Something that's been on my mind recently - what if gen AI coding tools are ultimately attention casinos in the same way social media is? You burn through tons of tokens and you pay per token, it feels productive and engaging, but ultimately the more you try and fail, the more money the vendor makes. Their expressed (though perhaps not stated) economic goal may be to keep you in the "goldilocks zone" of making enough progress to not give up, but not so much progress that you 1-shot to the end state without issues.
I'm not saying that they can actually do that per sé; switching costs are so low that if you are doing worse than an existing competitor, you'd lose that volume. Nor am I saying they are deliberately bilking folks -- I think it would be hard to do that without folks cottoning on.
But, I did see an interesting thread on Twitter that had me pondering [1]. Basically, Claude Code experimented with RAG approaches over the simple iterative grep that they now use. The RAG approach was brittle and hard to get right in their words, and just brute forcing it with grep was easier to use effectively. But Cursor took the other approach to make semantic searching work for them, which made me wonder about the intrinsic token economics for both firms. Cursor is incentivized to minimize token usage to increase spread from their fixed seat pricing. But for Claude, iterative grep bloating token usage doesn't harm them and in fact increases gross tokens purchased, so there is no incentive to find a better approach.
I am sure there are many instances of this out there, but it does make me inclined to wonder if it will be economic incentives rather than technical limitations that eventually put an upper limit on closed weight LLM vendors like OpenAI and Claude. Too early to tell for now, IMO.
[1] https://x.com/antoine_chaffin/status/2018069651532787936