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Techcrunch reports that AI coding tools have "very negative" gross margins. In other words, they are losing money on every user. (techcrunch.com)
submitted 1 year ago* by to c/technology@lemmy.world
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[–] 29 points 1 year ago (3 children)

A lot of startups whose entire business model relies on OpenAI's small model API calls costing under $1/Mtok, are going to go bust when OpenAI finally runs out of money and ramps the cost up tenfold.

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  • [–] 18 points 1 year ago (1 child)

    good point, it's all been artificially priced to get users onboard then dedicated.

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  • [–] 14 points 1 year ago (2 children)

    Yep it's blitzscaling. Run it at a loss until it's a necessity, then charge whatever the hell you want. They're blitzscaling our right to intellectual property and our right to work.

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