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Are the costs of AI agents also rising exponentially? (2025)

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Re: Are the costs of AI agents also rising exponentially? (2025)

#101

Post by zipy124 »

segmondy wrote: post #100
zipy124 wrote: post #78

The crazy part about this is if you compare it not to US wages but european, for instance in the UK where the median software hourly wage is somewhere around $35-40 an hour, then humans are already cheaper than the best models.

Humans are not cheaper than AI models. Let's go with $35 an hour. 24 365 = 8760 8760 $35 = $306,600 Yeah, a human working non stop will run $300k. Now you said, the "best" models. I personally reckon that 80-90% of most work don't need the best models. They need a good model, and good models are super cheap. i.e, the tiny gemma4 or qwen3.6 models will be sufficient for most of those work. AI cloud usage cost goes up…

I'm going by the graph in the original artical, not stating a point. I mean if their cost lines on the graph are to be believed, then the number I quoted is cheaper.

Re: Are the costs of AI agents also rising exponentially? (2025)

#102

Post by avidiax »

raincole wrote: post #23
greenmilk wrote: post #4

Are any inference providers currently making profit (on inference, I know google makes money)?

All of them. It's simply impossible to sell tokens by usage at a loss now. You'll be arbitraged to death in a few days. It only makes sense to subsidize cost if you're selling a subscription.

How do you arbitrage closed weight models? Who would buy from a middle man at increased price? Who is offering Priceline but for tokens?

Re: Are the costs of AI agents also rising exponentially? (2025)

#103

Post by popcorncowboy »

nopinsight wrote: post #35
thelastgallon wrote: post #15

> On many task lengths (including those near their plateau) they cost 10 to 100 times as much per hour. For instance, Grok 4 is at $0.40 per hour at its sweet spot, but $13 per hour at the start of its final plateau. GPT-5 is about $13 per hour for tasks that take about 45 minutes, but $120 per hour for tasks that take 2 hours. And o3 actually costs $350 per hour (more than the human price) to achieve tasks at its fu…

Ord's frontier-cost argument is right as far as it goes, but the piece doesn't engage with the counter-trend: inference cost for a fixed capability level has been falling faster than Moore's law. Pushing the frontier will likely keep getting more expensive and concentrated among a few players, while the intelligence needed for more mundane tasks keeps getting cheaper. That raises a question: if practical-tier inferen…

> how does any company justify the ever-larger capex to push the frontier

AGI. [waves hands at the infinite money machine]

Re: Are the costs of AI agents also rising exponentially? (2025)

#105

Post by JAG_Ecalona »

The sweet spot thing is the real insight here and nobody seems to be talking about it.

Frontier models get hyped for their maximum task horizon, but that's also where they're 10-30x more expensive per hour than their optimal range. You're paying a massive premium for the hardest tasks and still failing half the time.

Honestly the practical takeaway is pretty boring: just break your work into smaller chunks. Not because the models can't handle longer tasks, but because the economics at shorter task lengths are just way better. The labs are racing to push the horizon out; the smart move for anyone actually paying the bills is to stay near the sweet spot and orchestrate from there.

Re: Are the costs of AI agents also rising exponentially? (2025)

#106

Post by drzaiusx11 »

JAG_Ecalona wrote: post #105

The sweet spot thing is the real insight here and nobody seems to be talking about it. Frontier models get hyped for their maximum task horizon, but that's also where they're 10-30x more expensive per hour than their optimal range. You're paying a massive premium for the hardest tasks and still failing half the time. Honestly the practical takeaway is pretty boring: just break your work into smaller chunks. Not becau…

Model specialization is in all likelihood going to be the way forward, both for cost and quality of output. Smaller, cheaper models specialized in their task domains. Many of the current model vendors are already (attempting) to do this under the hood.

Generalist models have similar problems as generalist humans. The proverbial "Jack of all trades, master of none."

