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'Inference whales' are eating into AI coding startups' business model

Business Insider

14 minutes ago

Business Insider

'Inference whales' are eating into AI coding startups' business model

The AI coding sector has a problem. Heavy users of AI coding services have been racking up huge costs, forcing some leading startups to overhaul their pricing structures and offerings to avoid big losses. "Inference whales," as some in the business call these customers, are making industry insiders question whether AI products that are just "reselling inference" can survive long-term. Inference refers to how AI models are run. Newer reasoning models break user requests down into multiple steps, which increases inference costs. When applied to AI coding services, where developers set automated agents to longer-term tasks, expenses can soar quickly. This is a problem for AI coding services because they're often offered through monthly subscription plans. Many plans allow unlimited use for a fixed monthly fee, and a few users have taken advantage by bombarding the services with huge projects. These startups must still pay for the underlying AI models, so they're getting squeezed between a relatively fixed revenue stream and rapidly rising backend costs. "If you're purely reselling AI inference, your business could be very fragile and vulnerable, because the winds can shift violently," said Eric Simons, CEO of StackBlitz, and startup that offers a popular AI coding service called Claude Code whales Anthropic offered its popular Claude Code service through a $200 a month unlimited plan earlier this year. Some subscribers went berserk, using thousands of dollars' worth of AI inference over a few weeks or months. Someone even built a website to rank these AI coding whales. The Claude Code Leaderboard lists one developer at the top who's burned through almost 11 billion tokens. Tokens are how AI models break queries down into digestible data chunks. Industry pricing is based on how many tokens are processed. That top-ranked developer's token usage costs almost $35,000, according to this leaderboard. That compares to the $200 a month he's been charged. Even if that's over a whole year, Anthropic would be getting about $2,400, while incurring much higher inference costs. Anthropic is changing its pricing That's clearly unsustainable, so Anthropic plans to change its pricing. The $200 a month plan will stay, but the startup will introduce weekly rate limits, starting August 28. If users blow through these new weekly rate limits, they will have to buy additional capacity. "We've identified extreme usage by a small number of customers that impacts capacity for our broader community," an Anthropic spokesperson told Business Insider. The startup said it's also seen "policy violations," such as account sharing and reselling access. "We're committed to supporting advanced use cases long-term, but need to ensure consistent performance for all developers in the meantime," the Anthropic spokesperson added. A Swedish whale I tracked down one of the whales near the top of the Claude Code Leaderboard. Albert Örwall, a developer based in Sweden, said he's been using the $200 a month Claude Code subscription to build his own vibe-coding platform, along with some open-source agentic tools. "I was probably running 3 to 4 fairly long-running tasks in parallel constantly while I was working, and that's when it really took off," he said of his Claude Code usage. Even excluding these big projects, Örwall said his regular workflow in Claude Code likely racks up inference costs of $500 per day, under a subscription that costs only $200 a month. "So I'm guessing my workflow might not be sustainable for Anthropic," he added. Cursor responded, too When Anthropic's new pricing kicks in, Örwall said he'll keep the $200 a month subscription for a while to get a feel for what the weekly limits actually mean for his budget. "I'll avoid paying anything beyond the $200 subscription," he said, noting that he can change how he writes code and develops projects to avoid breaching the new rate limits. "The reason I originally switched from Cursor to Claude Code was because usage-based pricing became too expensive in Cursor," Örwall added. Cursor is another popular AI coding service, which often uses Anthropic's AI models as the underlying intelligence powering its product. Cursor recently switched its $20 a month Pro plan from unlimited requests to a tiered system with usage-based pricing for "fast" requests, meaning users are charged extra for exceeding a certain limit. This change, coupled with a lack of clear communication, caused confusion and frustration among some users who expected unlimited usage. Cursor announced the initial change in mid-June. Then it updated with more details about 2 weeks later, and then again in early July. "New models can spend more tokens per request on longer-horizon tasks," the startup wrote in a blog post, apologizing for surprising users with unexpected new bills. "Though most users' costs have stayed fairly constant, the hardest requests cost an order of magnitude more than simple ones." Inference costs aren't falling The assumption across the industry has been that inference costs will drop dramatically, making these AI coding services more financially viable. However, in practice, this hasn't happened thus far. Instead, when a new top AI model comes out, all the AI coding services integrate it — along with its higher prices. "This is the first faulty pillar of the 'costs will drop' strategy," Ethan Ding, CEO of startup TextQL, wrote in a recent blog. "Demand exists for 'the best language model,' period. And the best model always costs about the same, because that's what the edge of inference costs today." Developers and other AI users usually want the best, not last month's leading intelligence. "Nobody opens Claude and thinks, 'you know what? let me use the shitty version to save my boss some money.' We're cognitively greedy creatures," Ding wrote. "We want the best brain we can get." Even when inference costs do fall, the rise of agentic AI workflows means that developers set up longer, automated projects that generate a lot more tokens. If a project uses 100 million tokens, rather than 1 million, the initiative's cost remains high, even if per-token prices may have fallen. "A $20/month subscription cannot even support a user making a single $1 deep research run a day," Ding said. "But that's exactly what we're racing toward. Every improvement in model capability is an improvement in how much compute they can meaningfully consume." "There's no way to offer unlimited usage in this new world under any subscription model," he added. "The math has fundamentally broken."

