This would probably became very true if we would stay with the current prices of 'AI'.

Will we? Open AI is not profitable. Anthropic says that they may have profitable quarter. If they will raise prices will it still be the case? If you can 'vibe code your taxes app' but it will require constant fixes every month and those fixes will cost you 50$ in tokens and it will not be bullet proof, does it makes sense anymore? Maybe just pay 50$ for subscription to similar software? Maybe Chinese companies will keep low prices and it will cost 2$ dollars instead of 50, but that only works if you are doing that to 'vibe code' your scheduling/to do app. If you are any serious company you have regulations and GDPA and ISO and you cannot sent you financial and customer company to Chinese deepseek provider.

And software need constant upkeep. OS update, API changes, libraries get obsolete, build system does not work anymore... etc. This is very apparent for me every time I am doing changes to my Flutter mobile app need an update: I basically need to spin up environment from scratch, then update half of packages, then update all APIs fro those packages because of changes and when I finally do the change, pipeline breaks and I cannot sign the android release. Last time I just gave up on that. Non software people think you can just install Claude and prompt your app. Which is true. But then things break. Data disappear. You do not have backup. Licence changes and you can't use new version of some tool. Binaries got renamed. APIs disappear. Domain is not reachable anymore. And so on and on and on...

Software companies are forced to use 'AI' too so speed of breaking changes will increase and you either have to pickup on those or pay someone to do that for you regardless if this will be 'AI' provider and tokens usage or SaaS.

In 90 there were people in my country selling PC parts on every corner. No there is maybe one or two in entire city and I did not visit none in maybe 10 years. There were a thing because you could just buy parts and build your new system. You still can but now you can just order online.

So sure 'vibe coding' is a thing now but I am not convinced it will be a thing in 10-20 years. Maybe it will be online service that will automatically write an application for you based on specification for few $ but as a user you expecting an outcome and do not want to be bothered by npm and node version necessary for that.

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simianwords 3 days ago | parent [-]

I’m curious about the mental model of people who think ai is extremely subsidised. This view is strange because GLM released a few weeks ago and it is confidently better than say GPT 5.

I think you are in for a rude shock - your expectation that there will come a reckoning where people are forced to content real prices of AI.. will never happen. It won’t.

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npodbielski 3 days ago | parent | next [-]

And how you do know that GLM is not subsidised? Maybe Chinese government is burning money to destroy US economy by making them lose money in AI companies that are just furnace burning dollars. Unless you have some compelling argument it is just a speculation.

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SyneRyder 3 days ago | parent | next [-]

It's because GLM 5.2 is offered on many inference providers, including providers in the US. Those companies only make their money by charging for inference, and yet they seem to be doing quite well while charging the exact same prices as Z.AI / GLM.

In fact, there's a price war where some of the US inference providers are undercutting the pricing of Z.AI's own GLM hosting. Novita & AtlasCloud are both offering 8% and 5% discounts on GLM 5.2 respectively. GMICloud is charging 30% less - but getting so hammered with demand that it only has 80% uptime & 7 tokens per second, so you get what you pay for.

You can find a list of providers & their pricing through OpenRouter here:

https://openrouter.ai/z-ai/glm-5.2#providers

	▲	npodbielski 2 days ago \| parent [-]
		Sure I am not disputing that. But we can't say that z.ai is profitable because they charge the same as other providers per token. There is also training cost. And reaserch cost. Just inference is not all. Maybe there are profitable with all of it, I am not saying they are not, I do not know but at the same time I highly doubt that. Unless somebody will find a way to actually do training by just updating weights with new data you have to train from scratch and this is very costly process. Saying that some lab is profitable because they are profitable doing inference while disregarding training cost is not fair assessment.

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faangguyindia 3 days ago | parent | prev [-]

West china has cheap electricity via solar. Satellite images reveal large scale data center build outs. Untill now this electricity did not have much use as this region lacks major connectivity to ports and industrial regions.

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blourvim 2 days ago | parent | prev | next [-]

Training is expensive, to keep selling tokens, they have to have the best model. They have to keep spending money on model training

A product or a platform could give them a moat, but they don't quite have that yet although I think they are looking to get there

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faangguyindia 3 days ago | parent | prev [-]

It happens because people fail to account for economies of scale. Believing everything scales linearly is major flaw in the ways most people think.