Historically the winners in software have a flywheel that turns faster with more users. Facebook the more of your friends on it the better the product was. Google tracked how long users were on pages to improve search.
The frontier models are going to win that way. They won't feed your code back into the system but they will track which code you keep and what code gets a "try again claude".
They're not going to lose on price. No consumer software ever has because ultimately it's not that expensive relative to salary and the marginal cost is 0.
The marginal cost of AI is not 0. That's one of the big differences between this and older SaaS software. Inference costs a lot of money. Even if you're looking at just capital depreciation, it's quite expensive. I suppose it's more accurate to say marginal cost is stepwise - adding 1 new user is 0 cost if and only if your existing inference hardware covers that user's usage. As soon as you need a new server, adding _that_ new user costs ~$20k/year (assuming 100k server and 5 year depreciation).
This is true for traditional SaaS too, but the number of concurrent users that could be served by one machine and the cost of the hardware were both at least an order of magnitude better.
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>They're not going to lose on price. No consumer software ever has
Lists examples of software that are free to the users
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