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Is AI Model Routing Already Being Commoditized?
At 14:55 · chapter starts 14:47
With competitors like RAMP and others releasing routing features, Harry challenges Alex on whether the routing layer is commoditizing. Alex's response is sharp: most of these companies are building routers because it's fashionable, not because it's their core mission. [1] — Alex Atallah "Everyone is building a router because it's fashionable. But a router built as a side quest is months behind one built with 100% focus. And …" 14:48 That mental model — playing to exist rather than playing to win — puts them months behind from day one. More importantly, partial or siloed routing products reduce user leverage by limiting model access and flexibility, which runs counter to the entire value proposition. The pricing discussion that follows is equally instructive: OpenRouter's 5.5% take rate on pay-as-you-go plans worried Harry, who predicted that fast-scaling enterprises would eventually baulk at the cost. Alex acknowledges this and reveals the company has already introduced a committed-spend enterprise plan with no marginal fee, and will soon launch a self-serve business tier.
Everyone is building a router because it's fashionable. But a router built as a side quest is months behind one built with 100% focus. And worse, partial routers reduce user leverage by limiting model access and flexibility.
OpenRouter charges a 5.5% take rate on its pay-as-you-go plan, with a separate enterprise plan based on committed spend with no additional fee.
The overall AI inference market has been growing 10 to 15x per year, and OpenRouter's revenue is expected to continue being dominated by unplanned inference capacity needs.
Token prices have fallen approximately 90% over the last 18 months, raising questions about whether lower prices help or hurt OpenRouter's revenue model.
