[maccard]

VC investment isn’t about margins, it’s about finding a unicorn. It doesn’t matter if margins are negative if your product is dominant in the market as you can fiddle with the margins after the fact. You just need to be invested long enough to see everyone else fail.

[AlexandrB]

The problem with AI is that there doesn't seem to be a durable barrier to entry for a "winner take all" dynamic to work. The biggest barrier to entry seems to be the capital needed to train the models, but even free models are getting "good enough" for some uses and there's little friction to stop users from switching between models. Many frontends make this explicit by letting you pick the model you want to run inside the same environment.

If prices go up, I suspect a bunch of folks will jump to cheaper, less capable models instead of eating the added cost. The whole value proposition of AI in enterprise is around cost-cutting, so that mentality is likely to persist when choosing which model to pay for.

[xienze]

I imagine the calculus changes a little bit when you've invested hundreds of billions (trillions?) of dollars in a relatively short period of time. Priority number one is probably getting that money back. I think the fact that providers are RAPIDLY cutting back/jacking up prices points to this being the case.