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Comment by mark_l_watson | Hacker News Reader

yes indeed, who will pay? I run a lot through open models locally using LM Studio and Ollama, and it is nice to only be spending a tiny amount of extra money for electricity.

I am retired and not wanting to spend a ton of money getting locked long term into using an expensive tool like Claude Code is a real thing. It is also more fun to sample different services. Don’t laugh but I am paying Ollama $20/month just to run gpt-oss-120b very fast on their (probably leased) hardware with good web search tooling. Is it worth $20/month? Perhaps not but I enjoy it.

I also like cheap APIs: Gemini 2.5-flash, pro when needed, Kimi K2, open models on Groq, etc.

The AI, meaning LLM, infrastructure picture is very blurred because of so many companies running at a loss - which I think should be illegal because long term I think it is misleading consumers.

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> The AI, meaning LLM, infrastructure picture is very blurred because of so many companies running at a loss - which I think should be illegal because long term I think it is misleading consumers.

In a sense it is illegal, even though the whole tech scene has been doing it for decades, price dumping is an illegal practice and I still don't understand why it has never been considered as such with tech.

Most startups with VC investors work only through price dumping, most unicorns came to be from this bullshit practice...

"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.

> 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.

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.

> 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.

AI company founder and CTO defends those practices… yawn.

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.

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