[code4tee]

Impressive round but it seems unlikely this game can go on much longer before something implodes. Given the amount of cash you need to set of fire to stay relevant it’s becoming nearly impossible for all but a few players to stay competitive, but those players have yet to demonstrate a viable business model.

With all these models converging, the big players aren’t demonstrating a real technical innovation moat. Everyone knows how to build these models now, it just takes a ton of cash to do it.

This whole thing is turning into an expensive race to the bottom. Cool tech, but bad business. A lot of VC folks gonna lose their shirt in this space.

[rsanek]

I was convinced of this line of thinking for a while too but lately I'm not so sure. In software in particular, I think it's actually quite relevant what you can do in-house with a SOTA model (especially in the tool calling / fine tuning phase) that you just don't get with the same model via API. Think Cursor vs. Claude Code -- you can use the same model in Cursor, but the experience with CC is far and away better.

I think of it a bit like the Windows vs. macOS comparison. Obviously there will be many players that will build their own scaffolding around open or API-based models. But there is still a significant benefit to a single company being able to build both the model itself as well as the scaffolding and offering it as a unit.

[mritchie712]

CC being better than Cursor didn't make sense to me until I realized Anthropic trains[0] it's models to use it's own built-in tools[1].

0 - https://x.com/thisritchie/status/1944038132665454841

1- https://docs.anthropic.com/en/docs/agents-and-tools/tool-use...

[klausa]

My gut feeling is that Claude Code being so popular is: - 60% just having a much better UX and having any amount of "taste", compared to Cursor - 39,9% being able to subsidize the raw token costs compared to what's being billed to Cursor - 0,1% some magical advantage by also training the model

Claude Code is just much _pleasant_ to use than most other tools, and I think people are overly discounting that aspect of it.

I'd rather use CC with slightly dumber model, than Cursor with a slightly better one; and I suspect I'm far from being the only one.

[ijidak]

I think we underestimate the insane amount of idle cash the rich have. We know that the top 1% owns something like 80% of all resources, so they don't need that money.

They can afford to burn a good chunk of global wealth so that they can have even more global wealth.

Even at the current rates of insanity, the wealthy have spent a tiny fraction of their wealth on AI.

Bezos could put up this $13 billion himself and remain a top five richest man in the world.

(Remember Elon cost himself $40 billion because of a tweet and still was fine!)

This is a technology that could replace a sizable fraction of humamkind as a labor input.

I'm sure the rich can dig much deeper than this.

[not_the_fda]

"This is a technology that could replace a sizable fraction of humamkind as a labor input."

And if it does? What happens when a sizable fraction of humamkind is hungry and can't find work? It usually doesn't turn out so well for the rich.

[xpe]

> Everyone knows how to build these models now, it just takes a ton of cash to do it.

This ignores differential quality, efficiency, partnerships, and lots more.

[utyop22]

Maybe in enterprise.

But in the consumer market segment, for most cases, its all about who is cheapest (free preferably) - aside from the few loonies who care about personality.

The true lasting economic benefits within enterprise are yet to play out. The trade off between faster code production vs poorer maintained code is yet to play out.

[dcchambers]

And unfortunately, the amount of money being thrown around means that when the bottom falls out and its revealed that the emperor has no clothes, the implosion is going to impact all of us.

It's going to rock the market like we've never seen before.

[jononor]

Hope it stays long enough to build up serious electricity generation, storage and distribution. Cause that has a lot of productive uses, and has historically been underdeveloped (in favor of fossile fuels). Though there will likely be a squeeze before we get there...

[nathan_douglas]

It'd be an interesting time for China to invade Taiwan.

[m101]

Why is this downvoted when it's spot on.. if reality < expectations so much money is sitting on extremely quickly depreciating assets. It will be bad. Risk is to the downside.

[criemen]

I'm not so confident in that yet. If you look at the inference prices Anthropic charges (on the API) it's not a race to the bottom - they are asking for what I feel is a lot of money - yet people keep paying that.

[worldsayshi]

Yeah, a collapse should only mean that training larger models become non viable right? Selling inference alone should still deliver profit.

[cruffle_duffle]

Their employers are paying that money. The jury is still out on how wisely that money is being spent.

[1oooqooq]

you say it can't go much longer, yet herbalife is still listed.

[AbstractH24]

Where are we in that cycle though? How close to the top?