"Price dumping" isn't an economic term in common use.

"Dumping" in international trade is somewhat similar but the reasons that is illegal are very different: https://en.m.wikipedia.org/wiki/Dumping_(pricing_policy)

Pricing at a loss by VC funded companies is great for consumers. It rarely is at a loss though - they look at the lifetime value.

Pricing at a loss by big tech could be viewed as anticompetitive. Personally I like that Gemini keeps OpenAI prices lower but one could argue it has stopped OpenAIs growth.

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piva00 6 days ago | parent | next [-]

> Pricing at a loss by VC funded companies is great for consumers. It rarely is at a loss though - they look at the lifetime value.

It's great for consumers only in the short term, the strategy to drive out competition that are not as well-funded has only one goal: to remove competition in the long-term to drive up prices at your will since most competitors won't have the chance to exist.

Edit: yes, technically dumping is a specific type of predatory pricing, so swap "price dumping" on my first comment to "predatory pricing" instead.

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nl 6 days ago | parent [-]

It doesn't have one goal.

In fact driving out competition is rarely the goal at all.

Instead the goal is usually to reduce the barrier to people trying the thing - especially when it is a developer API which you hope developers will incorporate into their product.

	▲	piva00 6 days ago \| parent \| next [-]
		> In fact driving out competition is rarely the goal at all. Driving out competition is definitely a goal, the further you can snowball that makes your company a much more attractive investment since your competition will be bleeding money, attrition is definitely used as a tactic by VCs when a startup gets traction. Hell, it's one of the arguments they use to run further rounds of investments to others "this startup is very well capitalised and the competition has 1/10th of their funds, investing elsewhere is a losing proposition". > Instead the goal is usually to reduce the barrier to people trying the thing - especially when it is a developer API which you hope developers will incorporate into their product. I thought we were talking about unicorns such as Uber, AirBnb, etc., not some dev startup packaging APIs to serve other startups which is a whole other incestuous industry.
	▲	guappa 5 days ago \| parent \| prev [-]
		AI company founder and CTO defends those practices… yawn.

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Filligree 6 days ago | parent | prev [-]

I wouldn’t assume Gemini is being run at a loss, though. At least not that, if it weren’t, that would help OpenAI much.

Google uses Google hardware, which costs them 1/10 what nvidia hardware costs everyone else.