Comment by dingnuts
6 days ago
> Just the ability to speed up exploration and validation based on what a human tells it to do is already enormously useful, depending on how much you can speed up those things, and how accurate it can be.
The big question is: is it useful enough to justify the cost when the VC subsidies go away?
My phone recently offered me Gemini "now for free" and I thought "free for now, you mean. I better not get used to that. They should be required to call it a free trial."
Inference is actually quite cheap. Like, a highly competitive LLM can cost 1/25th of a search query. And it is not due to inference being subsidized by VC money.
It's also getting cheaper all the time. Something like 1000x cheaper in the last two years at the same quality level, and there's not yet any sign of a plateau.
So it'd be quite surprising if the only long-term business model turned out to be subscriptions.
Can you link to any sources that support your claim?
Sure. Here's something I'd written on the subject that I'd left lying in my drafts folder for a month, but I've now published just for you :)
https://www.snellman.net/blog/archive/2025-06-02-llms-are-ch...
It has links to public sources on the pricing of both LLMs and search, and explains why the low inference prices can't be due the inference being subsidized. (And while there are other possible explanations, it includes a calculator for what the compound impact of all of those possible explanations could be.)
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> The big question is: is it useful enough to justify the cost when the VC subsidies go away?
I won't claim local LLMs as nearly as good as various top models behind paid subscriptions/APIs, but I'm certain I'd be able find a way (for me) of working with them well enough, if the entire paid/hosted ecosystem disappeared over night. Even with models released today.
I think the VC subsidies probably "make stuff happen" faster, and without it we'd see slower progress, but I don't think 100% of the ecosystem would disappear even if 100% of VC funding disappeared. We're bound for another AI winter at one point, and some will surely survive even that :)