alt Hacker NewsSandboxes look a bit commoditized. You cannot 10x on basically what's just a VM with a few agent-friendly features in 2026. Hence competing on purely price as a new startup is a bad idea imo. As you mentioned hyperscalers have insane margins, but if this turns out to be a real market, they will lower cost, even just eat the loss if they want and take you out of business. Without any hardware innovation, it's tough for me to see this working. If you are going with a customization angle, again, no moat and plenty of competitors
There's a talk from Travis Kalanick recently on a podcast about this. It talks about the advantages of a startup vs an incumbent. My read is if a startup competes on price, the incumbent has no choice but to first let them gain a bunch of market share. It's too expensive for the incumbents to compete on price because a no-name startup is doing it. So they'd have to let you get relevant enough for it to make sense to compete on that axis.
I view it as a wedge to gain market share and later compete on something else.