Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices. They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs. They are subsidizing model access in exchange for user logs and reasoning traces, which they then sell as training data, allowing them to operate below cost.
Claude and ChatGPT are both blocked in China. You need to use a VPN to access either, and you can't pay with a Chinese bank card. So most people who want access to Claude buy access via a reseller. It's the easiest and cheapest way to access Anthropic models in China.
These resellers operate tens of thousands of bot accounts, which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.
This is one reason why DeepSeek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.
China aren't offering a cheaper solution. They are subsidizing an existing one (which is already subsidized) in order to gain foothold. The difference is that in the US subsidies come from VC, while OP implies subsidies come from the AI labs that buy the training data (which may as well also be VC backed, so just one extra hop).
This isn't "the market working as intended", this is an exhaustion fight to the bottom where the one with most money gets to stay in the market. As with most venture capital startups. I believe this VC tactic is a well documented "cheat code" to bypass market forces and build a monopoly. I find it hard to compare that with a free market.
However, I don't really mind China "stealing" from Anthropic. For us consumers we are getting the cake and eating it too. I.e we are getting rapid improvement to the tune of over a hundred billion dollars in funding, yet the market remains big enough that there's a chance of it not ending up as a monopoly in 20 years. And venture capital are footing the bill. A part of their investment is practically being redirected to fund Chinese AI development. It lets us live out our lives as happy CAC farmers[1].
So I would argue its not as much of a "cheaper solution" as it is intentionally and maliciously abusing another company's product to extract more value than the billing plans intend (given an average user), and further subsidizing the product by selling this data to competitors. But I don't necessarily think its a bad thing for us end-users. Nor for the market. But it is bad for Anthropic and its investors.
> China aren't offering a cheaper solution. They are subsidizing an existing one
Chinese labs are also pursuing legit frontier-advancing R&D into efficiency and publishing papers in the open, a culture that's in retreat at top American AI labs
> China aren't offering a cheaper solution. They are subsidizing an existing one
So basically like US companies subsidizing offerings with selling user data, ads for crypto scams, manipulation for elections, making people addicted to gambling and so on?
Seems fair and an improvement as you can choose between that and not. Unlike say offerings from Meta where the data selling and efforts to further gambling addiction is always included.
> China aren't offering a cheaper solution. They are subsidizing an existing one (which is already subsidized) in order to gain foothold.
In my economics classes, we were told that (in a "free market" argument) the best thing to do if a subsidy is making something you want cheaper is to use it. You're getting your thing, and at a reduced cost.
(I'm not really replying to you per se, I'm curious how "free market" folks in these comments would respond to this.)
This is why I don't understand why people complain about impractically cheap Chinese solar panels. The rest of the world should buy enormous quantities and bankrupt the mofos and hugely benefit along the way. Then later they can set up their own solar panel industries.
All I can say is lol. DeepSeek showing 3 order of magnitude efficiency gains over the performative capital furnace that was training and inference absolutely moved the bar here.
I mean, for what it's worth, we have subsidized Anthropic by allowing them to train on copyrighted stuff. (I know it is still legal, and I support the legality, but the economics are what they are with people's content paying a big one time subsidized cost (to the level of at least 500B).
That's some "download a car", $100000 per infringement pricing logic. No one is paying anyone 500 billion dollars. I'm sure rights owners wanted that, and more too, but it's nonsense to call it a subsidy that they didn't get it.
If we as individuals were sued it surely would be at least an order of magnitude difference between what is required from us vs Anthropic or OpenAI. That’s even completely ignoring the marginal utility of money. It is absolutely a subsidy. It’s just less fair because that power, to pay pennies on the dollar, is only given to corporations.
Seriously AI companies complaining about fair use is the biggest case of crocodile tears I can think of. Irony has been dead for a while, but they dug up the corpse and set it on fire anyway.
black and white hat is relative. someone breaking into a state run database in a dictatorship and stealing documents that prove some opposition leader was murdered would be a black hat criminal if you ask their government. a hacker jailbreaking a phone to let people fix it without expensive official service is a black hat to the company. we should really switch to saying offensive and defensive or something else that doesnt come with moral implications. maybe lawful and chaotic.
Ok, but what about those shady sites that resell Windows education keys? They're certainly a "better experience" than buying legit keys, by virtue of being significantly cheaper. You aren't even really committing copyright infringement in the process, because Microsoft gives out windows isos for free, and the seller is really selling a random 25 character string, which can hardly be copyrighted.
>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.
>>If there’s any bootlegging going on it’s Anthropic that’s doing the bootlegging but having mirrored the video etc sufficiently to beat copyright law.
>US courts have consistently ruled it's fair use.
And they also have ruled that the that output of an AI isn't copyrightable.
As such copying claudes output isnt even fair use as that is an exemption to copyright but the same as copying public domain work which any and all are allowed to do.
> Ok, but what about those shady sites that resell Windows education keys?
