It should be obvious that these services are operating at a loss. The monthly subscriptions especially, but I’m even skeptical that the linear API pricing is sustainable. It feels like a classic “drug dealer” model to me. Get everyone hooked with cheap access, then raise prices later. Unless there’s a major breakthrough in the underlying technology, I don’t see how a significant price increase isn’t inevitable once a…
Did people learn nothing from the rise, stall, and now fall of social networks? Yes, AI can do some incredible things. But we’re also running full speed into an ecosystem controlled by 2 or 3 major companies. Running at a loss. A reality check is coming. It’s not a technology problem. It’s an economic problem. People are too busy looking at the tech to notice.
We aren't, though. They think we are :-/
The reality is that tokens are the second-lowest value link in the AI value-chain (the lowest-value item being electricity).
These providers are operating low down in the value chain; they are trying to sell a fungible, easy replaceable and (if hardware price trends is any indication) easily self-hostable.
They have no secret sauce, no moat. If they jack up the prices, their users will simply move to the next provider, and repeat ad nauseum as long as VCs want to subsidise in the hope of a landgrab.