 8h working time. Unless you have many projects that require more AI slop that is.
This is why communism doesnt work lmao
Communism is an ideal but never a reality. What you see in reality is at best an attempt at communism which is quickly derailed by corruption and greed. I mean, it's great to have ideals, but you should also recognize when those ideals are completely impractical given the human condition.
By the way, this also applies to the "Free market" ideal...
Importantly, problems with the ideal shouldn't preclude good actions that take us in a direction.
There being problems with absolute libertarian free markets doesn't mean all policies that evoke the free market ideal must be disregarded, nor does the problems with communism mean that all communist actions must be ignored.
We can see a problem with an ideal, but still wish to replicate the good parts.
Sure. The issue for me is when people intentionally mislabel something to make it look worse.
For example, mislabelling socialism as communism. The police department, fire department, and roads are all socialist programs. Only a moron would call this communism and yet for some reason universal healthcare...
There's also this nonsense when someone says "That's the free market at work", and I'm like, if we really lived in a free market then you'd be drinking DuPont's poison right now.
Using the words "Communism" and "Free market" just show a (often intentional) misunderstanding of the nuance of how things actually work in our society.
The communism label must be the most cited straw man in all of history at this point.
for all the lip service capitalists give to the free market, they hate it. their revealed preference is for a monopoly.
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maybe the issue is capitalism where even if your productivity multiplies x100
your salary stays x1
and your work hours stay x1
More accurate representation is this:
Productivity multiplies x2 You keep your job x0.5 Your salary x0.8 (because the guy we just fired will gladly do your job for less) Your work hours x1.4 (because now we expect you to do the work of 2 people, but didn’t account for all the overhead that comes with it)
But aren't you supposed to be incentivized to work harder by having equity?
As a non-founder / not a VC you max get a few percentage points, and its mostly paper toilet money until there's an exit or IPO, and the founders will always try to squeeze you if they can, not because they're bad people, but because the system incentivises it. (you'll keep getting diluted in future rounds)
tbh, if im gonna bust my ass I'd rather own the thing.
A recent job offer for a startup was a 5 year vest with a 2 year cliff. Seriously?
Equity is a lottery ticket. Is sacrificing my happiness or life balance in the near term worth the gamble that A) my company will be successful, and B) that my equity won’t have been diluted to worthlessness by the time that happens? At higher levels of seniority/importamce/influence this might make sense, but for most people I seriously doubt it does, especially early in their careers.
That doesn’t happen anywhere outside of Silicon Valley.
And even in Silicon Valley you get the survivor ship bias of the 1% of companies getting to IPO and making their employees decent exit stories...
99% of startups die off worthless and your equity never realises.
Quite literally not.
Capitalism encourages you to put your butt in your own seat and reap the rewards of your efforts.
Of course it also provides you the decision making to keep your butt in someone else’s seat if the risk vs. reward of going your own isn’t worth it.
And then it allows your employer to put another butt in your seat if you don’t adopt efficiency patterns.
So: capitalism is compatible with communism as an option, but it’s generally a suboptimal option for one or both parties.
No it doesn't. People tell that story but the system is incredibly heavily leveraged to prevent that.
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Maybe in a true -capitalistic- market that'd happen.
but the state keeps meddling and making oligarchs and friends have unfair advantages.
It's hard to compete when the system is rigged from the start.
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I am literally describing my life in a capitalist society....
I think that was the joke
Interesting. Though it seems they are themselves building Agentic AI tooling. It's vibe coding all the way down - when's something real going to pop out the bottom?
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I really hope we can avoid metered stuff for the long-term. One of the best aspects of software development is the low capital barrier to entry, and the cost of the AI tools right now is threatening that.
I'm fortunate in that my own use of the AI tools I'm personally paying for is squished into my off-time on nights and weekends, so I get buy with a $20/month Claude subscription :).
I can see how pricing at 100 to 200$ per month per employee could make sense for companies, it’s a clear value proposition at that scale. But for personal projects and open source work, it feels out of reach. I’d really like to see more accessible pricing tiers for individuals and hobbyists. Pay per token models don’t work for me either; earlier this year, I racked up almost $1,000 in a month just experimenting with personal projects, and that experience has made me wary of using these tools since.
Sources
I’ve seen some people describe getting pretty good value out of the Claude $20 plan with Claude Code?
Pro is fine for medium sized projects, stick to 1 terminal.
Github Copilot has unlimited GPT-4.1 for $10/month.
> Pay per token models don’t work for me either; earlier this year, I racked up almost $1,000 in a month just experimenting with personal projects, and that experience has made me wary of using these tools since.
Can't have your cake and eat it too.
