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AI adoption and Solow's productivity paradox

fortune.com

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Re: AI adoption and Solow's productivity paradox

#61

Post by simonw »

gruez wrote: post #46
torben-friis wrote: post #42

Earlier quoted context omitted.

The comparison seems flawed in terms of cost. A Claude subscription is 20 bucks per worker if using personal accounts billed to the company, which is not very far from common office tools like slack. Onboarding a worker to Claude or ChatGPT is ridiculously easy compared to teaching a 1970’s manual office worker to use an early computer. Larger implementations like automating customer service might be more costly, but…

How viable are the $20/month subscriptions for actual work and are they loss making for Anthropic? I've heard both of people needing to get higher tiers to get anything done in Claude Code and also that the subscriptions are (heavily?) subsidized by Anthropic, so the "just another $20 SaaS" argument doesn't sound too good.

I am confident that Anthropic make revenue from that $20 than the electricity and server costs needed to serve that customer.

Claude Code has rate limits for a reason: I expect they are carefully designed to ensure that the average user doesn't end up losing Anthropic money, and that even extreme heavy users don't cause big enough losses for it to be a problem.

Everything I've heard makes me believe the margins on inference are quite high. The AI labs lose money because of the R&D and training costs, not because they're giving electricity and server operational costs away for free.

Re: AI adoption and Solow's productivity paradox

#62

Post by arctic-true »

DaedalusII wrote: post #17
sebmellen wrote: post #12

The thing with a lot of white collar work is that the thinking/talking is often the majority of the work… unlike coding, where thinking is (or, used to be, pre-agent) a smaller percentage of the time consumed. Writing the software, which is essentially working through how to implement the thought, used to take a much larger percentage of the overall time consumed from thought to completion. Other white collar busines…

when the work involves navigating a bunch of rules with very ambiguous syntax, AI will automate them to the point computers automated rules based systems with very precise syntax in the 1990s https://hazel.ai/tax-planning this software (which i am not related to or promoting) is better at investment planning and tax planning than over 90% of RIAs in the US. It will automate RIA to the point that trading software auto…

You could have beaten the returns of most financial professionals over the last several years by just parking your money in the S&P 500, and yet plenty of people are still making a lucrative career out of underperforming it. In some fields, “being better and cheaper” does not always spell victory.

Re: AI adoption and Solow's productivity paradox

#63

Post by fn-mote »

mr_toad wrote: post #38
bubblewand wrote: post #7

My company’s behind the curve, just got nudged today that I should make sure my AI use numbers aren’t low enough to stand out or I may have a bad time. Reckon we’re minimum six months from “oh whoops that was a waste of money”, maybe even a year. (Unless the AI market very publicly crashes first)

So management basically have no clue and want you to figure out how to use AI? Do they also make you write your own performance review and set your own objectives?

Look, to make something productive out of it: a job seeker who has high level skills using LLM assistance will be much more valuable than one without the experience. Never mind your current company mangement's policies.

Re: AI adoption and Solow's productivity paradox

#64

Post by abraxas »

torben-friis wrote: post #42
crazygringo wrote: post #21

Just to be clear, the article is NOT criticizing this. To the contrary, it's presenting it as expected , thanks to Solow's productivity paradox [1]. Which is that information technology similarly (and seemingly shockingly) didn't produce any net economic gains in the 1970's or 1980's despite all the computerization. It wasn't until the mid-to-late 1990's that information technology finally started to show clear benef…

The comparison seems flawed in terms of cost. A Claude subscription is 20 bucks per worker if using personal accounts billed to the company, which is not very far from common office tools like slack. Onboarding a worker to Claude or ChatGPT is ridiculously easy compared to teaching a 1970’s manual office worker to use an early computer. Larger implementations like automating customer service might be more costly, but…

What if LLMs are optimizing the average office worker's productivity but the work itself simply has no discernable economic value? This is argued at length in Grebber's Bullshit Jobs essay and book.

Re: AI adoption and Solow's productivity paradox

#65

Post by simonw »

amrocha wrote: post #49
Herring wrote: post #35

Earlier quoted context omitted.

> 4% of GitHub public commits are being authored by Claude Code right now. At the current trajectory, we believe that Claude Code will be 20%+ of all daily commits by the end of 2026. https://newsletter.semianalysis.com/p/claude-code-is-the-inf...

There’s lots of slop out there, that doesn’t mean it’s actually good or useful code.

Keep moving those goal posts.

Re: AI adoption and Solow's productivity paradox

#66

Post by calvinmorrison »

crazygringo wrote: post #21

Just to be clear, the article is NOT criticizing this. To the contrary, it's presenting it as expected , thanks to Solow's productivity paradox [1]. Which is that information technology similarly (and seemingly shockingly) didn't produce any net economic gains in the 1970's or 1980's despite all the computerization. It wasn't until the mid-to-late 1990's that information technology finally started to show clear benef…

> it's helping lots of people, but it's also costing an extraordinary amount of money

Is it fair to say that wall street is betting America's collective pensions on AI...

Re: AI adoption and Solow's productivity paradox

#67

Post by afavour »

amrocha wrote: post #52
com2kid wrote: post #40

Earlier quoted context omitted.

Seemingly every day on Show HN? Also small businesses aren't going to publish blog posts saying "we saved $500 on graphic design this week!"

Is saving 500$ by generating some shitty AI art the bar? I thought this supposed to replace entire departments

Someone asked “where are all the small businesses”, this was a reply to that. Small businesses don’t have entire art departments.

Re: AI adoption and Solow's productivity paradox

#68

Post by Esophagus4 »

simonw wrote: post #61
gruez wrote: post #46

Earlier quoted context omitted.

How viable are the $20/month subscriptions for actual work and are they loss making for Anthropic? I've heard both of people needing to get higher tiers to get anything done in Claude Code and also that the subscriptions are (heavily?) subsidized by Anthropic, so the "just another $20 SaaS" argument doesn't sound too good.

I am confident that Anthropic make revenue from that $20 than the electricity and server costs needed to serve that customer. Claude Code has rate limits for a reason: I expect they are carefully designed to ensure that the average user doesn't end up losing Anthropic money, and that even extreme heavy users don't cause big enough losses for it to be a problem. Everything I've heard makes me believe the margins on in…

I always assumed that with inference being so cheap, my subscription fees were paying for training costs, not inference.

Re: AI adoption and Solow's productivity paradox

#69

Post by moregrist »

Banditoz wrote: post #24
jeron wrote: post #5

Earlier quoted context omitted.

it turns out it's really hard to get a man to fish with a pole when you don't teach them how to use the reel

If AGI is coming, won't there just be autofishers and no one will ever have to fish again, completely devaluing one's fishing knowledge and the effort put in to learn it?

It’s not a great analogy but...

“Autofishers” are large boats with nets that bring in fish in vast quantities that you then buy at a wholesale market, a supermarket a bit later, or they flash freeze and sell it to you over the next 6-9 months.

Yet there’s still a thriving industry selling fishing gear. Because people like to fish. And because you can rarely buy fish as fresh as what you catch yourself.

Again, it’s not a great analogy, but I dunno. I doubt AGI, if it does come, will end up working the way people think it will.

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