Yes, they are fine? They might no longer include full first party support by Microsoft for not being "new". Same as buying a used car (also comes with the "shady sites" for a far longer time).
Though this not making any difference by Microsoft not doing any support either way to make more money is a business decision by Microsoft.
The current case law in the US is that the raw output of an LLM cannot be copyrighted without further meaningful arrangement or alteration by a human author.
any third party provider can offer zdr. if its a reputable company in a place like switzerland or germany i would trust them more than anthropic to hold up that promise.
> Yeah, like all those Chinese bootleggers selling DVDs for a few dollars rather than $20. Free market!
It's supremely ironic analogize distillation to copyright infringement when it's literally what Anthropic was found guilty of. It's not illegal to distill. It is illegal to pirate. And it's what Anthropic was found guilty of, not Alibaba.
I get the vague impression that this was written in a sarcastic way, but it has a straightforwardly true literal read because yes, this is what the free market is about and Anthropic will have to compete with the Chinese if they want a big share of the market. Chinese models are cheap and good; even without reselling Anthropic's services they're competitive. Which reading did you intend?
And, gotta say, the idea that the Chinese are better at selling US models than the Americans is hilarious. There might be an economic study here somewhere about just how anti-consumer and anti-progress their IP laws turned out to be. We've got an entire postindustrial revolution centred around who can ignore the most stupid laws.
Given the current US government's tightening of export control restrictions and the introduction of a bipartisan bill to block use of Chinese AI in federal agencies, I'd say the two countries' positions are not far apart.
That is ALSO happening, but that's beside the point.
Chinese AI apps like DeepSeek are freely available for ordinary Americans to download and use. There's no federal law banning private citizens from using them.
So to claim that Chinese companies are better at selling American companies' work than the American companies can do themselves when they are prohibited from operating in that market, is the wrong deduction to make.
In debt the first 5000 years Geaeber makes the case that pure “free market” trade has never really existed in “the west”. The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.
>The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.
How does are bans against consensual financial exchanges close to the "ideal" of the free market? It just sounds like you have an axe to grind about the financial system rather than describing free markets.
What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever
> What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever
Wait, so your pitch in favor of a debt-fueled market economy is that advertising is awesome and that we wouldn't want to "lose" being smothered in ads all the time?
Cause... sign me up for the non-financialized, non-mass-media-advertising-driven economy please and thank you. I'd even be ok with just nuking billboards and mass-media forms of ads and still allowing more direct forms of marketing, if we must compromise! Likely we could find some compromises around just how much of the debt world we regulate too (this should be obvious?).
(I thought the disconnect between the efficiency of competition and the market as realized in modern economies was pretty well understood and taken for granted, but I guess we all find ways to justify the system we're profiting from... even if that means we have to claim we love the ad breaks)
I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.
>I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.
While these are hardly shy claims, I don't see anything in them to say "only the West does irresponsible loans"?
> The West is in a state of psychosis with Debt and Monopolies under the illusion of free market.
> The Chinese markets are more free than West, you can just look at the Auto and AI industry.
or the prior post
>Usury and debt based economy creates a dynamic where being competitive in production is secondary to financialistion.
> In short, instead of market being driven by demand and productivity, it is driven by financier curving out monopolies.
> Peak Examples are Uber and AirBnB.
You can throw a rock these days and find a category where the products coming out of China are miles ahead of those coming out of the rest of the world, from a bunch of companies nobody had heard of a few years earlier. And the list is growing pretty steadily.
I would assume plenty of shortsighted decisions are also being made. But I would have a hard time characterizing the state of competition in the west as healthier or more productive when looking at the number of players and the quality of goods being produced in China.
...except Uber STILL faces competition, and I went back to hotels after finding AirBnB too pricy.
It is good and proper that people aim to create monopolies, as long as they want to do that in a productive and legal way! Monopolies are inherently dangerous, but the truth is that acquiring and maintaining one is not straightforward unless you can get the government to ban your competitors.
That's not true. Islamic finance forbids indefinitely growing interest. Sharia finance agreements involve fixed fees or equity shares. Late penalties can be collected but must be donated, not profit. In all cases, the borrower never owes to the lender for the lender to keep more an a fixed amount determined at the strat.
What is the implication here? Are you warning that US corporations might start doing something shady, like scraping the internet at large scale for training data? Or mass-dowloading pirated copies of books, completely ignoring copyright?
I find it hard to imagine a future where US corporations have degraded to such a point.
No, he means that the US will close most of its domestic market to competition just like China has for decades, and the US may start subsidizing and dumping its goods everywhere
> the US may start subsidizing and dumping its goods everywhere
Isn't that exactly what companies like Uber have already been doing? Take VC money, sell goods & services at a huge loss, wait until the competition goes bankrupt.
Exactly, it's funny how most Americans have no self-awareness on this topic.
