Local AI it is then. Not that I'm using all that much now anyway...
this post was submitted on 02 Jun 2026
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I'm sorry, did everybody else not see this coming from miles away? This is the private equity playbook.
- Make a service so cheap as to seem to good to be true to attract customers.
- Gain a loyal base of people
- once theyre locked in, squeeze them for all they're worth.
When something is too good to be true, you ALWAYS have to be ready to either jump ship, massively change how you do things, or pay through the nose.
The angry devs from this article are idiots
Yeah - people are talking about replacing jobs with AI. As if it is not totally obvious that people like Sam Altman will totally bleed you dry after you fired all your workers. You will not save on your wage bill, you will simply give the money to Sam Altman
Wages are treated as an immediate operational cost, while AI is framed as a capital investment. This accounting distinction makes AI look like a long-term asset, whereas labor remains perpetually categorized as an expense.
Only if you are running your own servers. You dont get to depreciate a SaaS subscription or metered bill.
I've been preaching this for the past couple of years. Everything up until now has been entirely about gaining market share, and AI will never be cheaper than it is right now, and it's not cheap.
Just look at the "earnings" for companies like openAI. They are 1000+% in the red. It's impossible for them to change their sales model enough to make that profitable. As more data centers go up, the operating costs are also going to go up.
I've been telling people that now is the best time in the past decade or more to learn how to code. There will be positions available in the coming years when the only junior devs available are vibe coders.
Private equity?
Admittedly, it's capitalism. But I just chose a negative entity.
It's not even just private equity, this is more or less the exact strategy Microsoft uses.
Also reminds of Android
It reminds of any software made by any company that is at all well known. They are all operating from the same playbook.
Pretty sure they picked the wrong tech to try and lock people into. It isn't hardware and doesn't have some kind of proprietary interface that takes time to get used to when switching. Some models might be better than others at specific things, but not enough to justify the prices they are going to charge for output you have to review and fix.
This is literally the easiest thing to jump ship from.
It would be if so many companies hadn't bought into the microsoft ecosystem so hard. My company did the usual BS of "well we have an e5 license so it's free". Now we are married to all their stupid shit and have no relationships with other providers. End of the month gonna be expensive. Now expect a scramble to cut master service agreements and contracts with others in a panic.
That's the stupidest thing about these AI companies' valuation.
They don't even really own anything!
Their models -- their main proprietary IP -- are not copyrightable or patentable, and not legally protected in any way. Any competitor can copy them at any time and then offer the same service for cheaper, without the overhead costs for training. The giants of the AI industry could easily be undercut and replaced at any time.
The hardest part about the copying is the actual copying without having access to the weights or even just a ready to run file for the model.
IIRC Deepseek kinda did something like that by asking ChatGPT tons of questions to train their own model or something
Yeah, you can do that ... or some good old fashioned corporate espionage.
Or, hell, just ask ChatGPT for its weights model. With how shitty these AI companies are at security and guardrails, that might just work.
If you're a pure vibe coder, this is literally 9/11.
It isn’t hardware and doesn’t have some kind of proprietary interface that takes time to get used to when switching.
The proprietary interface is kinda the largest selling point, besides the once cheap prices. But the $10 plan going from 300 multi-hour prompts per month to 20 quick prompts per month effectively makes it worthless. Though, you could just pay a few hundred/thousand per month and continue, or bring your own API key from elsewhere, but at that point just use someone else's interface. It's not that much better than competitors and copilot isn't offering anything unique.
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The unique thing about GitHub Copilot (and all the other vibe-coding tools) is that they're speed-running the playbook because this shit is not profitable. It can't be. Their costs scale up with usage, unlike every other business that can take advantage of economies of scale, so they've skipped the slow, steady enshittification phase and jumped directly into the "squeeze blood from this stone to keep the scam going a little longer" phase.
they’re speed-running the playbook because this shit is not profitable.
Wait, what? You say it is a scam? A kind of technical Ponzi scheme? A Madoff syndicate on steroids?
Good sign that it may be over soon.
Absolutely 100% do not count on it
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The crazy thing is, this isn't really a "squeeze" in the traditional sense. The problem was that every single mainstream AI product has been heavily subsidized....because it's wildly expensive and not even close to being profitable.
That sort of subsidization was only going to last for so long. The dam is starting to crack. People aren't ready to pay what AI truly costs.
And it doesn't seem like they ever will be. The LLM value proposition is already dubious at today's subsidized rates.
I remember having to sit down my boss and explain how it can only become more expensive over time. It’s the big tech playbook after all. Didn‘t matter. I‘m told again and again how AI is only becoming stronger and cheaper. Especially during salary negotiations. Nasty stuff. They know I know it‘s BS and they still cling to this nonsensical narrative because it would be very beneficial to them and very bad for me.
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The strategy is always to gain a monopoly or near monopoly on a market before pushing for the enshittification of the product to reduce costs and maximize profits, once customers have become dependent on said product, then pray that most choose the path of least resistance which is staying and dealing with the worse and more expensive version of what they're used to rather than retraining or restarting from zero elsewhere.
Capitalism 101.
Which is why deepseek releasing it's model open source was such a big deal. The monopoly isn't feasible.
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You mean you guys don't rotate between 10 free accounts and use their monthly quotas?
That many free accounts is against their user agreement though hehe
What are they gonna do, close your accounts and make you sign up for 10 more? lol
Oops. Now that users are being to made to pay something closer to the true cost of AI inference, no one will like using it anymore. Could this be what ultimately sets off the bubble *collapse?
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Joke's on them, I never used it. Fuck AI.
The 2 remaining devs using Copilot will leave it.
It's rare to see such a clear example of first-mover disadvantage as GitHub Copilot.
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"For basically nothing'... If it's basically nothing then use your damn brain to do it.
What I want to know, is that are they just charging closer to the real cost or the actual real cost.
Chances are they would want to slowly increase the price à la boiling frog method.
And once that happens, then they have to increase it again to make profit, AND that has to measure up against regular ways of making money so it can’t just be barely profitable.
It’s a long road ahead for them
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