I use DeepSeek. I'm very familiar with open models. I run a popular benchmark to check their progress.
DeepSeek is somewhere between Sonnet and Opus in capability, for much lower price.
Their $0.87 per million output tokens is one of the few API offerings that is probably subsidized (the break-even price is probably around $2 judging by[1])
I think Anthropic and OpenAI's margins will erode some over time. But I think they are very profitable now on the API prices they are charging, and their margins will remain healthy.
Put it like this: AWS is a very expensive way of getting compute, and there are numerous competitors that are much cheaper.And yet AWS is very profitable.
DeepSeek is somewhere between Sonnet and Opus in capability, for much lower price.
Their $0.87 per million output tokens is one of the few API offerings that is probably subsidized (the break-even price is probably around $2 judging by[1])
I think Anthropic and OpenAI's margins will erode some over time. But I think they are very profitable now on the API prices they are charging, and their margins will remain healthy.
Put it like this: AWS is a very expensive way of getting compute, and there are numerous competitors that are much cheaper.And yet AWS is very profitable.
[1] https://openrouter.ai/deepseek/deepseek-v4-pro#providers