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The beginning of scarcity in AI

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Re: The beginning of scarcity in AI

#201

Post by raw_anon_1111 »

wg0 wrote: post #70
solenoid0937 wrote: post #68

Earlier quoted context omitted.

OpenAI has an absurdly high valuation given their cash burn vs RRR. Anthropic's is far more reasonable. It makes no sense to lump these two companies together when talking about valuation. They have completely different financial dynamics

No matter how low and reasonably Anthropic is valued, don't think $200 Max plans are going to recoup the investment + some return on top because size of the software industry is not that huge and profit margins for AI inference aren't very high either.

And nor are they trying to. If you are spending $200 a month, you are a mere tolerated nuisance. The company I work for gives every developer a $5000 a month allowance to Claude and I think there are around 500-600 people eligible for it.

Re: The beginning of scarcity in AI

#202

Post by raw_anon_1111 »

christkv wrote: post #72
wg0 wrote: post #45

There's other side to it too. Whoever running and selling their own models with inference is invested into the last dime available in the market. Those valuations are already ridiculously high be it Anthropic or OpenAI to the tune of couple of trillion dollars easily if combind. All that investment is seeking return. Correct me if I'm wrong. Developers and software companies are the only serious users because they (m…

It feels like a repeat of the dot com infrastructure buildup that spurred the whole 2005 explosion in affordable hosting and new companies. This will probably leave us massive access to affordable compute in a couple of years.

For power maybe. But the expected lifetime of GPU hardware is 3 years before they fail completely

Re: The beginning of scarcity in AI

#203

Post by bdangubic »

raw_anon_1111 wrote: post #201
wg0 wrote: post #70

Earlier quoted context omitted.

No matter how low and reasonably Anthropic is valued, don't think $200 Max plans are going to recoup the investment + some return on top because size of the software industry is not that huge and profit margins for AI inference aren't very high either.

And nor are they trying to. If you are spending $200 a month, you are a mere tolerated nuisance. The company I work for gives every developer a $5000 a month allowance to Claude and I think there are around 500-600 people eligible for it.

comments like these is probably while significant contingent of HN talks heavily about AI bubble. burning that kind of cash always ends up like the right move, godspeed :)

Re: The beginning of scarcity in AI

#204

Post by raw_anon_1111 »

bdangubic wrote: post #203
raw_anon_1111 wrote: post #201

Earlier quoted context omitted.

And nor are they trying to. If you are spending $200 a month, you are a mere tolerated nuisance. The company I work for gives every developer a $5000 a month allowance to Claude and I think there are around 500-600 people eligible for it.

comments like these is probably while significant contingent of HN talks heavily about AI bubble. burning that kind of cash always ends up like the right move, godspeed :)

I work for a consulting company, we know exactly how much each billable person makes the company and whether the ROI is worth it.

We don’t have to measure “productivity gains”.

I personally don’t come close to that and neither do I suspect most of us. Between using my $20 a month ChatGPT subscription with Codex and the amount of time I spend on Zoom calls “adding on to what Becky said” and “looking at things from the 1000 foot view”

On another note, the grunt work I use to delegate to a junior consultant, I now can get Claude to do in a fraction of the the time. They were making a lot more than the worse case of $72K a year fully allocated. But honestly most of that work is done with my $240 a year ChatGPT subscription + maybe $600 in Claude at the current prices/limits

Re: The beginning of scarcity in AI

#205

Post by Max-q »

Cthulhu_ wrote: post #159
prox wrote: post #128

Earlier quoted context omitted.

I also can’t wait for the time when few know how to code. Just like how many folks don’t know html from css when the homebrew website went away. Their might always be llms, but the dependence is an interesting topic.

