alt Hacker NewsI'm of the opinion that the market will need to expand, horizontally. That's what's happening, with low-cost LLMs. I already know lots of "regular folks" that are totally hooked on LLMs (mostly ChatGPT, at the "regular mensch" level). They usually use the free tier, but a lot of them are doing the $20/month Pro tier.
If anyone is in my age group, they remember when ATMs were free. It was the "heroin dealer" business model. It worked out well (for the banks). The Chinese did it with manufacturing.
Getting people hooked on subsidized junk, is an age-old (and highly effective) business model.
Think of all the shops that will soon be composed of people that simply can't even get out of bed, if their LLM is not available. If the LLM dealer starts raising the price, there's no choice. I suspect many of the valuations are taking this into account.
> "Junk is the ideal product... the ultimate merchandise. No sales talk necessary. The client will crawl through a sewer and beg to buy."
-William Burroughs
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> Think of all the shops that will soon be composed of people that simply can't even get out of bed, if their LLM is not available.
I'm biased because I don't use AI, but I don't understand why you wouldn't fire these LLM-addicted people and replace them with people who can code or write an email without the use of an AI assistant.
LLMs are rapidly becoming commodities with open weight and Chinese models. Frontier providers won't be able to raise prices forever, indeed we already see evidence of decreased prices from such competition.
And ATMs can be free still, if you use a bank that refunds all worldwide ATM fees, such as Charles Schwab.