And beyond VCs, which are like massive subsidies funded by printed dollars to which no other country has access, even in industries like electric vehicles, Chinese total direct subsidies to their EV companies are like $5bn per year, while the the ones provided by the US to their auto manufacturers are in the range of $50bn per year.
I don't think the US are cheaters or are doing something bad. But i do think that this propaganda about China flooding the market through "overcapacity" and subsidies is very dishonest and needs to stop.
Yes. Dumping abroad is the entire model that Silicon Valley has been built on in the last 2 decades. China just copied the model. And even then it's a light version of it.
What’s worse, tariffs or outright banning the competition from your market? China has done both despite globalism being what has lifted it from poverty. Why is everyone suddenly surprised that globalism and free markets are coming to an end? Is this a net good? Mostly no unless you count more redundant supply chains.
The surviving non-American farmers would be confused by the future-speculative tense as America has already been doing this for decades in agriculture, and have been complaining for decades about both the subsidies and dumping of American corn.
Sure, but not at China’s scale and no where close to number of industries where China does it. Why? The US was a net importer in order to support the dollar being the global reserve.
Most of the Chinese domestic market is open to foreign competition. The areas that are closed off are those that are politically sensitive: publishing (including social media) and banking.
As for dumping, Chinese goods generally sell at a markup abroad, which is the opposite of dumping. Chinese tokens cost more abroad. Chinese cars cost several times more in Western markets than in China.
> Chinese goods generally sell at a markup abroad, which is the opposite of dumping
Dumping is selling goods below cost.
Usually because government is subsidizing part of the production. I don’t believe the word “dumping” is used for the similar process when Venture Capital is subsidizing it, but using the same term would make sense.
Price at home vs. abroad is key. The term dumping comes from the idea that a company that sells profitably in its home market dumps excess production abroad at below cost.
This is not what is happening here. Chinese manufacturers are making a large profit off every car they sell in Western markets. As I said above, they're selling these cars at several times the price they charge in China. Unless you believe these cars are being sold at just 30% of cost in China, there's no way Chinese companies are selling below cost in the West.
> I don’t believe the word “dumping” is used for the similar process when Venture Capital is subsidizing it,
I've been doing so for years. How about you join me today. I already see two other users doing the same, so there'll be at least 4 of us.
It's blatantly dumping, whether the source of the money is directly the government (those in power) or VC (mostly US billionaires (trillionaires?), in other words, those in power) is a trivial implementation detail.
"Dumping" is when Chinese companies beat Western ones on the free market. If all claims of Chinese government subsidies on basic products were true, China would've gone bankrupt multiple times already.
You're being beaten by a Chinese company? Why improve your own process when you can just lobby for sanctions and tariffs instead!
That does not explain DeepSeek, nor does it explain the car industry.
The main advantages the Chinese car industry has right now are: they lead in battery R&D, production is highly automated, they iterate quickly, Chinese work culture is extremely competitive and things get done fast, and the Chinese state has policies to promote EV adoption, so there's a huge domestic market.
Note that the last point is different from subsidies to car manufacturers. Cities made it difficult to get license plates for ICE cars. The government encouraged the massive buildout of charging infrastructure. And it used consumer rebates, like California did.
The US spent decades transferring manufacturing, capital, and know-how to China, while Chinese students trained, and excelled, at elite Western universities. Why are people surprised that China eventually became capable of competing with the US?
The "free market" gave the PRC its current strategic lock on rare-earth minerals. There's definitely no such thing as a free market in a Maoist dictatorship. I personally think the "free market" concept is an unachievable ideal and thought-terminating cliche, but "free market in a Maoist dictatorship" is for sure a contradiction in terms.
Free markets work when paired with property laws that can be enforced if broken. If China could offer a cheaper solution in that framework, it would be as you say.
AI was always going to be a race to the bottom and low margins. It’s why I’m extremely bearish on AI as an investment. It’s framed as some high margin business when it’s really going to end up like your toilet paper at Costco. You will use whatever is cheapest and gets the job done.
And the value-add experiences that utilise LLMs require immense imagination et al that folks at Anthropic will not be able to conceive of - given that they have made immense sunk investments in existing assets. This clouds ones thinking immensely.
Both OAI and Anthropic have tremendous failure risk and this is of course not reflected in the fake private market valuations.
I see a world where lots of stuff is mass produced in china (tokens) but the acutal goods that deliver the experiences are designed, marketed and sold in the west at much higher prices. of course this a nightmare scenario for anthropic et al.
I used to think this.. but I think my opinion is changing. The reason is that the leaders likely will be able to accelerate faster.
So what you see is the market "stretching".. the bottom getting cheaper and the top end running away and getting more expensive. At some point the top end may be too valuable to even sell access to.
Most white-collar/knowledge-service-industry work is a weird type of work.
It's fundamentally about enabling things and largely middleman-type stuff. I have a hard time imaging what "At some point the top end may be too valuable to even sell access to." would even look like? What are you doing with that AI power, and who is paying for the output and why?
