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Comment by throwout4110 | Hacker News Reader

What would you imagine a plausible scenario would possibly be that your tools would be taken away or “collapse in functionality”? I would say Claude right now has probably made worse code and wasted time than if I had coded things myself, but it’s because this is like the first few hundred days of this. Open weight models are also worse but they will never go away and improve steadily as well. I am all for people doing whatever works for them I just don’t get the negativity or the skepticism when you look at the progress over what has been almost zero time. It’s crappy now in many respects but it’s like saying “my car is slow” in the one millisecond after I floor the gas pedal

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> What would you imagine a plausible scenario would possibly be that your tools would be taken away or “collapse in functionality”?

Simple. The company providing the tool needs actual earning suddenly. Therefore, they need to raise the prices. They also need users to spend more tokens, so they will make the tool respond in a way that requires more refinement. After all, the latter is exactly what happened with google search.

At this point, that is pretty normal software cycle - try to attract crowd by being free or cheap, then lock features behind paywall. Then simultaneously raise prices more and more while making the product worst.

This literally NEEDS to happen, because these companies do not have any other path to profitability. So, it will happen at some point.

Sure but you’re forgetting that competition exists. If anthropic investors suddenly say “enough” and demand positive cash flow it wouldn’t be that hard, everyone is capturing users for flywheels and capex for model improvements because if they don’t they will be guaranteed to lose.

It’s going to definitely be crappy, remember Google in 2003 with relevant results and no endless SEO , or Amazon reviews being reliable, or Uber being simple and cheap, etc. once growth phase ends monetization begins and experience declines but this is guard railed by the fact that there are many players.

Comsidering what I described is how tech companies actually function and functioned in the past, theoretical competition wont help.

They are competing themselves into massive unprofitability. Eventually they will die or do the above in cooperation. Maybe there will bw minor snandal about it, but that sort of collution is not prosecuted or seriously investigated if done by big companies.

So, it will happen exactly as it always happens with tech.

My understanding is that all the big AI companies are currently offering services at a loss, doing the classic Silicon Valley playbook of burning investor cache to get big, and then hope to make a profit later. So any service you depend on could crash out of the race, and if one emerges as a victorious monopoly and you rely on them, they can charge you almost whatever they like.

To my mind, the 'only just started' argument is wearing off. It's software, it moves fast anyway, and all the giants of the tech world have been feverishly throwing money at AI for the last couple of years. I don't buy that we're still just at the beginning of some huge exponential improvement.

My understanding is they make a loss overall due to the spending on training new models, that the API costs are profit making if considered in isolation. That said, this is based on guestimates based on hosting costs of open-weight models, owing to a lack of financial transparancey everywhere for the secret-weights models.

> that the API costs are profit making if considered in isolation.

no, they are currently losing money on inference too

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