'Inference whales' are breaching AI coding startup business models

Business Insider

2 hours ago

Business Insider

'Inference whales' are breaching AI coding startup business models

The AI coding sector has a problem. Heavy users of AI coding services have been racking up huge costs, forcing some leading startups to overhaul their pricing structures and offerings to avoid big losses. "Inference whales," as some in the business call these customers, are making industry insiders question whether AI products that are just "reselling inference" can survive long-term. Inference refers to how AI models are run. Newer reasoning models break user requests down into multiple steps, which increases inference costs. When applied to AI coding services, where developers set automated agents to longer-term tasks, expenses can soar quickly. This is a problem for AI coding services because they're often offered through monthly subscription plans. Many plans allow unlimited use for a fixed monthly fee, and a few users have taken advantage by bombarding the services with huge projects. These startups must still pay for the underlying AI models, so they're getting squeezed between a relatively fixed revenue stream and rapidly rising backend costs. "If you're purely reselling AI inference, your business could be very fragile and vulnerable, because the winds can shift violently," said Eric Simons, CEO of StackBlitz, and startup that offers a popular AI coding service called Claude Code whales Anthropic offered its popular Claude Code service through a $200 a month unlimited plan earlier this year. Some subscribers went berserk, using thousands of dollars' worth of AI inference over a few weeks or months. Someone even built a website to rank these AI coding whales. The Claude Code Leaderboard lists one developer at the top who's burned through almost 11 billion tokens. Tokens are how AI models break queries down into digestible data chunks. Industry pricing is based on how many tokens are processed. That top-ranked developer's token usage costs almost $35,000, according to this leaderboard. That compares to the $200 a month he's been charged. Even if that's over a whole year, Anthropic would be getting about $2,400, while incurring much higher inference costs. Anthropic is changing its pricing That's clearly unsustainable, so Anthropic plans to change its pricing. The $200 a month plan will stay, but the startup will introduce weekly rate limits, starting August 28. If users blow through these new weekly rate limits, they will have to buy additional capacity. "We've identified extreme usage by a small number of customers that impacts capacity for our broader community," an Anthropic spokesperson told Business Insider. The startup said it's also seen "policy violations," such as account sharing and reselling access. "We're committed to supporting advanced use cases long-term, but need to ensure consistent performance for all developers in the meantime," the Anthropic spokesperson added. A Swedish whale I tracked down one of the whales near the top of the Claude Code Leaderboard. Albert Örwall, a developer based in Sweden, said he's been using the $200 a month Claude Code subscription to build his own vibe-coding platform, along with some open-source agentic tools. "I was probably running 3 to 4 fairly long-running tasks in parallel constantly while I was working, and that's when it really took off," he said of his Claude Code usage. Even excluding these big projects, Örwall said his regular workflow in Claude Code likely racks up inference costs of $500 per day, under a subscription that costs only $200 a month. "So I'm guessing my workflow might not be sustainable for Anthropic," he added. Cursor responded, too When Anthropic's new pricing kicks in, Örwall said he'll keep the $200 a month subscription for a while to get a feel for what the weekly limits actually mean for his budget. "I'll avoid paying anything beyond the $200 subscription," he said, noting that he can change how he writes code and develops projects to avoid breaching the new rate limits. "The reason I originally switched from Cursor to Claude Code was because usage-based pricing became too expensive in Cursor," Örwall added. Cursor is another popular AI coding service, which often uses Anthropic's AI models as the underlying intelligence powering its product. Cursor recently switched its $20 a month Pro plan from unlimited requests to a tiered system with usage-based pricing for "fast" requests, meaning users are charged extra for exceeding a certain limit. This change, coupled with a lack of clear communication, caused confusion and frustration among some users who expected unlimited usage. Cursor announced the initial change in mid-June. Then it updated with more details about 2 weeks later, and then again in early July. "New models can spend more tokens per request on longer-horizon tasks," the startup wrote in a blog post, apologizing for surprising users with unexpected new bills. "Though most users' costs have stayed fairly constant, the hardest requests cost an order of magnitude more than simple ones." Inference costs aren't falling The assumption across the industry has been that inference costs will drop dramatically, making these AI coding services more financially viable. However, in practice, this hasn't happened thus far. Instead, when a new top AI model comes out, all the AI coding services integrate it — along with its higher prices. "This is the first faulty pillar of the 'costs will drop' strategy," Ethan Ding, CEO of startup TextQL, wrote in a recent blog. "Demand exists for 'the best language model,' period. And the best model always costs about the same, because that's what the edge of inference costs today." Developers and other AI users usually want the best, not last month's leading intelligence. "Nobody opens Claude and thinks, 'you know what? let me use the shitty version to save my boss some money.' We're cognitively greedy creatures," Ding wrote. "We want the best brain we can get." Even when inference costs do fall, the rise of agentic AI workflows means that developers set up longer, automated projects that generate a lot more tokens. If a project uses 100 million tokens, rather than 1 million, the initiative's cost remains high, even if per-token prices may have fallen. "A $20/month subscription cannot even support a user making a single $1 deep research run a day," Ding said. "But that's exactly what we're racing toward. Every improvement in model capability is an improvement in how much compute they can meaningfully consume." "There's no way to offer unlimited usage in this new world under any subscription model," he added. "The math has fundamentally broken."

