I think that tools like this have to operate on a subscription model like Cursor does in order to make any kind of sense for most users. The pay as you go model for agentic code tools makes you responsible for paying for:
* Whatever context the agent decides to pull in.
* However many iterations the model decides to run.
* Any result you get, regardless of how bad it is.
With pay as you go, the tool developer has no incentive to minimize any of these costs—they get paid more if it's inefficient, as long as it's not so inefficient that no one uses it. They don't even need it to be especially popular, they just need some subset of the population to decide that costs don't matter (i.e. those with Silicon Valley salaries).
With Cursor's model of slow and fast queries, they are taking responsibility for ensuring that the agents are as cost efficient as possible. The more efficient the agent the larger their cut. The fewer times that people have to ask a question a second time, the larger their cut. This can incentivize cutting corners, but that somewhat balanced out by the need to keep people renewing their subscription, and on the whole for most users it's better to have a flat subscription price and a company that's optimizing their costs than to have a pay-as-you-go model and a company that has no incentive to improve efficiency.
I think this core business model question is happening at all levels in these companies. Each time the model goes in the wrong direction, and I stop it - or I need to go back and reset context and try again - I get charged. The thing is, this is actually a useful and productive way to work sometimes. Like when pairing with another developer, you need to be able to interrupt each other, or even try something and fail.
I don't mind paying per-request, but I can't help but think the daily API revenue graph at Cursor is going up whenever they have released a change that trips up development and forces users to intervene or retry things. And of course that's balanced by churn if users get frustrated and stop or leave. But no product team wants to have that situation.
In the end I think developers will want to pay a fair and predictable price for a product that does a good job most of the time. I don't personally care about switching models, I tend to gravitate towards the one that works best for me. Eventually, I think most coding models will soon be good at most things and the prices will go down. Where will that leave the tool vendors?
I am afraid that the endgame of programming will be who has the biggest budget for an LLM, further consolidating programming to megacorps and raising barrier to entry.
* Whatever context the agent decides to pull in.
* However many iterations the model decides to run.
* Any result you get, regardless of how bad it is.
With pay as you go, the tool developer has no incentive to minimize any of these costs—they get paid more if it's inefficient, as long as it's not so inefficient that no one uses it. They don't even need it to be especially popular, they just need some subset of the population to decide that costs don't matter (i.e. those with Silicon Valley salaries).
With Cursor's model of slow and fast queries, they are taking responsibility for ensuring that the agents are as cost efficient as possible. The more efficient the agent the larger their cut. The fewer times that people have to ask a question a second time, the larger their cut. This can incentivize cutting corners, but that somewhat balanced out by the need to keep people renewing their subscription, and on the whole for most users it's better to have a flat subscription price and a company that's optimizing their costs than to have a pay-as-you-go model and a company that has no incentive to improve efficiency.