High costs and thin margins threatening AI coding startups

Here is a 175-word summary of the news article: High costs and thin margins are threatening the viability of AI coding startups. According to a source familiar with the financials of one such startup, Windsurf, these companies are highly unprofitable. The primary challenge facing these startups is the high cost of the AI models they rely on, which can cost millions to develop and maintain. Additionally, the margins on their products are razor-thin, as they must compete with free and open-source alternatives. As a result, many AI coding startups are struggling to achieve profitability and sustainable growth. Some have resorted to layoffs and cost-cutting measures in an effort to stay afloat. The long-term future of the AI coding startup industry remains uncertain. Experts suggest that only the most well-funded and technologically advanced companies may be able to weather the current challenges and emerge as viable businesses in the long run.