and they are not yet charging for the "tokens" what they need to charge to become profitable
We recently got access to Claude Enterprise and found how expensive it is. We were given $45 a month of budget. Everyone in the team blew through that in 2 days. And considering this is still being "subsidized" I honestly don't see what's the future for "AI Coding".
The whole AI revolution is predicated that today's models are clumsy, error-prone, and EXPENSIVE...just like the early computers, but advancements in technology will make them more reliable and cheaper and that in 10 years, doing the same work will be a fraction of today's cost with greater accuracy. The problem is accuracy is improving VERY slowly. Yeah, on benchmarks they cheat on, you can show whatever you like, but Claude still errors daily for me and has pretty consistently for the last 2 years. If there are positive changes, they're definitely subtle. I'll assume there are some.
But the dirty secret is that each new model is a lot more expensive than the last. There's no sign of the cost coming down. There's really no indicator that will happen. All indicators are that costs are going up. At the moment, the cost is being subsidized by VCs. Once investors pull their funding, Claude is going to have to pay for all the electricity they consume...so is DeepSeek and the lagging models. Also, our tolerance for failure is going to go down.
It's impossible to predict the future, but I see no route to the costs going down. There are no hints at the algorithms getting tangibly cheaper....yeah, some advancements have helped a few percent here and there, but we need factors, not percentages, like 5x efficiency gains, not 5%. The chips are already fully optimized. There's no know reason to assume they will get tangibly faster. We can't shrink them much more like we used to 20 years ago. There's no hope electricity will get drastically cheaper.
However, what I predict will happen? Those AI models will get a LOT better at breaking into your shitty agentic-engineered, vibe-coded monstrosities...so any money you thought you saved by having AI write it? I hope you don't mind data loss and ransomware!