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The AI Replaces Services Myth

aimode.substack.com

21–30 of 60 posts

Re: The AI Replaces Services Myth

#21
> Need an example? Good. Coding.

> You must be paying your software engineers around $100,000 yearly.

> Now that vibecoding is out there, when was the last time you committed to pay $100,000 to Lovable or Replit or Claude?

I think the author is attacking a bit of a strawman. Yes, people won't pay human prices for AI services.

But the opportunity is in democratization - becoming the dominant platform - and bundling - taking over more and more of the lifecycle.

Your customers individually spend less, but you get more customers, and each customer spends a little extra for better results.

To respond to the analogy: not everyone had $100,000 to build their SaaS before. Now everyone who has a $100 budget can buy Lovable, Replit and Claude subbscriptions. You only need 1,000 customers to match what you made before.

Re: The AI Replaces Services Myth

#22
> You have to start from how the reality works and then derive your work.

Every philosopher eventually came to the same realization: We don't have access to the world as it is. We have access to a model of the world as it predicts and is predicted by our senses. In so far as there is a correlation between the two in whatever fidelity we can muster, we are fated to direct access to a simulacrum.

For the most part they agree, but we have a serious flaw - our model inevitably influences our interpretation of our senses. This sometimes gets us into trouble when aspects of our model become self-reinforcing by framing sense input in ways that amplify the part of the model that confers the frame. For example, you live in a very different world if you search for and find confirmation for cynicism.

Arguing over metaphysical ontology is exemplified by kids fighting about which food (their favorite) is the best. It confuses subjectivity and objectivity. It might appear radical, but all frames are subjective even ones shared by the majority of others.

Sure, Schopenhauer's philosophy is the mirror of his own nature, but there is no escape hatch. There is no externality - no objective perch to rest on, even ones shared by others. That's not to say that all subjectivities are equally useful for navigating the world. Some models work better than others for prediction, control, and survival. But we should be clear that useful does not equate with truth, as all models are wrong, some are useful.

JC, I read the rest. The author doesn’t seem to grasp how profit actually works. Price and value are not welded together: you can sell something for more or less than the value it generates. Using his own example, if the AI and the human salesperson do the same work, their value is identical, independent of what each costs or commands in the market.

He seems wedded to a kind of market value realism, and from this shaky premise, he arrives at some bizarre conclusions.

Re: The AI Replaces Services Myth

#23
post #17

Do execs really dream of entirely removing their engineering departments? If this happens then I would expect some seriously large companies to fail in the future. For every good idea an exec has, they have X bad ideas that will cause problems and their engineers save them from those. Conversely an entirely AI engineering team will say "yes sir, right on it" to every request.

Yes, that is exactly how offshoring and enterprise consulting takes place.

.. and why they fail.

Re: The AI Replaces Services Myth

#27

Do execs really dream of entirely removing their engineering departments? If this happens then I would expect some seriously large companies to fail in the future. For every good idea an exec has, they have X bad ideas that will cause problems and their engineers save them from those. Conversely an entirely AI engineering team will say "yes sir, right on it" to every request.

Yes. Execs love AI because it’s the sycophant they need to massage their narcissism.

I’d really love to be replaced by AI. At that point I can take a few months off paid gardening leave before they are forced to rehire me.

Re: The AI Replaces Services Myth

#28
post #18

Earlier quoted context omitted.

Experience in industrial revolution, and factory automation.

So you mean in a hundred years it so? I don't think that is a good counter.

If you think the time is what matters from the history lesson, good luck.

Re: The AI Replaces Services Myth

#30
post #29

Earlier quoted context omitted.

.. and why they fail.

Apparently not, given that it is the bread and butter of Fortune 500 consulting.

The consultancies are successful. The customers aren’t usually quite as fortunate from experience.

A great example is the current Tata disaster in the UK with M&S.

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