Techcrunch reports that AI coding tools have "very negative" gross margins. In other words, they are losing money on every user.
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Exclusive: The high costs and thin margins threatening AI coding startups
Coding assistant startups are highly unprofitable, says a source familiar with Windsurf financials.
TechCrunch (techcrunch.com)
Man I cannot fucking wait until this stupid goddamn bubble pops
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I don't think they're gaining any market share, especially after the Chinese produced nearly identical services.
If anything, a smaller market share is better for business. The more users they have the faster they lose money.
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Man I cannot fucking wait until this stupid goddamn bubble pops
Me too. I can then go back to 3D printing quantum blockchains out of room temperature superconductors in my private space station with Katy Perry.
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in this case there isnt customer base for AI, only ceo and c-suites are.
There is a lot of top down shit, but there is definitely bunch non c-suite enterprise customers out there. A lot of product managers are curious about this shit.
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So much of the AI stuff we see today are boards reacting and worrying about being "left behind" in AI. In many cases, the goal is not to deliver value. The goal is to be able to attach a little sticker that says "AI" to their products to excite the shareholders.
Unfortunately in this case, some of the largest companies in the world haven't been able to figure out how to run AI services at a profit.
This could change any day if some more efficient hardware arrives, but until then, most of the software world is just crossing their fingers it becomes profitable one day while they light dollar bills on fire in their datacenters.
If this isn't "bubbleish" behavior I don't know what is.
I was in a local bike store looking at red tail lights yesterday.
One brand Lezyne had several versions. There was an "AI Alert" one. I looked it up and it just has a sensor to detect when you brake and it changes to a different flashing mode at that time.
Thats barely even "smart" let alone "AI".
The stupid thing is, because of this dumb claim they needed to confirm that it doesn't collect and transmit any data about your riding habits. Its a light with no connectivity other than a charging port.
The dumbfuckery is astonishing.
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This post did not contain any content.
Exclusive: The high costs and thin margins threatening AI coding startups
Coding assistant startups are highly unprofitable, says a source familiar with Windsurf financials.
TechCrunch (techcrunch.com)
So what I am learning is that I should start vibe coding even the small scripts that are less than 10 lines.
Done. I will start doing that.
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I'd suspect the low "density" of context makes it prone to hallucinations. You need to load in 3000 lines to express what Python does in 3, so there's a lot of chances to guess the next token wtong.
I was gonna say that, probably the higher the abstraction level the best it is for LLMs to reason about the code, because once learned it’s less tokens.
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If anything, a smaller market share is better for business. The more users they have the faster they lose money.
Nobody asked
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Me too. I can then go back to 3D printing quantum blockchains out of room temperature superconductors in my private space station with Katy Perry.
I find that hard to believe right up until the point you mentioned Katy.
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I find that hard to believe right up until the point you mentioned Katy.
If she's good enough for Justin, she's good enough for me.
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Man I cannot fucking wait until this stupid goddamn bubble pops
Im so tired of this stupud fucking refrain. Cause we all know how housing got so mich better after 08 and how we dont have any more dot coms and how the internet got so much better since that bubble. You people have no idea what your even asking for.
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Yes, this is part of the business model. The goal is to get everyone addicted to their service, then jack the price up to profitable margins. It's the same model Netflix and Amazon used. Bothe services lost money for over 10 years before becoming profitable.
YouTube as well.
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Isn't this just the tech industry. Run at a loss. Eat VC money. Wait. Wait.
Some how you become normalized and suddenly important Next thing you know you're raking profit.
Like the guy that has no friends who nobody really likes. He won't go away. He just sticks around. Nobody ever told him to fuck off. So he's just part of the group.
Yep, and they were helped a lot after the 2008 financial crisis when interest rates were dropped super low and loans were cheap. That's a major reason why the market has been screaming for the fed to cut the interest rate as much as possible.
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Im so tired of this stupud fucking refrain. Cause we all know how housing got so mich better after 08 and how we dont have any more dot coms and how the internet got so much better since that bubble. You people have no idea what your even asking for.
I'm gonna be ready this time, I can feel it. THIS will be the crisis from which I emerge on top. I switched to a bidet last year so there's no need to stockpile toilet paper. I've got all my tendies and match ammo in the basement ready to boogaloo, and I've got puts on SPY in the tube for when it starts to look shaky.
No idea where this train is going but I'm full steam ahead and loaded for bear. A cocaine-bear. -
Do any of them like it enough to pay for it? The figures say no.
I use it daily but I won't subscribe. It's like news. Why pay when you can get it for free. (I do subscribe to news outlets, though, but like ai subscriptions, I know I'm in the minority).
There is a specialised ai tool that is useful at my work. It's got a free tier which does most of the functions and the next tier up is crazy expensive on a per user basis for the amount of time it saves. If there was a reasonable subscription, perhaps I'd subscribe but I assume that a reasonable subscription doesn't cover costs, so they'd rather a free user to pump their numbers than lose a subscriber. That yells me it will enshottify over time or they hope that the cost will drop. The problem is that if the cost to host drops a lot, people will self host instead. It's a rock and a hard place, without a sustainable business model.
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