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Techcrunch reports that AI coding tools have "very negative" gross margins. In other words, they are losing money on every user. (techcrunch.com)
submitted 1 year ago by to c/technology@lemmy.world
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[–] 14 points 1 year ago (3 children)

Yes, it does, but at the price needed to make it profitable, it’s not desirable.

LLMs are not useless; they serve a purpose. They just are nowhere near as clever as we expect them to be based on calling them AI. However, body is investing billions for an email writing assistant.

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  • [–] 0 points 1 year ago (2 children)

    Price is essentially zero if you just run it locally

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  • [–] 8 points 1 year ago

    Yes, but requires decent hardware and energy to do so. If the cost to host keeps dropping, people will self host and the ai companies won't make money. If the cost remains high, the subscriptions won't provide value and they won't make money.

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  • [–] 4 points 1 year ago

    I dunno about that... Very small models (2-8B) sure but if you want more than a handful of tokens per second on a large model (R1 is 671B) you're looking at some very expensive hardware that also comes with a power bill.

    Even a 20-70B model needs a big chunky new graphics card or something fancy like those new AMD AI max guys and a crapload of ram.

    Granted you don't need a whole datacenter, but the price is far from zero.

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