Does this work if its all digital?
This from Alex Banks at the Signal had me thinking about two big questions (The Signal is a great read):
Question 1: What am I paying for?
People truly don’t know what they’re paying for when they pay for AI. You aren’t paying for intelligence, or code complete, or sentience. You’re paying for tokens. Tokens that get fed back into the model to generate more tokens. Sometimes things take a lot of tokens. Sometimes things take a whole lot of tokens. Do you know how many tokens your task will take before you start it? No. No one knows. In particular, as models improve and new versions are released, the amount of post-training reasoning (read: tokens) that get generated before output may change (in one direction). So when limits adjust and people get grumpy, it’s because the AI provider has rationed your tokens.
Question 2: How easy is it to switch?
These quotes from Alex are key:
Part 1:
This is the Uber playbook en masse. Subsidise rides until everyone deletes their cab app, then raise prices once the dependency is locked in. Anthropic is doing the same thing with AI compute. Burning through venture capital to buy market share, building workflow dependency, and slowly correcting the subsidy as users get too embedded to leave.
Part 2:
And the competitive pressure is mounting. Paying subscribers are openly comparing Claude’s tight limits to what they’re getting from OpenAI, where some plans offer hundreds of requests without ever hitting a ceiling. When your product is the best in the room but people can’t actually use it, the goodwill burns fast.
Switching from Uber to Lyft, for example, involves downloading a new app, moving payment information, and losing any and all repuational, promotional, historical credit that has been built up on Uber. Uber’s playbook works because Gmail’s playbook works because Facebook’s playbook (kinda) works. All of my stuff is here, and I don’t want to move it.
With AI, and especially with the ability to document everything in markdown, the cost of switching is tiny. For a developer, you simply change the API that you’re hitting. If you’re less technical, I’m sure Claude will tell you how to switch.