Behold the holy trifecta of: Number of Projects - Code Quality - Coding Agent Cost
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I just pay $20/month on ChatGPT and spend the entire day coding with its help, no need to pay for tokens, no need to integrate it on your IDE.
Charging $200/month is economically only possible if there is not a true market for LLMs or some sort of monopoly power. Currently there is no evidence that this will be the case. There are already multiple competitors and the barrier to entry is relatively low (compared to e.g. the car industry or other manufacturing industries), there are no network effects (like for social networks) and no need to get the product 100% right (like compatibility to Photoshop or Office) and the prices for training will drop further. Furthermore $200 is not free (like Google).
Can anyone name one single widely-used digital product that does _not_ have to be precisely correct/compatible/identical to The Original and that everyone _does_ pay $200/month for?
Therefore, should prices that users pay get anywhere even close to that number, there will naturally be opportunities for competitors to bring prices down to a reasonable level.
I think you forgot to consider the cost of providing the inference.
Since this is a business problem.
* It's not clear on how much revenue or new customers is generated by using a coding agent
* It's not clear on how things are going on production. There's only talks about development in the article
I feel ai coding agents will give you the edge. Just this article doesn't talk about revenue or PnL side of things, just perceived costs saved from not employing an engineer.
So what we do at NonBioS.ai is to use a cheaper model to do routine tasks, but switch to a higher thinking model seamlessly if the agent get stuck. Its most cost efficient, and we take that switching cost away from the engineer.
But broadly agree to the argument of the post - just spending more might still be worth it.
> literally changing failing tests into skipped tests to resolve “the tests are failing.”
Wow. It really is like a ridiculous, over-confident, *very* junior developer.
I love how paying for prompts stuck. Like, if someone's going to do your homework for you, they should get compensated.
I get a lot of value out of Claude Max at $100 USD/month. I use it almost exclusively for my personal open source projects. For work, I'm more cautious.
I worry, with an article like this floating around, and with this as the competition, and with the economics of all this stuff generally... major price increases are on the horizon.
Businesses (some) can afford this, after all it's still just a portion of the costs of a SWE salary (tho $1000/m is getting up there). But open source developers cannot.
I worry about this trend, and when the other shoe will drop on Anthropic's products, at least.
Those market forces will push the thriftier devs to find better ways to use the lesser models. And they will probably share their improvements!
I'm very bullish on the future of smaller, locally-run models, myself.
I have not invested time on locally-run, I'm curious if they could even get close to approaching the value of Sonnet4 or Opus.
That said, I suspect a lot of the value in Claude Code is hand-rolled fined-tuned heuristics built into the tool itself, not coming from the LLM. It does a lot of management of TODO lists, backtracking through failed paths, etc which look more like old-school symbolic AI than something the LLM is doing on its own.
Replicating that will also be required.
If it weren't for the Chinese, the prices would have been x10.
Where do you see the major price increases coming from?
The underlying inference is not super expensive. All the tricks they're pulling to make it smarter certainly multiply the price, but the price being charged almost certainly covers the cost. Basic inference on tuned base models is extremely cheap. But certainly it looks like Anthropic > OpenAI > Google in terms of inference cost structure.
Prices will only come up if there's a profit opportunity; if one of the vendors has a clear edge and gains substantial pricing power. I don't think that's clear at this point. This article is already equivocating between o3 and Opus.
Just a matter of time before AI coding becomes commodity and prices drop. 2027
I find it kind of boggling that employers spend $200/month to make employees lives easier, for no real gain.
That’s right. Productivity does go up, but most of these employees aren’t really contributing directly to revenue. There is no code to dollar pipeline. Finishing work faster means some roadmap items move quicker, but they just move quicker toward true bottlenecks that can’t really be resolved quickly with AI. So the engineers sit around doing nothing for longer periods of time waiting to be unblocked. Deadlines aren’t being estimated tighter, they are still as long as ever.
Enjoy this time while it lasts. Someday employers might realize they need to hire less and just cram more work into individual engineers schedules, because AI should supposedly make work much easier.
> Someday employers might realize they need to hire less and just cram more work into individual engineers schedules
We are already past that point. The high water mark for Devs was ironically in late 2020 during Covid, before RTO when we were in high demand.
There's been pretty widespread layoffs in tech for a few years now.
Coding an actual solution is what, 5-10% of the overall project time?
I dont talk about some SV megacorps where better code can directly affect slightly revenue or valuation and thus more time is spend coding and debugging, I talk about basically all other businesses that somehow need developers.
Even if I would be 10x faster project managers would barely notice that. And I would lose a lot of creative fun that good coding tends to bring. Also debugging, 0 help there its all on you and your mind and experience.
