This may be a hugely unpopular opinion, but I don’t think it should be legal to sell a product at a loss, except maybe in clearance situations. Like you should be able to sell a product for $100 then use $1 million investment to develop a new process, then sell for $80 with the cheaper process, but not sell for $80 while the cheaper process is being developed.

Anthropic in the latest fundraise announce their gross margins are around 60%. Typically in the industry now, the gross margins are reported as revenue - cost of only serving paid users (free users etc. go in either cac or r&d). The thing is, with this margin, Anthropic can serve 2.5x more tokens than say cursor without making a loss for the same price compared to cursor. This reality is likely going to hit other startups based on the same assumption too. Anthropic has not reduced its pricing in almost a year now.

Anysphere in that article = Cursor

(I was confused as to why so much of the article mentioned a company called Anysphere who I had not heard of. So looked it up and it's the company name)

https://techfundingnews.com/meet-cursor-how-anyspheres-mit-b...

I can replicate almost all of cloud based vibe coding with the Roo Code extension for VS Code and a Qwen Coder model file from HuggingFace, all running on my gaming computer. And I usually get better code quality than almost every cloud based coding agent I've tried.

That right there says a lot about where we are with AI now. We have AI models that can run on off-the-shelf name brand computers (think a Dell or HP tower at a Best Buy) with about the same memory footprint as a few Chrome tabs. Yeah, it'll be slow and stutter like crazy at only a few tokens per second of output. But it still works in the first place.

And that's the important part here. The fact that local on-device AI is here, it can produce output superior to cloud platforms in general, and it's only going to get better over time (especially zero shot training techniques - look it up). These firms' products are expensive developer front ends to some of the most expensive and proprietary models on the market - that they have to rent themselves. Why use them as a middle man when I can either go to the model provider directly or bring my own model?

Also, this trend of fully forking VS Code needs to stop. These coding apps could have been VS Code extensions, which would let devs have access to all of Microsoft's proprietary tooling. And the apps feel vibe coded themselves overall.