Elon probably isn't gonna spend that much on a model that can generate him ever-better fake porn but does nothing that he can use to sell stuff to other people. Especially in a world where open models are "good enough" for many things like "tell me how to fix the plants in my garden that are dying" and the like. What remains in the narrow knowledge-work space of: can't be done by an individual or small group themselves, but is valuable enough that it would make sense for people to hoard access to these extreme frontier models? Try to recreate Hollywood-as-a-monopoly by becoming the single content producer for everyone's individualized feed and so owning all the advertising budget in the world? Seems hard, we've already seen how easy it is for cheap-and-crappy-but-addictive-or-funny content to disrupt traditional media.
(There's also pure scientific research, but historically that's not very directly connected to "massive profit" and has a habit of leaking out and getting productized most effectively by other people or just being really easy to copy once someone shows how it's done.)
Robotics could be a different story, as physical labor can be more inherently productive, but "reasoning" advantages are unlikely to be a big long-term differentiator there. At some point the brick laying robot is satisfactorily building the structure, and you're good.
A huge amount of the value of "the economy" and the power of a currency is driven by circulation of money, and one thing that all the "bullshit jobs" white-collar/service-industry work does is keep the money moving and ensure that a lot of people have some good-or-services of value to exchange. If you take away the ability to offer services worth exchange from huge chunks of the economy in these super-frontier-models-replace-everything scenarios... you're gonna have a bad time?
> The reason is that the leaders likely will be able to accelerate faster
Model improvement is already hitting diminishing returns, and people aren't willing to pay substantially more for a slightly better model. There's no "accelerating away" when the new models don't open up a huge new market. If anything, the companies burning huge amounts of money on marginal improvements will be undercut by companies happy to sell current models at a significantly lower cost.
Glm 5.2 very much argues against that. Opus 4.8 level quality for cheap. That’s sufficient for most tasks, so if/when you do need SOTA models you can spend more for specific tasks but otherwise rely on the cheap but still plenty good models for everything else
If you keep studying econ you will learn that these failures are actually the norm, and thus why the only "capitalist" states to really succeed have been the ones where the state was strong enough to reign in the market.
Of course, such a state of affairs is temporary at best -- since the alternative is so lucrative!
Do you also think Chinese selling counterfeit US postage stamps on eBay for 50% retail price (which is a major problem CBP and USPIS are fighting presently) is the free market at work?
This post is so delusional and dripping with condescension I've read it three times and I still can't figure out if you're trolling or not.
If I understand your argument it's ethically ok to destill huge swathes of copyrighted work into a model without compensation, but then it is ethically wrong to use that model without compensation (well actually reduced pricing)?
I don't get the moral framework that you're applying. Could you elaborate?
Over the air TV also isn’t public domain. It’s licensed to a station for broadcast. The output of an LLM has been deemed ineligible for copyright. Until you square that pickle your circle isn’t circling.
Free over-the-air network TV is (generally) copyrighted.
The output of LLMs cannot be copyrighted. This isn't a semantic game; it's literally the case that Anthropic cannot seek relief for people duplicating the output of an LLM.
The relief available to a licensor for violating a license use restriction is cancellation of the license. And they're free to do that, just like Alibaba is free to pay somebody in Hyderabad $20 to make another one.
DMCA can't apply in this case because (this is the "C" in its initialism) it is based on copyright protections, which the output of Claude is not eligible for.
I mean, which lawyer caste do you respect? Is that one is cool with stealing credit cards to buy Claude subscriptions?
> 3. At an Italian airport: Constantly stealing bags, opening them to pick out MacBooks and credit cards, a credit card manufacturer-who sells stolen "black" credit card info to transfer stations— is racking his brains to save you money.
> This is one reason why Deepseek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.
This one does not make sense to me at all.
Deepseek and GLM are openweights, even US inference provider are selling them at much cheaper price. The price is cheap because the model is more efficient.
DeepSeek permanently cut its V4-pro API prices by 75% because they were too expensive. Without the price cut, Deepseek V4-pro tokens would have cost more than resold Opus 4.8 tokens.
Opus 4.8 is a more capable model, so almost nobody was going to pay for V4-pro at the original price.
> Without the price cut, Deepseek V4-pro tokens would have cost more than resold Opus 4.8 tokens.
You mean it's functionally as if American tokens are being price dumped in China and Chinese model providers are being forced to compete with that and innovate? So many delicious layers of irony, lol :-P
Urm, no? I man they did cut prices by 75% that part is true - but they reduced a starting price that was below sonnet.
Also it's a open weight model, doing that is impossible long term because the real price will be set by the other model providers, who priced it around 60% of sonnet inference cost. Had to look that up though, so that's today's pricing.
Is there a contradiction here? If resold Opus tokens are sold at a 93% discount, you can be a lot cheaper than Sonnet while also a lot more expensive than resold Opus tokens.
If resold Anthropic tokens undercut even the at-cost open-weight model tokens, because they're reselling subsidized subscription tokens, then you'd have to start selling open-weight model tokens at a loss in order to match them.
