alt Hacker NewsThis field is highly competitive. Much more than I expected it to. I thought the barrier to entry was so high, only big tech could seriously join the race, because of costs, or training data etc.
But there's fierce competition by new or small players (deepseek, Mistral etc), many even open source. And Icm convinced they'll keep the prices low.
A company like openai can only increase subscriptions x10 when they've locked in enough clients, have a monopoly or oligopoly, or their switching costs are multitudes of that.
So currently the irony seems to be that the larger the AI company, the more loss they're running at. Size seems to have a negative impact on business. But the smaller operators also prevent companies from raising prices to levels at which they make money.
There's no way around the cost of electricity, at least in the short term. Nobody has come up with a way to meaningfully scale capacity without scaling parameter count (≈energy use). Everybody seems to agree that the newest Claudes are the only coding models capable of some actually semi-challenging tasks, and even those are prone to all the usual failure modes and require huge amounts of handholding. No smaller models seem to get even close.