Nobody Wants Anthropic’s Best AI Model Anymore Now That There Are Way Cheaper Alternatives

One thing that could put a dent in the hype around Anthropic’s upcoming, multitrillion dollar IPO? People preferring cheapo models over its flagship AI products.

Recent spending data from 70,000 US companies collected by the payments group Ramp shows that spending on Fable 5, Anthropic’s priciest and most powerful model, has plateaued at only 11 percent of the overall outlay, or money spent, on its AI tools, the Financial Times reported.

It reflects a shift in how enterprise users are using flagship models, reserving them only for the most complex tasks while letting more than serviceable cheaper models take care of the dirty work. Those cheaper alternatives can be Anthropic’s own older models, or open-weight models offered by Chinese competitors.

If the pattern holds, according to the FT, it could upend the go-big-or-go-home business model of leading AI labs, which have focused on pouring their resources into building even larger and more complex models.

“Most people don’t need to operate at the frontier,” Miles Clements, a partner at the venture capital firm Accel, which has invested $1 billion in Anthropic, told the FT.