>They achieve this by reselling capacity from pooled Claude Max 5x accounts, payments fraud, and also reselling the model output to various Chinese labs.
But is it cheaper than getting your own account? Otherwise this sounds like the "anthropic/openai are losing gazillions of dollars because they're selling $1k worth of tokens for $100" line that's commonly trotted out by AI bears.
It's very difficult for people to create personal Anthropic accounts from China. Anthropic blocks Chinese bank cards, so people must pay with a foreign bank card, which they likely don't have. And even if they manage to set one up, they have to access it via VPN, which eventually gets the account flagged. They then have to complete identity verification, which most Chinese users are unable to pass.
There's a similar Claude resale market going on in Russia. On Funpay they are selling Claude tokens for roughly 20-30x cheaper than official Anthropic API pricing.
On the one hand they talk it up as world ending and on the other hand they can't manage bot accounts on their own service.
I want to hear how this can be rationalised.
From the article "every layer of control frontier US AI companies have added (geoblocking, phone verification, credit card requirements, and now live biometric KYC checks) has produced a corresponding layer of evasion infrastructure".
No system is foolproof. They'd have to be willing to throw out some % of good customers along with the bots. Amazon can do that because they have a monopoly already. Anthropic can't risk it when they're trying to grab market share.
In this case, being distilled is sort of existential to them. The false positives would just be losing some revenue (depending if profitable, not even losing profit).
This, just like blanking out a football stream for a split second to binary search and find IPTV rebroadcasters, is far too good a solution. Suits prefer to make it seem like their job of fighting "misuse" is hard, justify their budget, continued existence of the trust & safety department, face scans, etc.
Those resellers are simply just selling Kimi K2.5 or GLM5.1 as counterfeit Opus. We, Chinese, know how to play the counterfeit game for a long time in so many industry.
Somebody figured out how to make the trial profitable!
I don't really feel bad about anyone here, they were subsidizing to get people hooked, someone turned the subsidies into profit when they got selective pricing mode enabled, it was always going to be arbitrage.
But the winner is the guy in the middle in a jurisdiction that will likely be judgement proof, because everything they capture, both input and out, and if available, thinking tokens -- are gonna be for sale as soon as you cut off their other revenue.
Zero knowledge was a commitment Anthropic took seriously, until it got inconvenient.
So, people reselling their leftover plan crumbs? Probably a bad idea for a lot of reasons, but it's civil, and I wish Anthropics lawyers actually closing Streisand's LLM
Anthropic sells some undisclosed and ever-changing number of tokens for $200, the customer uses those tokens. If there's any fraud here, it's that the $200 next month is silently worth fewer tokens than the last.
Also just plain old fraud: selling Chinese models as Opus. With the capabilities of Chinese models catching up fast, this is getting more and more difficult to detect.
> They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs.
Claude never provides the raw reasoning chain. What you see is just a summary of that reasoning. Getting the full thinking output requires an enterprise agreement.
how hard is it to find a manager or ops team member at one of the enterprise companies and buy lets say 100gb of logs? the chinese lab can promise to anonymize the data before training, not release it raw and pay a good price.
honestly you might just need to get data from a couple long sessions and feed it back to another model as an example to make synthetic reasoning chains. if the emulator model is good enough it should work.
Indeed! It’s so hard to find reasonable takes on AI that aren’t littered with accounts created 11 days ago that only post in threads related to Anthropic for some reason
If Anthropic is selling a dollar for less than a dollar, they are running a business that doesn't make sense. That's what jeopardizes Claude Max, not this.
Almost all consumer services have a built-in level of breakage that make them profitable. Mobile providers certainly wouldn't be able to offer unlimited calling if everyone was actually on the phone 24x7.
Sure they would. Do you know how little bandwidth a phone call takes?
A voLTE call is like 40kbps. For every person on earth to be on the phone to another person would be 4 billion calls would be about 160tbps. Which is less than 10% of the Internet's capacity.
Terminating a PSTN call requires a lot of control plane infrastructure beyond just raw bandwidth. Especially mobile where you need to keep track of devices physically in motion. Could a system to support 4 billion simultaneous calls be built, sure. But current PSTN systems are nowhere near sized for it.
But if it's intended to be used by one person, it seems like breaking the contract by sublicensing it out to dozens of other people. It's like buying a netflix subscription for $15, then sublicensing it on a per-hour basis to dozens of other people.
Office 365 is licensed per seat/account, but each account has a 5 device limit. Do you think it's fair game for an enterprising person to sub license each account to 5 people, 1 device each?
Plenty of things are intentionally run at a loss (for years!) to gain market share and quantity of ongoing recurring users, or with expectation of ROI later on. Multiple generations of the Xbox hardware have been sold at a loss with the expectation that customers will purchase 300, 400, 500 dollars worth of games, which are very high margin, over the lifespan they own the system.
