Comment by xmodem
5 days ago
Further, Cursor might cost $20/month today, but to what degree is that subsidized by VC investment? All the information we have points to frontier models just not being profitable to run at those types of prices, and those investors are going to want a return at some point.
the market will indeed balance this out. remember when a taxi was $20 and an uber $5? now an uber is $25. nobody is going to go back to humans with all their wet meat sack problems, we will get more value for it, but it aint gona stay $5 if those putting up all this capital have anything to do with it. then again, we might get cheap, self hostable local copies (unless theyre made illegal for "safety" or some bullshit)
I think the most likely thing is the cheap self hostable copies will broadly stop improving significantly. It'll be too costly for a community project to distill a bleeding edge cloud model and companies will stop releasing them. What's free now will remain free, we might even get another gen or 2 of improvements (possibly with diminishing returns) on free/cheap local models but those days are numbered.
What's the force that you see keeping those days numbered? Many ollama models are runnable on a local laptop, and models like deepseek even more so. Aside from open source interest, there are many large state and corporate actors who would like to see models commoditized.
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sounds like uber is ripe for disruption by somebody who doesn’t need the accounts to balance yet
I dunno, with the advances in open source models I could see in a few years having AI workstations that cost $20,000 with 1TB of VRAM so you don’t have to rely on OpenAI or Cursor. The RTX 6000 Pro is only $7500 and has 96GB of VRAM.