Is AI Gonna Sink This Biz?
The coding vibe, driven by platforms that translate natural language into software thanks to AI, is facing a challenge that could compromise its survival. The models behind this magic are so expensive that keeping them in the market is almost unfeasible.
### The dream of coding without coding
Startups like Cursor, Windsurf, and Replit became popular by allowing anyone to create code simply by describing what they needed. They access powerful AI models from companies like OpenAI, Google, or Anthropic, but the costs are increasing as the models become more accurate and expensive.
The user pays a monthly subscription, but a large part of that income goes to cover the costs of the APIs. The pressure to offer the most advanced technology, even at negative margins, is high to attract customers.
### The hidden price of artificial intelligence
The cost of using these AI models can range from $10 to $75 for a million tokens, depending on the provider. The case of Windsurf, acquired by OpenAI for $3 billion despite negative margins, shows the challenge startups face in maintaining profitability.
Future options for startups include developing their own models to reduce dependence, but this requires significant investments and technical expertise. Another option is to wait for AI prices to drop, although the trend is towards rising costs, putting these companies in a delicate situation.
### A model at risk of collapse
The high costs and dependence on external providers make the coding vibe a high-risk business. If prices remain high and proprietary models are not developed in time, many startups in this space could see their dream of coding without coding cut short by financial reality.