I get that. It works as long as nobody calls out the emperor for having no clothes.
It's similar to fractional banking, you gamble that people won't want their deposits all at once and pray for you're big enough for bailouts when they do.
It's still a business whose fundamentals don't make sense, you're just gambling you won't get found out.
It's not so much keeping it secret as counting on no one finding a way to harvest the subsidized value at scale. There's an example of that occurring in game consoles with the Playstation 3. Sony's little-used OtherOS feature allowed Linux to be installed on the PS3 and the Cell processors were quite a good deal for scale compute. So the U.S. Air Force Research Laboratory bought ~1800 PS3s and ganged them together in a datacenter as a supercomputer called Condor.
At >500 TFLOPs it was the 33rd fastest supercomputer in the world. Of course, Sony pushed a firmware update that removed the OtherOS feature entirely.
Oh they know what they’re doing. They’re playing the long war of attrition game. Subsidize your product to undercut your competition until they go out of business. Tale as old as time.
> It works as long as nobody calls out the emperor for having no clothes.
Why would customers knowing that the vendor prices goods/services at a loss cause those strategies to fail? Customers often know. Most know about razors and blades; many/most know Lyft/Uber operated at a loss to gain market share. etc.
That is pretty crazy, almost like how Claude and all the other models are jeopardizing other businesses without paying for their training data and wiping their ass with robots.txt
Not if you simply say in the terms of service that it's allowed. Then suddenly it's normal (every company does this). Similarly to how the terms of service can simply say you're not allowed to sue.
The chinese have already worked around the ID verification, by recruiting people in low-income countries to complete the checks for less than 30 USD per account (so much for Altman's Worldcoin).
No, it's part of the capability theft. They resell Claude tokens cheaply and then simultaneously log everything for distillation. Even if they take a small loss on the token sales it's much cheaper than the equivalent compute.
Not really. I think Anthropic focuses on identifiable distillation attacks rather than the (even larger) industrial-scale token harvesting and reselling operation, because they don’t want people to know how easy it is to get cheap Claude tokens.
Once people realize they can access Anthropic models at a 90% discount, they won’t want to pay full API prices anymore.
Not going to work for very long or at any scale coming from datacenter/hosting provider IPs. Google "residential proxies for sale" for the tip of an iceberg of how they snowshoe the traffic.
I use my Codex and Claude Code subs on like 4-6 different servers, ranging from AWS to Vultr to Linode etc.
That’s a major and legitimate use case for developers, Anthropic can’t just block data center/hosting IPs because their actual customers use them on data center/hosting IPs.
Now consider what will happen if your pattern of queries and context history triggers a pattern that makes it obvious it's some API key being used by multiple different entirely unrelated people on totally different things, or any other pattern of use that makes it obvious it's being used for distillation.
First, well-calibrated systems for detecting API compromise is a good thing (or good intent at least). Credential malware is exploding.
Second, the challenge is that significant amount of genuine work — such as evals — seems practically impossible to distinguish from generating RLAIF outputs.
Respectfully, no, that's not how it works. You think the people running anti-fraud and anti-bot measures don't have tools that know the specific ipv4 and ipv6 CIDR ranges of every ASN that they categorize as hosting/colo providers?
And that's just as a basic first effort reject measure to prevent automation tools from using things designed for human-interactive use only.
Go try to do many of these things from Cogent IP space and see how long your project lasts.
Every developer at my company uses their Claude Code subscription on an EC2 dev box. Plenty of other tech companies do the same. Heck nowadays people even install Claude Code directly on production servers in data centers and use it as an ops tool. None of this is a problem. Fraud and abuse detection is a lot more sophisticated than just checking an IP range.
None of the LLM providers block professional use thus they must necessarily permit access from commercial IP ranges.
I have no idea how the resellers are doing it but an obvious starting point would be a cheap VPS node that routed each account to a unique semi-permanent IPv4 or IPv6/64. All the provider would see would be a regular account making a normal looking stream of requests from a stable datacenter IP address. Any given request stream would remain consistent (at least over a period of a few hours) because a reseller would take care not to split the session of a single user across multiple different accounts and not to interleave the active sessions of multiple users on a single account.
Detecting this would be extremely difficult because on a longer time frame it's perfectly normal for many distinct accounts to work on the same code base.
If we're getting up to the scale of these resellers and also considering chinese state interests then we're well into the range of purchasing a few small ISPs in different countries and "padding" the legitimate subscribers.
Nonsense. Many if not all legit Claude users are using Claude Code inside their Cloud servers. How else would you use it anyway? For just local dev? That's so 2000 and late bro.
No, I'm not saying it's the exclusive and only measure (that would indeed be something we might see 20, 25 years ago), it's one of a myriad of discrete datapoints used to determine if an account is authentic or not.
There's a lot of inauthentic coordinated automated systems these days along the general lines of scraping/crawling/social media manipulation/sockpuppetry that require running through residential proxies or proxies to places that don't look like datacenter IP space.