That said, I've made my career as a generalist :)

Re: Are the costs of AI agents also rising exponentially? (2025)

#107

Post by drzaiusx11 »

allan_s wrote: post #80
zipy124 wrote: post #78

The crazy part about this is if you compare it not to US wages but european, for instance in the UK where the median software hourly wage is somewhere around $35-40 an hour, then humans are already cheaper than the best models.

that's what I'm telling my non-tech friends when they say "Looking to how fast AI progress and robotics, me as an electrician, will a robot soon take my job?" I reply to them "My job as a software engineer will be replaced sooner than yours, because for your job, the robot will be much more expensive than the minimal wave, and you don't need to buy a human"

I wouldn't discount the worries outside of tech however. A cheap human laborer that leans on AI to provide their checklist and described actions for tasks is definitely in scope to replace hard won hands on knowledge from experience in industry professionals. You no longer have to watch 30 YouTube videos to learn and distill a task as a layperson in a field involving manual labor.

I rebuilt my house from the studs, did my own electrical and plumbing, etc. This took a significant amount of training and research back in the day. I worked under my father for a decade before making this attempt. My father is a journeyman electrician and carpenter. I think any able bodied human could soon forgo much of that and simply get a breakdown of actions to perform in a particular order and get similar results.

Re: Are the costs of AI agents also rising exponentially? (2025)

#108

Post by mixermachine »

gjsman-1000 wrote: post #88
smusamashah wrote: post #82

Earlier quoted context omitted.

But isn't this happening here https://taalas.com/ already. They have a demo of llama running at 17000 tokens per second https://chatjimmy.ai/

With some research, that chip appears like it would cost about $300-$400 to manufacture, die only. For an 8B parameter model. Opus is estimated at 500B-2T parameters. At that scale you’re past reticle limits and need HBM and multi-die packaging, which means you’ve essentially built an inference ASIC (like Groq or Etched) rather than something categorically cheaper than GPUs. The “burned into silicon” advantage mostly…

The cutting edge, max size models will likely stay in the GPU space for a long time. But these models are not needed for most general requests. With a fine tuned 30B quantisized model you can serve a large portion of requests with around 32GB of RAM. Free users will likely only get these kinds of models.

At some point we will get these models in hardware and the cost per token will be minimal.

Re: Are the costs of AI agents also rising exponentially? (2025)

#109

Post by darepublic »

drzaiusx11 wrote: post #107
allan_s wrote: post #80

Earlier quoted context omitted.

that's what I'm telling my non-tech friends when they say "Looking to how fast AI progress and robotics, me as an electrician, will a robot soon take my job?" I reply to them "My job as a software engineer will be replaced sooner than yours, because for your job, the robot will be much more expensive than the minimal wave, and you don't need to buy a human"

I wouldn't discount the worries outside of tech however. A cheap human laborer that leans on AI to provide their checklist and described actions for tasks is definitely in scope to replace hard won hands on knowledge from experience in industry professionals. You no longer have to watch 30 YouTube videos to learn and distill a task as a layperson in a field involving manual labor. I rebuilt my house from the studs, d…

I tried to use gpt for various handy work. While it does help I don't think it can adequately substitute for hard won hands. Maybe next gen if you provide a video stream and the llm can view the exact situation. Even then though I wouldn't discount the difficulty of learning dexterity when you've been a coddled white collar worker your whole life

Re: Are the costs of AI agents also rising exponentially? (2025)

#110

Post by drzaiusx11 »

darepublic wrote: post #109
drzaiusx11 wrote: post #107

Earlier quoted context omitted.

I wouldn't discount the worries outside of tech however. A cheap human laborer that leans on AI to provide their checklist and described actions for tasks is definitely in scope to replace hard won hands on knowledge from experience in industry professionals. You no longer have to watch 30 YouTube videos to learn and distill a task as a layperson in a field involving manual labor. I rebuilt my house from the studs, d…

I tried to use gpt for various handy work. While it does help I don't think it can adequately substitute for hard won hands. Maybe next gen if you provide a video stream and the llm can view the exact situation. Even then though I wouldn't discount the difficulty of learning dexterity when you've been a coddled white collar worker your whole life

I wasn't suggesting white collar workers attempt blue collar work. I'm merely saying that cheap day laborers with basic experience won't have to lean on their industry mentorship model (journeyman etc) as much and can complete jobs on their own. On the cheap.

Today's models are insufficient for someone with 0 hands on experience, especially when limited to text modalities. However, I don't doubt the future ones you describe are coming though, if they're not already here.

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