I have a suspicion that when China will roll out their NVIDIA capable chips - and that is a question of when, not if - NVIDIA stock will plummet as it is heavily overvalued atm.
Well yes. People have said this since at least 2012, and we're still waiting for a CUDA-killer in 2026.
Chinese fabs can't import cutting-edge silicon, and they can't manufacture EUVL at scale either. I have no reservations concerning China's ability to innovate, but the blockers are enormous and have succeeded in preventing China from accessing the true HPC market for over a decade now.
The problem with this is that we do not know the actual cost. For all we know they might be pulling an Anthropic. Subsidizing costs to get users, then increasing them later on.
They're offering a model based on Kimi K2.5 for $0.50/M input and $2.50/M output while the cheapest third-party provider on OpenRouter charges $0.40/M input and
$1.90/M output https://openrouter.ai/moonshotai/kimi-k2.5 Those third-party providers have little incentive to subsidize their customers, so Cursor probably has a margin >20% on their inference cost.
The real money furnace is the training, not just of models that get released, but also experimental training runs that fail to move benchmarks and are quietly thrown away. E.g. Cursor claim that 85% of the compute for Composer 2.5 comes from additional training on top of Kimi K2.5, where I'm not sure how they determined that, but it can't have been cheap. Then they say "Together with SpaceXAI, we're training a significantly larger model from scratch, using 10x more total compute."
So yes, they're probably attempting to replicate the Anthropic playbook of paying a large upfront cost for a very good model, and then rapidly acquiring paying customers, hoping that the inference margin will be enough to cover the training cost.
Ugh, gives bad flashbacks of when Facebook did free access to all citizens in particular countries. Later only to harvest data and manipulate elections.
While i agree for the most part, they can only cut the middle man so many times before they get themselves in antitrust trouble.
I suspect that will happen faster than they'd like, because regulators (at least outside the US) are not interested in a repeat of Google/Amazon/Facebook/etc.
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