I think the justification for most AI price increases should go without saying - they were losing money at the old price, and they're probably still losing money at the new price, but it's creeping up towards the break-even point.
Customers don’t decide the acceptable price based on the company’s cost structure. If two equivalent cars were priced $30k apart, you wouldn’t say “well, it seems like a lot but they did have unusual losses last year and stupidly locked themselves in to that steel agreement”. You’d just buy the less expensive one that meets the same needs.
(Almost) all producing is based I value. If the customer perceives the price fair for the value received, they’ll pay. If not, not. There are only “justifications” for a price increase: 1) it was an incredibly good deal at the lower price and remains a good deal at the higher price, and 2) substantially more value has been added, making it worth the higher price.
Cost structure and company economics may dictate price increases, but customers do not and should not care one whit about that stuff. All that matters is if the value is there at the new price.
That’s an odd way to defend the decision. “It doesn’t make sense because nothing has to make sense”. Sure, but it would be more interesting if you had any evidence that they decided to simply do away with any logical premise for the 4 moniker.
It does make sense. The companies are expected to exponentially improve LLMs, and the increasing versions are catering to the enthusiast crowd who just need a number to go up to lose their mind over how all jobs are over and AGI is coming this year.
But there's less and less room to improve LLMs and there are currently no known new scaling vectors (size and reasoning have already been largely exhausted), so the improvement from version to version is decreasing. But I assure you, the people at Anthropic worked their asses off, neglecting their families and sleep and they want to show something for their efforts.
It makes sense, just not the sense that some people want.
I feel like a company doesn’t have to justify a version increment. They should justify price increases.
If you get hyped and have expectations for a number then I’m comfortable saying that’s on you.