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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It's something that literally exists as a first-party plugin for VSCode. The Copilot Chat extension has an Agent mode for vibe coding for half the price of Cursor.
Cursor has cursor agent.
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You disrupt the market and wait until someone buy you out for huge woads of cash
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I didn't say they couldn't be resold, they simply won't have as wide a potential user market like an generic GPU would. But think about it for a sec, you've got thousands of AI dedicated gpu's going stale whenever a datacenter gets overhauled or a datacenter goes bust.
that's gonna put a lot more product on the market that other datacenters aren't going to touch - no one puts used hardware in their racks - so who's gonna gobble up all this stuff?
not the gamers. who else needs this kind of stuff?
I'm not sure that they're even going to be useful for gamers. Datacenter GPUs require a substantial external cooling solution to stop them from just melting. Believe NVidia's new stuff is liquid-only, so even if you've got an HVAC next to your l33t gaming PC, that won't be sufficient.
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Cursor has cursor agent.
Copilot has Copilot coding agent too (as distinct from Agent mode in Copilot Chat. Yes, they're different things and yes, I had to look up what the difference was)
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Copilot has Copilot coding agent too (as distinct from Agent mode in Copilot Chat. Yes, they're different things and yes, I had to look up what the difference was)
Is copilot agent consume based or flat priced?
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In capitalism, everything is a bubble, even capitalism itself. The AI one is going to burst at some point. Then AI becomes a normal thing in the background like everything else we have gone through in this dumbass of a timeline.
Selling grain for coal, coal for iron and iron for paper is capitalism, but not a bubble.
Whether it becomes a normal thing depends on the cost.
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I'm skeptical of AI coding as it exists today, and while I'm bullish on long-term prospects for AI writing software, am very dubious that simply using LLMs is going to be the answer.
However.
Startups typically do lose money. They'll burn money as they acquire a userbase --- their growth phase --- and transition to profitability later. I don't think "startups in area X tend to be losing money" is terribly surprising.
The issue is mostly energy costs though. Startups do lose money; to hiring new people, marketing, etc... But in this case the entire business case loses money a the moment, and without any significant breakthroughs they likely will keep losing money like that.
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first truly positive use for ai
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I'm not sure that they're even going to be useful for gamers. Datacenter GPUs require a substantial external cooling solution to stop them from just melting. Believe NVidia's new stuff is liquid-only, so even if you've got an HVAC next to your l33t gaming PC, that won't be sufficient.
not just those constraints, good luck getting a fucking video signal out of 'em when they literally don't have hdmi/dp or any other connectors.
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Yep it's blitzscaling. Run it at a loss until it's a necessity, then charge whatever the hell you want.
They're blitzscaling our right to intellectual property and our right to work.blitzscaling
TIL there's a word for it. Thanks
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Yep it's blitzscaling. Run it at a loss until it's a necessity, then charge whatever the hell you want.
They're blitzscaling our right to intellectual property and our right to work.How does it impact your right to work?
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I'm skeptical of AI coding as it exists today, and while I'm bullish on long-term prospects for AI writing software, am very dubious that simply using LLMs is going to be the answer.
However.
Startups typically do lose money. They'll burn money as they acquire a userbase --- their growth phase --- and transition to profitability later. I don't think "startups in area X tend to be losing money" is terribly surprising.
Ed Ziltron has a good piece regarding whether the losses are “just another startup” or something more. I am very much leaning towards “burning money at an insane rate just to give the impression of growth”.
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Yes, it does, but at the price needed to make it profitable, it’s not desirable.
LLMs are not useless; they serve a purpose. They just are nowhere near as clever as we expect them to be based on calling them AI. However, body is investing billions for an email writing assistant.
Price is essentially zero if you just run it locally
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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.
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Good. Costs is the key point to get rid of it.
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That’s the usual business plan. However, people don’t really like ai. The results aren’t great, so, if they jack up the price, people will likely cancel. The lock in is poor as the product and convenience is poor. It doesn’t really save money as promised.
If people dont like ai, why do all of my coworkers and family members constantly reference ai?
Seriously, yall mfs here on lemmy have the strangest social media bubbles.
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If people dont like ai, why do all of my coworkers and family members constantly reference ai?
Seriously, yall mfs here on lemmy have the strangest social media bubbles.
Lemmy us pretty much all is use right now. I don't know anyone espousing a. I.
It ain't a social media bubble.
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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.
after crypto, and Now AI, they will be chasing whatever faux tech that comes out next.
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A lot of startups whose entire business model relies on OpenAI's small model API calls costing under $1/Mtok, are going to go bust when OpenAI finally runs out of money and ramps the cost up tenfold.
ive seen a ton of billboards of startup AI comp in west coast, i assume every new one that appears on these billboards, the old ones go under.
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yeah secondary knockon effects - once nvidia realizes it's not going to actually sell 5 gpus per human being, the datacenters for them evaporate, then the power production to feed those datacenters becomes pointless....
an effective administration would mandate all renewable energy for this purpose, so when it implodes they could at least derive a benefit from the expanded production... but no, trump will have them build coal plants for it all. or like grok, methane powered generators fml
and they are even considering extremely expensive nuclear plants to power them.