From Patios to Cars: Choosing the Best Pressure Washer in Pakistan

Time Business News

2 hours ago

Time Business News

From Patios to Cars: Choosing the Best Pressure Washer in Pakistan

In Pakistan's dusty and often unpredictable climate, keeping your surroundings clean can be a real challenge. From stubborn dirt on your patio to road grime on your car, some cleaning tasks are simply too tough for a garden hose or bucket. That's where a pressure washer comes in—delivering powerful, pressurized water to blast away dirt, mold, grease, and stains in minutes. But with so many models and features available, how do you pick the best pressure washer in Pakistan for your needs? This guide will walk you through what to look for, types of pressure washers, top uses, and tips to make sure you choose a machine that works just as hard as you do. Why a Pressure Washer is Worth the Investment A pressure washer isn't just a fancy gadget—it's a time-saving tool that can handle multiple cleaning jobs efficiently. Instead of hours of scrubbing, you can get a spotless finish in minutes. The benefits include: Time efficiency – Clean large areas quickly. – Clean large areas quickly. Better results – High pressure removes dirt more effectively than traditional methods. – High pressure removes dirt more effectively than traditional methods. Water savings – Uses less water compared to a garden hose for the same job. – Uses less water compared to a garden hose for the same job. Versatility – Works for patios, driveways, vehicles, walls, fences, outdoor furniture, and more. Whether you're maintaining a home, a shop, or a fleet of vehicles, a pressure washer pays for itself in time and effort saved. Hyundai Power Offers More Than Just Pressure Washers Hyundai Power provides a comprehensive range of Hyundai-branded home appliances, power equipment, and industrial tools. Their products include power generators, home appliances, solar solutions, lighting, gardening tools, and industrial equipment. With a reputation for durability, innovation, and practical design, Hyundai Power offers solutions that meet the needs of both households and professional users in Pakistan. Types of Pressure Washers in Pakistan Before choosing a pressure washer, it's important to know the two main types available: 1. Electric Pressure Washers Ideal for home use and light-to-medium cleaning tasks. Quieter and easier to maintain than petrol or diesel models. Require a power outlet, making them perfect for fixed-location cleaning. Best for washing cars, bikes, small patios, and garden furniture. 2. Petrol or Diesel Pressure Washers More powerful, suited for heavy-duty cleaning and commercial use. Don't rely on electricity—ideal for outdoor areas or job sites without power access. Better for large patios, industrial floors, trucks, and heavily soiled surfaces. Require more maintenance compared to electric models. Key Factors to Consider When Buying a Pressure Washer To make sure you get the right pressure washer for your needs, here are the main features to check: Pressure Output (PSI or Bar) Light cleaning: 1000–1600 PSI. Medium cleaning: 1600–2400 PSI. Heavy-duty cleaning: 2400 PSI and above. Water Flow Rate (Liters per Minute) Higher flow rates clean faster by washing away dirt more efficiently. Motor Power Electric models usually range from 1200W to 2500W. Petrol/diesel engines are rated in horsepower (HP). Portability and Weight Look for wheels and a sturdy handle if you plan to move it around often. Nozzle Options Adjustable nozzles let you change spray patterns from a narrow jet to a wide fan. Some models include special attachments for cars, patios, or gutters. Durability and Build Quality A strong frame, corrosion-resistant parts, and good hose quality are important for long-term use. Maintenance and Service Choose a brand with easy access to spare parts and after-sales support. Best Uses for a Pressure Washer in Pakistan A pressure washer can be surprisingly versatile. Here are some of the most common uses: Car and Bike Cleaning A gentle but effective wash that removes dirt without damaging paintwork. Use a foam lance attachment for the best results. A gentle but effective wash that removes dirt without damaging paintwork. Use a foam lance attachment for the best results. Patio and Driveway Cleaning Removes moss, algae, oil stains, and dust