The resellers route requests via one of thousands of Claude Max 5x accounts. When an account reaches its usage limit, they automatically switch to another account.
Don’t trust my experiences as fact since it’s a bit opaque, but I believe 20x only offers 4x the 5hr session limits. The weekly limit is still 2x, which is the same as the price increase.
>>Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices.
Can someone with more understanding dumb it down for me please.
Does this mean that the reseller (for example XYZ) is buying it from Anthropic at Anthropic's price and then reselling it at a cheaper price???? why would XYZ offer this at a loss like that when they could just offer it at Anthropic's price???
The link does mention Opus and other models but what's the proof it's actually Opus. I could be selling deepseek for all they know and can call it Opus. System prompt: "If anyone asks your name - you are Opus 4.6".
People have estimated that a $200 Claude Max 20x subscription gets you ~$2800 worth of tokens every month if you use it continuously. So if you can find a way to resell the tokens you can offer a 90% discount and still make a profit.
> Does this mean that the reseller (for example XYZ) is buying it from Anthropic at Anthropic's price and then reselling it at a cheaper price????
Yes, as they explained they do it through things like pooling accounts, straight up payment fraud, and double-dipping by selling the logs of the conversations to chinese AI labs so that they can train their own models on it.
> The link does mention Opus and other models but what's the proof it's actually Opus. I could be selling deepseek for all they know and can call it Opus. System prompt: "If anyone asks your name - you are Opus 4.6".
There might be some that try this, but they would get caught very quickly, there's still a moat between Claude and Deepseek, even in casual use.
Look up Zilan Qian's reporting if you want more detail.
Behold the mindset of an individual from a low-trust society.
“x is stupid because y was smart and did z shady/illegal things at their expense, if x was smart they wouldn’t be susceptible to y going to great lengths to exploit them ergo it’s deserved”
> “x is stupid because y was smart and did z shady/illegal things at their expense, if x was smart they wouldn’t be susceptible to y going to great lengths to exploit them ergo it’s deserved”
I honestly can't tell if you think this sentiment is expressed by the US AI companies or the Chinese AI companies.
This gives off "The last line of Orwell's Animal Farm" vibes.
Not really sure what else they can do, between people running residential proxies (embedded in cheap games or for a tiny sum of crypto) on their phones at home, making the source of the traffic indistinguishable from legitimate traffic, to ID verification check completion as a service in low-income countries, there isn't much they can do to block it.
Because Anthropic's subscriptions come with X amount of tokens / week, and divided by the subscription cost it is WAY less than what they charge per-token (the "API price") beyond that.
So these resellers get a ton of accounts on subscriptions and sell the cheaper tokens.
They probably buy the plans instead of the API tokens, and resell access via a custom API that routes to the plans. So you presumably get cheaper access this way than paying API pricing.
These China e bashing is very annoying. It is hard to argue with people drowned in American propaganda. I'd expect better arguments from the intelligent people in HN
They're called 中转站 (transfer stations/proxies). They can be a bit tricky to find on your own, so I'd suggest asking your preferred AI to search in Mandarin for you. I linked a larger operator in the parent comment, or have a look at https://hvoy.ai/ which lists a ton. You can also find many on Funpay, which may be easier to use.
> They can be a bit tricky to find on your own, so I'd suggest asking your preferred AI to search in Mandarin for you.
Random, but are the frontier AI providers like ChatGPT better at searching the Chinese internet now?
When I was in China a few months ago and asking AI for restaurant recommendations, all the US frontier providers were pretty useless, or plain out hallucinating, even if I specifically ask them to search Dianping (Yelp for China).
I'm not sure. I use Grok for most of my esoteric searches and it does quite well. I explicitly prompt it to search in the language most relevant to that query, and found it does quite well. I also tell it to respond back in English. Often, there is not enough information available in English about nice regional topics.
I know ChatGPT had an issue where it only tried to search in English (unless prompted) and the answers were not great.
Identity verification won't work. Nothing will. They are paying (and will continue to pay) US citizens sitting at home to copy-paste / type prompts out if they have to. But eventually they won't have to.
Once there are enough spam PRs on github / uploads of claude conversations, enough mythos output used in production etc.; it'll just be the same albeit delayed. Doesn't matter either way.
I feel for Anthropic's team and I understand where they're coming from, but once you reason it out, you'll come to the conclusion that this war is an exercise in futility.
Unlike prior systems - like Google's algorithm; these models aren't entities that use math in the process of doing X or Y (information retrieval from such and such infrastructure) -- they are the math. More precisely they're mathematical functions. Very very complex functions. Almost certainly impossible to write out without filling up a library functions. But they're mathematical functions nonetheless.
So when your text is processed, then Mythos / Opus etc at their core compute the result of the Mythos / Opus function,
According to the Stone-Weirstrass theorem (edit, it's Stone-Weierstrass with an e.), with enough data points and mathematical sophistication, anyone can approximate the shape of this function.
