"Analysts wrote that much of that revenue comes from month-to-month subscribers who may churn as quickly as they signed up, putting the durability of those flashy numbers in doubt. While these young companies have disclosed surging ARR, they could have "questionable economics," the analysts wrote, noting that sales gains like this could come from short-term subscribers who might not stick around."
"Back in August, I warned you about "inference whales" messing with the business models of vibe coding services. Heavy users racked up huge costs, forcing some leading startups to raise prices and make other changes to avoid big losses. Raising prices can dent user growth, that's for sure. The Barclays note highlighted recent traffic declines at several top vibe coding sites:"
AI-powered vibe coding platforms experienced a rapid summer surge in interest followed by a pronounced slowdown in both site visits and search activity. Several leading services report steep declines in traffic, with one platform down roughly 40% and another down about 64% since spring. A large share of recent revenue growth comes from month-to-month subscribers who can churn quickly, undermining the durability of annualized revenue figures. Heavy inference users created outsized cost pressure that led some companies to raise prices or change products, measures that can suppress user growth. The combined effects of churn and rising unit costs threaten long-term economics.
Read at Business Insider
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