It's like a horse race.
But yeah enjoy the subsidies. It's like the cheap Ubers of yesteryear.
The more interesting, novel, and useful work you wrap the LLM in the more defensible your pricing will be.
That said I think this can describe a lot of agentic code tools - the entire point is that you're not just talking to the raw LLM itself, you're being intermediated by a bunch of useful things that are non-trivial.
I see this with Anthropic most - they seem to have multiple arms in multiple lines of business that go up the abstraction ladder - Claude Code is just one of them. They seem to also be in the customer service automation business as well.
[edit] I think a general trend we're going to see is that "pure" LLM providers are going to try to go up the abstraction ladder as just generating tokens proves unprofitable, colliding immediately with their own customers. There's going to be a LOT of Sherlocking, and the LLM providers are going to have a home field advantage (paying less for inference, existing capability to fine-tune and retrain, and looooooots of VC funding).
However they will benefit in a way like they benefit from faster server processors: they still have competition and need to fight to stay relevant.
The customers take a lot of the value (which is good).
While there is a lot of fear around AI and it's founded I do love how no one can really dominate it. And it has Google (new new IBM) on it's toes.
They do need to develop sustainable end-user products, or be purchased by larger players, or liquidate.
It's hard to add sophisticated abstractions though, because they are all selling text by the pounds (kilos?). So it feels the same as vendor lock for a cucumber seller, doesn't it? The seller can sell you an experience that would lock you in, but aside from it there is no moat since anyone can sell cucumbers.
It doesn't take much more of a stretch to imagine teams of agents, coordinated by a "programme manager" agent, with "QA agents" working to defined quality metrics, "architect" agents that take initial requirements and break them down into system designs and github issues, and of course the super important "product owner" agent who talks to actual humans and writes initial requirements. Such a "software team system" would be another abstraction level above individual agents like Codex.
Inference cost is plummeting. It’s like the cheap Ubers of yesteryear, if the cost of hiring a driver dropped by a factor of a thousand in the past three years.
