At the moment, every AI service is dealing with capacity issues. Demand is much bigger than supply.
As long as that remains true, don't see how this bubble will be popped
As long as that remains true, don't see how this bubble will be popped
I don’t really have a strong preference, so I just use any service where I’m currently not rate limited. There are many of them and I don’t see much difference between them for day to day use. My company pays for Cursor but I burned through my monthly quota in a day working on a proof of concept that mirrored their SDK in a different language. Was it nice that I could develop a proof of concept? Yes. Would I pay 500 dollars for it from my own pocket? No, I don’t think so.
It’s like those extremely cheap food and grocery delivery apps, they made their food cheap, no delivery fees for a while… of course everyone was using it. Then, they started to run out of VC money, they had to raise prices, then suddenly nobody used them anymore and they went bankrupt. There was demand, but only because of the suppressed prices fueled by VC money.
It doesn’t cover the free users, but that’s normal startup strategy. They are using investor cash to grow as quickly as possible. This involves providing as much free service as they can afford so that some of those free users convert to paid customers. At any point they can decide not to give so much free service away to rebalance in favour of profitability over growth. The cost of inference is plummeting, so it’s getting cheaper to service those free users all the time.
> It’s like those extremely cheap food and grocery delivery apps, they made their food cheap, no delivery fees for a while… […] they started to run out of VC money, they had to raise prices
That’s not the same situation because that makes the product more expensive for the customers, which will hit sales. This isn’t the same as cutting back on a free tier, because in that situation you’re not doing anything to harm your customers’ service.
I have spoken with many companies and nearly all of them, when speaking about AI, have gotten to the point they don't even make any sense. A common theme is 'we need' AI, but nobody can articulate 'why' and in-fact they get defensive when questioned. It is almost perfectly parallel to the 'we need blockchain' argument or 'we need a mobile app'. That isn't to say those are not useful technologies, but the rapid rise, steep decline, then gradual rise is a theme in tech.
Others have observed and pointed out his prescience before:
That's what everybody was saying in February 2000.
Fortunately, this time around, I have a partner who is gainfully employed and has valuable skills that could be used in other companies. I am somewhat successful at consulting, plus a small pension. So the chances of going completely bankrupt are small, but not zero.
But oh fuck, I am having nightmares.
I was college age at the time, but yeah, this is how I recall it feeling.
There's seemingly a universal malaise around that comes up even in casual conversations.
Seemingly everyone is looking for a job with no success, every third story is about some sort of layoffs, and now even the press is starting to discuss the housing bubble.
I've been waiting for the proverbial other shoe to drop for some time now. Clearly, something's gotta give and the cracks are getting too large to ignore now.
Capacity just means there is currently more demand than supply and that might be a number of negative factors driving that: users with no ROI (free users), too rapid growth, poor efficiency etc etc.
Teachers are demanding not to do the work that is teaching. Lawyers are demanding not to do the work of lawyering. Engineers don't want to do coding and leaders don't want to steer the ship anymore unless it's towards AI.
Alllll the "value" is bullshit. Either AGI arrives and all jobs are over and it's eternal orgy time, or at some point the lazy ai-using losers will get fired and everyone else will go back to doing work like usual
Eternal orgy time is not possible, will never happen. And if AI is useful, which it is, it will never be abandoned. Somewhere in the middle is the real prognosis
It may "balance" around the middle, and expect it to be noticably different than now, even without much of an actual middle.
Or the middle could end up being just another group, maybe or maybe not the most prominent one.
Make teachers great again.