build-up, restoring surfaces to their original look. Removes moss, algae, oil stains, and dust build-up, restoring surfaces to their original look. Garden Furniture Quickly cleans outdoor chairs, tables, and benches before a family gathering or event. Quickly cleans outdoor chairs, tables, and benches before a family gathering or event. Walls and Fences Strips away dirt, mold, and peeling paint, making surfaces ready for repainting. Strips away dirt, mold, and peeling paint, making surfaces ready for repainting. Shop Fronts and Outdoor Business Areas Keeps your workspace looking professional by removing grime and debris. Keeps your workspace looking professional by removing grime and debris. Farm Equipment and Tools Removes mud, grease, and oil build-up, extending the life of machinery. Tips for Getting the Most Out of Your Pressure Washer Start at Low Pressure – Begin cleaning with a lower setting to avoid surface damage, then increase pressure as needed. – Begin cleaning with a lower setting to avoid surface damage, then increase pressure as needed. Use the Right Nozzle – A narrow jet for stubborn stains, a wider spray for general cleaning. – A narrow jet for stubborn stains, a wider spray for general cleaning. Apply Detergent When Needed – Special detergents can make cleaning faster and more effective. – Special detergents can make cleaning faster and more effective. Maintain Regularly – Check hoses, nozzles, and filters to keep your machine running smoothly. Choosing the Best Pressure Washer for Cars If car washing is your main goal, here's what to look for: Pressure Range – Between 1200 and 1800 PSI is ideal to avoid damaging paint. – Between 1200 and 1800 PSI is ideal to avoid damaging paint. Foam Lance Attachment – Helps apply car shampoo evenly. – Helps apply car shampoo evenly. Compact Design – Easier to store and move around the vehicle. – Easier to store and move around the vehicle. Consistent Water Flow – Ensures an even rinse without streaks. Choosing the Best Pressure Washer for Patios and Heavy Cleaning For larger areas or stubborn dirt, focus on: Higher Pressure (2000 PSI or above) – Cuts through tough grime. – Cuts through tough grime. Rotary or Turbo Nozzle – Spins water at high speed for maximum cleaning power. – Spins water at high speed for maximum cleaning power. Long Hose Length – Allows you to move freely without constantly repositioning the unit. – Allows you to move freely without constantly repositioning the unit. Durable Pump – Look for models with a metal pump rather than plastic for longevity. Electric vs Petrol: Which Should You Choose? Go Electric if you mainly clean cars, small patios, or garden furniture, and have easy access to power. if you mainly clean cars, small patios, or garden furniture, and have easy access to power. Go Petrol/Diesel if you clean large outdoor areas, work in remote locations, or need maximum power for industrial tasks. Final Tips Before You Buy Match the pressure washer's power to your most frequent cleaning job. Consider storage space—some models are compact and wall-mountable. Think about future needs; it's better to buy a slightly more powerful machine than to outgrow a smaller one too quickly. Always buy from a reputable brand with reliable after-sales service. Conclusion From freshening up your car to restoring your patio's original shine, a pressure washer is a game-changing tool for homes and businesses in Pakistan. Electric models are perfect for everyday cleaning, while petrol or diesel units handle heavy-duty tasks with ease. By considering your needs, budget, and available features, you can invest in a pressure washer that delivers excellent performance for years to come. TIME BUSINESS NEWS

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'Inference whales' are eating into AI coding startups' business model

'Inference whales' are breaching AI coding startup business models

From Patios to Cars: Choosing the Best Pressure Washer in Pakistan

Hyundais Receiving a Tesla-Esque Next-Gen Infotainment System Despite Consumer Feedback

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'Inference whales' are eating into AI coding startups' business model

'Inference whales' are breaching AI coding startup business models

From Patios to Cars: Choosing the Best Pressure Washer in Pakistan

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