Comment by piva00
2 days ago
> The AI, meaning LLM, infrastructure picture is very blurred because of so many companies running at a loss - which I think should be illegal because long term I think it is misleading consumers.
In a sense it is illegal, even though the whole tech scene has been doing it for decades, price dumping is an illegal practice and I still don't understand why it has never been considered as such with tech.
Most startups with VC investors work only through price dumping, most unicorns came to be from this bullshit practice...
"Price dumping" isn't an economic term in common use.
"Dumping" in international trade is somewhat similar but the reasons that is illegal are very different: https://en.m.wikipedia.org/wiki/Dumping_(pricing_policy)
Pricing at a loss by VC funded companies is great for consumers. It rarely is at a loss though - they look at the lifetime value.
Pricing at a loss by big tech could be viewed as anticompetitive. Personally I like that Gemini keeps OpenAI prices lower but one could argue it has stopped OpenAIs growth.
I wouldn’t assume Gemini is being run at a loss, though. At least not that, if it weren’t, that would help OpenAI much.
Google uses Google hardware, which costs them 1/10 what nvidia hardware costs everyone else.
> Pricing at a loss by VC funded companies is great for consumers. It rarely is at a loss though - they look at the lifetime value.
It's great for consumers only in the short term, the strategy to drive out competition that are not as well-funded has only one goal: to remove competition in the long-term to drive up prices at your will since most competitors won't have the chance to exist.
Edit: yes, technically dumping is a specific type of predatory pricing, so swap "price dumping" on my first comment to "predatory pricing" instead.
It doesn't have one goal.
In fact driving out competition is rarely the goal at all.
Instead the goal is usually to reduce the barrier to people trying the thing - especially when it is a developer API which you hope developers will incorporate into their product.
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