Comment by jdiff
6 months ago
Massive, organic, and unprofitable. And as soon as it's no longer free, as soon as the VC funding can no longer sustain it, an enormous fraction of usage and users will all evaporate.
The Segway always had a high barrier to entry. Currently for ChatGPT you don't even need an account, and everyone already has a Google account.
This is wrong because LLMs are cheap enough to run profitably on ads alone (search style or banner ad style) for over 2 years now. And they are getting cheaper over time for the same quality.
It is even cheaper to serve an LLM answer than call a web search API!
Zero chance all the users evaporate unless something much better comes along, or the tech is banned, etc...
> LLMs are cheap enough to run profitably on ads alone
> It is even cheaper to serve an LLM answer than call a web search API
These, uhhhh, these are some rather extraordinary claims. Got some extraordinary evidence to go along with them?
I've operated a top ~20 LLM service for over 2 years, very comfortably profitably with ads. As for the pure costs you can measure the cost of getting an LLM answer from say, OpenAI, and the equivalent search query from Bing/Google/Exa will cost over 10x more...
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https://www.snellman.net/blog/archive/2025-06-02-llms-are-ch..., also note the "objections" section
Anecdotally thanks to hardware advancements the locally-run AI software I develop has gotten more than 100x faster in the past year thanks to Moore's law
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The free tiers might be tough to sustain, but it’s hard to imagine that they are that problematic for OpenAI et al. GPUs will become cheaper, and smaller/faster models will reach the same level of capability.
[citation needed]
Eh, I kinda see what they're saying. They haven't become cheaper at all, but GPUs have increased in performance, and the amount of performance you get for each dollar spent has increased.
Relative to its siblings, things have gotten worse. A GTX 970 could hit 60% of the performance of the full Titan X at 35% of the price. A 5070 hits 40% of a full 5090 for 27% of the price. That's overall less series-relative performance you're getting, for an overall increased price, by about $100 when adjusting for inflation.
But if you have a fixed performance baseline you need to hit, as long as tech gets improving, things will eventually be cheaper for that baseline. As long as you aren't also trying to improve in a way that moves the baseline up. Which so far has been the only consistent MO of the AI industry.