this post was submitted on 10 Aug 2025
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Techcrunch reports that AI coding tools have "very negative" gross margins. In other words, they are losing money on every user. (techcrunch.com)
submitted 1 day ago* (last edited 1 day ago) by Davriellelouna@lemmy.world to c/technology@lemmy.world
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[–] tempest@lemmy.ca 8 points 16 hours ago

Already the cost is quite high. A prolific year can easily burn 100usd a day in tokens and they have not even started to enshitify.

Some of the cost to run these models will come down a bit if Nvidia gets some actual competition which I'm sure will happen in the medium to long term because the hyper scalers definitely don't like paying Nvidia's AI ransom and the Chinese don't want to be beholden to a company the US can influence.

We will see which happens first.