Llms are so far banned in my banking megacorp and I aint complaining.
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Serious question, how do you justify paying for any of this without feeling like it's a waste?
I occasionally use ChatGPT (free version without logging in) and the amount of times it's really wrong is very high. Often times it takes a lot of prompting and feeding it information from third party sources for it to realize it has incorrect information and then it corrects itself.
All of these prompts would be using money on a paid plan right?
I also used Claude (free trial on their paid plan) for a bit and I didn't find much of a difference. I would say whatever back-end it was using was possibly worse. The code it wrote was busted and over engineered.
I want to like AI and in some cases it helps gain insight on something but I feel like literally 90% of my time is it prodiving me information that straight up doesn't work and eventually it might work but to get there is a lot of time and effort.
The AI agents that run on your machine where they have access to the code, and tools to browse/edit the code, or even run terminal commands are much more powerful than a simple chatbot.
It took some time for me to learn how to use agents, but they are very powerful once you get the hang of it.
> much more powerful than a simple chatbot
Claude Pro + Projects is a good middle ground between the two. Things didn't really "click" for me as a non-developer until I got access to both.
Depends on how much you use. I use AI to think through code and other problems, and write the dumb parts of code. Claude definitely works much better than the free offerings. I use OpenRouter [1] and spend only a couple of dollar per month on AI usage. It's definitely worth it.
[1] https://openrouter.ai No affiliation
I can't believe people are still writing comments like this lol how can it be
I think it's a serious question because something really big is being missed here. There seem to be very different types of developers out there and/or working on very different kinds of codebases. Hypothetically, maybe you have devs or specific contexts where the dev can just write the code really fast where having to explain it to a bot is more time consuming, vs. devs /contexts where lots of googling and guessing goes on and it's easier to get the AI to just show you how to do it.
I'm actually employer mandated to continue to try/use AI bots / agents to help with coding tasks. I'm sort of getting them to help me but I'm still really not being blown away and still tending to prefer not to bother with them with things I'm frequently iterating on, they are more useful when I have to learn some totally new platform/API. Why is that? do we think there's something wrong with me?
> I'm actually employer mandated to continue to try/use AI bots / agents to help with coding tasks
I think a lot of this comes down to the context management. I've found that these tools work worse at my current employer than my prior one. And I think the reason is context - my prior employer was a startup, where we relied on open source libraries and the code was smaller, following public best practices regarding code structure in Golang and python. My current employer is much bigger, with a massive monorepo of custom written/forked libraries.
The agents are trained on lots of open source code, so popular programming languages/libraries tend to be really well represented, while big internal libraries are a struggle. Similarly smaller repositories tend to work better than bigger ones, because there is less searching to figure out where something is implemented. I've been trying some coding agents with my current job, and they spend a lot more time searching through libraries looking to understand how to implement or use something if it relies on an internal library.
I think a lot of these struggles and differences are also present with people, but we tend to discount this struggle because people are generally good at reasoning. Of course, we also learn from each task, so we improve over time, unlike a static model.
I'd try out cursor with either o3 or Claude 4 Opus. The free version of ChatGPT and Claude in Cursor are much better. That's also what this article claims and is true in my experience.
> Serious question, how do you justify paying for any of this without feeling like it's a waste?
I would invert the question, how can you think it's a waste (for OP) if they're willing to spend $1000/mo on it? This isn't some emotional or fashionable thing, they're tools, so you'd have to assume they derive $1000 of value.
> free version... the amount of times it's really wrong is very high... it takes a lot of prompting and feeding it information from third party
Respectfully, you're using it wrong, and you get what you paid for. The free versions are obviously inferior, because obviously they paywall the better stuff. If OP is spending $50/day, why would the company give you the same version for free?
The original article mentions Cursor. With (paid) cursor, the tool automatically grabs all the information on behalf of the user. It will grab your code, including grepping to find the right files, and it will grab info from the internet (eg up to date libraries, etc), and feed that into the model which can provide targeted diffs to update just select parts of a file.
Additionally, the tools will automatically run compiler/linter/unit tests to validate their work, and iterate and fix their mistakes until everything works. This write -> compile -> unit test -> lint loop is exactly what a human will do.
> This isn't some emotional or fashionable thing, they're tools, so you'd have to assume they derive $1000 of value.
This is not born out in my personal experience at all. In my experience, both in the physical and software tool worlds, people are incredibly emotional about their tools. There are _deep_ fashion dynamics within tool culture as well. I mean, my god, editors are the prima donna of emotional fashion running roughshod over the developer community for decades.
There was a reason it was called "Tool Time" on Home Improvement.
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