There’s a lot of issues with that analysis.

Oh and they own a t-shirt factory

The linked article literally states that they partnered with a small print shop, not that they own it. It says they bought warehouse space to store and fulfill orders. Now granted, yes, spending that much money on T-shirts can be a bad idea financially, but they do act as marketing because they get people talking, even if the brand name isn’t on the shirt. This recoups the cost over time.

Kagi also heavily relies on organic marketing, so it makes total sense.

First of all, as a project, Kagi stretches itself way too thin. “Kagi” isn’t just Kagi Search, it’s also a whole slew of AI tools, a Mac-only web browser called Orion, and right now they are planning on launching an email service as well.

The AI tools are easily deployed and based on standard open-source tooling. Not that hard to maintain, yet their AI integrations are genuinely much better than the competition, which draws in a lot of people who pay for their higher-priced plan just for heavy AI users.

Orion is a fork, with minimal additional bloat. Again, not terribly hard to maintain.

None of these projects are particularly profitable, so it’s not a case of one subsidizing the other

Their entire business model is based around a subscription. No individual service is “profitable,” it’s just “part of what you get for your subscription.”

and when they announced Kagi Email even their most dedicated userbase (aka the types who hang around in a discord for a search engine) seemed largely disinterested.

Granted, though the hardest part for this is just making a frontend, which they’ve already done. There are many free and open source backends for hosting email services. They haven’t promoted it heavily, and my assumption is because they’re keeping it more on the down-low until they fix bugs, build out more features, and are sure it’s something they can more heavily advertise.

Kagi was not paying sales tax for two years and they finally have to pay up. They just…didn’t do it. Didn’t think it was important? I have no idea why. Their reactions made it sound like they owed previous taxes, not that they just now had to pay them. They genuinely made it sound like they only just now realized they needed to figure out sales tax. It’s a baffling thing to me and it meant a change in prices for users that some people were not thrilled with.

And they later explained it’s because there’s a threshold of buyers you have to pass before paying sales tax, and they did not know if they would ever pass that mark, and later had to scramble due to new user growth to make that happen.

Like most search now Kagi has chosen to include Instant Answers that are AI generated, which means they’re often wrong

The vast majority of my answers from Kagi’s AI were right, when other search engines were all wrong. (yes, I did actually check real sources to confirm) This is just a strawman of reality. Kagi even shows you what % of the LLM’s response was derived from which source, whereas others leave you in the dark.

But the developers of Kagi fully believe that this is what search engines should be, a bunch of AI tools so that you don’t even need to read primary sources anymore.

Oh, is that why Kagi said in the post also linked by the author of that post: “Large language models (LLMs) should not be blindly trusted to provide factual information accurately. They have a significant risk of generating incorrect information or fabricating details”, “AI should be used to enhance the search experience, not to create it or replace it”, and “AI should be used to the extent that it enhances our humanity, not diminish it (AI should be used to support users, not replace them)”

I’m not gonna keep going through every single thing point-by-point here since that’d take forever, but a lot of this is basically just taking minor issues, like the CEO posting about hopeful uses of AI, or talking about completely normal expectations to have of privacy when you trust a company with information, then blowing it out of proportion and acting as though this is a death blow for the service.

The author of the post quite literally talks about how “Kagi’s dedication to privacy falls apart for me”, saying they don’t seem to actually care about user privacy… when just a few months later, they released Privacy Pass, which allows you to cryptographically prove you have a membership without revealing your identity, and to continue using Kagi that way. Not really something someone who doesn’t care about privacy would do.

Overall, this just reads to me as:

1. They could be doing bad financially because of these decisions I didn’t like them doing
2. Okay so they said they were profitable currently even after all that but now they’re doing too many things (which could all bring in new users that would pay them)
3. Okay so people are paying for and using the things but there’s no way they could possibly use AI in any good way
4. I’ve now ignored anybody saying the tools are actually better than others or are working well, but just in case you’re not convinced, they don’t care about privacy!
5. I know they explained the ways in which companies are going to get data on you and there is going to be a degree of trust when using a service that requires things like payment information but I still think they don’t actually care about privacy!

I’m not saying all the points are completely false or don’t mean anything, but a lot of this really does feel like just taking something relatively small (giving out a bunch of T-shirts during a time the company is primarily trying to grow its user count via organic marketing), acting as though it’s both the current and permanent future position of the entire company and will also lead to the worst possible outcome, then moving on to another thing, and doing that until there’s nothing left to complain about.

Kagi can have its own problems, but a lot of these just aren’t it.

As a person using Kagi myself:

1. The search results are the best I’ve ever had. period, full stop.
2. The AI models are commonly correct, good at citing sources, out of the way till you ask for them, and feel secondary to the search experience
3. The cost is more than reasonable
4. Regular small updates with new tools have been incredibly nice to have (such as the Kagi news feed, which is great at sourcing good news from a variety of sources, or the Universal Summarizer, which is great at providing alternative, more natural sounding and accurate translations compared to Google Translate or DeepL)

I haven’t really had any complaints, and contrasting it with this guy’s post, it just reads like someone complaining about something they’ve never even used. Yes, you can complain about something you haven’t yourself used, but the entire post is just “here’s anything even minor that I think could be an issue if it were taken to the extremes”

Yeah Ive seen those articles too. Yet even new social media like blue sky supports rss without an account. Everything on the fediverse does too. Its fantastic.