Look no further to be honest; look at older generation programming languages like COBOL and how sought-after good developers for that language are. But I'm also afraid / certain that LLMs are able to figure out legacy code (as long as enough fits in their context window), so it's tenuous at best. Also, funny you mentioned HTML / CSS because for a while (...in the 90's / 2000's) it looked like nobody needed to actuall…

The issue with COBOL code is that it’s hidden. It’s mostly internal systems so little code available for training. HTML, TypeScript, JavaScript, C, etc, are readily available, billions of code lines.

Re: The beginning of scarcity in AI

#206

Post by chewz »

satvikpendem wrote: post #175
lelanthran wrote: post #172

Earlier quoted context omitted.

>> The companies that are entirely AI-dependent may need to raise prices dramatically as AI prices go up. > It's not that clear. Sure, hardware prices are going up due to the extremely tight supply, but AI models are also improving quickly to the point where a cheap mid-level model today does what the frontier model did a year ago. I agree; I got some coding value out of Qwen for $10/m (unlimited tokens); a nice harn…

GitHub Copilot is already $10 and I don't even use up the requests every month, it's the most bang for buck LLM service I've used.

Until May

Re: The beginning of scarcity in AI

#207

Post by bluecheese452 »

chewz wrote: post #160
zozbot234 wrote: post #117

Earlier quoted context omitted.

> The companies that are entirely AI-dependent may need to raise prices dramatically as AI prices go up. It's not that clear. Sure, hardware prices are going up due to the extremely tight supply, but AI models are also improving quickly to the point where a cheap mid-level model today does what the frontier model did a year ago. For the very largest models, I think the latter effect dominates quite easily.

We are processing same data for the last 2 years. Inference prices droped like 90 percent in that time (a combination of cheaper models, implicit caching, service levels, different providers and other optimizations). Quality went up. Quantity of results went up. Speed went up. Service level that we provide to our clients went up massively and justfied better deals. Headcount went down. What's not to like?

The headcount that went down probably isn’t too thrilled about it.

Re: The beginning of scarcity in AI

#208

Post by solenoid0937 »

wg0 wrote: post #196
solenoid0937 wrote: post #166

Earlier quoted context omitted.

Pro and Max plans are a tiny fraction of their revenue. Many businesses are spending thousands of dollars per head per month.

Really? Not challenging you, genuinely asking for more details. If that is true, I think AI is counterproductive from the bean counter's standpoint.

Not counterproductive because people aren't just sitting back in the rest of the time while AI does work. They do more work. $3k per head on Claude is nothing if your devs get 2x more work done.

Re: The beginning of scarcity in AI

#209

Post by chewz »

oeitho wrote: post #164
chewz wrote: post #160

Earlier quoted context omitted.

We are processing same data for the last 2 years. Inference prices droped like 90 percent in that time (a combination of cheaper models, implicit caching, service levels, different providers and other optimizations). Quality went up. Quantity of results went up. Speed went up. Service level that we provide to our clients went up massively and justfied better deals. Headcount went down. What's not to like?

The decline of independent thoughts for one. As people become reliant on LLMs to do their thinking for them and solve all problems that they stumble upon, they become a shell of their previous self. Sadly, this is already happening.

There is no decline. Human assets were always too expensive to process some additional information. We are simply processing lot more of low signal data.

Actually some of our analysts are empowered by the tools at their disposal. Their jobs are safe and necessary. Others were let go.

Clients are happy to get fuller picture of their universe, which drives more informed decissions . Everybody wins.

Re: The beginning of scarcity in AI

#210

Post by chewz »

bluecheese452 wrote: post #207
chewz wrote: post #160

Earlier quoted context omitted.

We are processing same data for the last 2 years. Inference prices droped like 90 percent in that time (a combination of cheaper models, implicit caching, service levels, different providers and other optimizations). Quality went up. Quantity of results went up. Speed went up. Service level that we provide to our clients went up massively and justfied better deals. Headcount went down. What's not to like?

The headcount that went down probably isn’t too thrilled about it.

Yes, probably. But the others gained skills and tools that made their jobs secure.
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