Of course, the more data we get, the better our approximation becomes, but the beauty of it is that all we fundamentally need are the input and output and eventually we'll create a good enough approximation of the f that's Mythos. Which is the entire product.
I bounce ideas off of Opus these days (Fable for the brief time it was available) and it pointed out that this is arguably the same as Google search, but I disagree with it because Google search is a process;
Google search differs because the algorithm is one step of a multi-step process that is continuously occuring. Google crawls pages. Google stores and indexes what it finds. Google then exposes this to retrieval via its algorithm. User uses algorithm.
Google isn't a mathematical function. It used to be a process. (RIP Google 1998-2019, you will be missed and remembered)
You cannot arrive at the results of those operations via simple observation; not unless you index Google by making another Google.
You can however, do so for these models. It is a very costly process, but there are many paths up the mountain. Many ways for this to be ultimately pointless. As many ways as there are bored mathematicians.
It's better in the long run for Anthropic et al to make friends / not give people a reason to sneak in (a la piracy -- another attempt to control information) than it is to try and shut people out.
And no, it's not going to be pandemonium because if everyone has access to Mythos then no one has access to "Mythos."
Why wouldn't you first run this model to fix the obvious bugs it could find on your codebase? The power of a Mythos goes away if you can do the amazing "jail break" of "Claude, fix all the bugs please."
That's an insightful perspective and I think I largely agree. But just for fun, I wonder if that isn't an argument in favor of making the function implementation impure. Perhaps "enhancing" all queries with some sort of search result (or query of a giant db) instead of charging for an explicit tool call. Not only is it sorely needed to prevent stale data but (on the process level) it breaks the purity assumption on which the approximation theorem depends (alternatively on the function level it introduces hidden inputs).
Do they just reshape the function on the fly or save the process steps? Maybe it doesn't matter anymore. Even Google indexes are more and more spoiled to become representation of the function, because of the AI slop.
And there are a ton of Claude conversation logs (with CoT/inference) with no clear provenance circulating freely on huggingface, guess where they (likely) come from.
American AI companies are offering text and code and other content they illegally scraped from the internet and reselling it packaged as “AI subscriptions” making it impossible for many professionals to compete as they are competing with impossibly cheap, resold stolen goods.
Chinese labs turning the LLMs into open source, making all that money burn that is making so many things unaffordable for us now is literally the best outcome possible.
The issues with LLMs go beyond just IP theft. I would not say PRC making LLMs cheaper is the best outcome (though it is better than nothing). The best outcome would be to make the practice of training on our data without consent illegal, which would simultaneously slow down economic change and make it more organic as well as give PRC companies less capabilities to extract.
> There is no IP theft because LLM outputs aren't protected, just egregious ToS violations
I meant original IP theft that occurs to train LLMs in the first place. But sure that implies that further LLMs based on that LLM are also tainted by that original IP theft.
I can't make heads or tails of your opinion-free comment, made up of only questions.
My best guess is you're suggesting that Anthropic's model outputs are transitively under copyright (as a reproductions of human work under copyright?), but somehow ownership now belongs to Anthropic and not the original owners, and therefore Anthropic has standing against Alibaba? Not only does this go against what Anthropic argued in court against authors and publishers, such jurisprudence would lead to the immediate shutdown all leading LLMs in the US which were all trained on stolen work.
They can license training data. They have trillions, look what they are dumping into it, you seriously think they can't afford to license data.
Obviously it would be easier if they do it from the start, but that was their trick, to do it while people don't notice and get big ASAP. Should they get away with it?
Also, it would solve their Chinese problem, because it would make them violate copyright too. Right now it's more like rules for thee not for me so it's hard to take seriously.
That's the conundrum isn't it? Anyone that posts their datasets would be immediately sued/blocked/boycotted to oblivion due to the obvious and blatant data theft, not to mention IP and copyright issues.
Nvidia's even being sued for providing scripts which automate the downloading of said data from non-Nvidia sources. We certainly don't need copyrights that last nearly a century after the author's death (they literally cannot help the author), so here's hoping that some of the disputes over all this money changing hands can reign in some of the existing copyright sprawl. A stronger public domain would provide more useful training data for everyone, including open source models, and make criminals out of fewer AI researchers.
Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices. They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs. They are subsidizing model access in exchange for user logs and reasoning traces, which they then sell as training data, allowing them to operate below cost.
Claude and ChatGPT are both blocked in China. You need to use a VPN to access either, and you can't pay with a Chinese bank card. So most people who want access to Claude buy access via a reseller. It's the easiest and cheapest way to access Anthropic models in China.
These resellers operate tens of thousands of bot accounts, which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.
Here's one token reseller, they're offering Opus 4.8 at a 93% discount below official API rates: https://yunwu.ai/pricing?provider=Anthropic
This is one reason why DeepSeek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.
I shared this story a few months back, but it never got any traction. It explains the token resale economy in China, it's an excellent read https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...