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Comment by ryandvm | Hacker News Reader

I disagree. We are currently in a weird period where these frontier AI companies are losing tons of money even on the subscription-based AI models. It's just too compute intensive and there's no way most people are going to be buying the kind of hardware required to run $20 worth of inference every day.

Sadly - it's going to be ads. Advertising is going to get in there and enshittify the whole thing because as always, advertising income is too easy and too plentiful for any company to resist.

Right now the models are fairly agnostic, but we are a hair-breadth away from ChatGPT responding with, "the right tool for this job is a circular saw - something like the Milwaulkee M18, which happens to be on sale at Home Depot this weekend."

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Most people are running a whole lot less than $20's worth of tokens per day on cloud platforms. (Is that assuming a frontier model? 1M output tokens per day?) Local hardware could easily take up that workload, at least the part of it that's non-time-critical.

$20/day x 250 days per year x # devs/agents/etc = $$$. About $5k per dev at that daily use case.

Enough to validate repurposing an existing workstation with enough RAM, or finding a used high VRAM GPU, or in my case buying a Strix Halo system for home lab and local models.

The future is once again not cloud based, for AI tools.

The advertising future looks like that to me, too. Service proxies like OpenRouter might talk about price optimization, maybe some ad filtering. But I expect proxies will have malicious entries, too, surreptitiously altering agentic prompts.

Ads are usually the workaround where you don’t deliver enough value to get people to subscribe or payments are unavailable for some reason.

It makes sense to show some ads and get some money at low volume (like a faraway reader wanting to read a story in your local newspaper) but taking money from regular users directly will pay much more.

Newspapers are happy to cannibalize 99% of their ad revenue with a paywall if that 1% subscribes because that’s how much more money you make from someone paying $10-$20/month vs ads.

But yeah, if people use it as a buying recommendation engine, that’s where the money is on ads/referrals but a lot of AI use has little/no connection to buying intent touchpoints.

Newspapers had no choice after craigslist and later Google/Facebook took all their classified revenue.

LLMs may or may not be able to cover their costs with it. We'll see - I suspect product placement as recommendations will become a thing as it won't take as much GPU to give a "recommendation" on "the best widget for X". I firmly expect it to become enshittified the same way google and amazon search has.

And that's if LLMs don't become commodified.

For agentic services, how would you be able to tell that you’ve been product-placed?

Hidden advertising is illegal in most jurisdictions, so it has to be indicated to the user for each specific occurrence and hence be trackable anyway.

"AI can make mistakes. Responses include sponsored content or weights."

Now it's compliant with the law.

That’s not how the current laws generally work.

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