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Companies rein in AI usage as costs strain budgets

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Re: Companies rein in AI usage as costs strain budgets

#31

Post by gortok »

danielvaughn wrote: post #3

We're in a dangerous valley where AI is _just_ good enough to fool some otherwise very smart people. Similar to the old adage of "a little bit of information is a dangerous thing." Lots of CEOs got duped into thinking that model capabilities were far ahead of where they actually were. I'm actually not sure if we're going to get out of the valley without figuring out a surefire way to reliably evaluate these things.

They got duped into it partly because of the enthusiasm and demoware shown by folks like the ones that topped HN with their exhortations about the wonders of AI for coding.

We’re not innocent bystanders here, and it’s important to recognize that. Our hype added to the hype. Our optimism added to the optimism. After layoffs due to Section 172 and interest rates going up, technologists were looking for a reason to be in-demand again, and generative AI as a platform specialization provided that.

We can’t now criticize CEOs for being taken in by the same enthusiasm we pushed for our own purposes.

Re: Companies rein in AI usage as costs strain budgets

#32

Post by ofjcihen »

simonw wrote: post #22
josefritzishere wrote: post #2

Companies are learning that even with mass layoffs, AI isn't worth what it costs for most use cases. This is an important inflection point because none of the AI companies are profitable, i.e. they're all still charging substantially less than what it costs to actually deliver the service. With things in that intermediate state, it's hard to know what a future stable state will be like.

If AI isn't worth what it costs why are some of these companies allowing $1,000+/employee/month?

The two that I know of are in a phase of trying to figure out what the return is.

Re: Companies rein in AI usage as costs strain budgets

#34

Post by elktown »

simonw wrote: post #22
josefritzishere wrote: post #2

Companies are learning that even with mass layoffs, AI isn't worth what it costs for most use cases. This is an important inflection point because none of the AI companies are profitable, i.e. they're all still charging substantially less than what it costs to actually deliver the service. With things in that intermediate state, it's hard to know what a future stable state will be like.

If AI isn't worth what it costs why are some of these companies allowing $1,000+/employee/month?

Because tech is so deeply hooked on fashion and short-termism that it’ll make both a Temu & Wall street exec blush in envy. LLMs floods both these receptors like the Great flood.

Re: Companies rein in AI usage as costs strain budgets

#35

Post by baq »

simonw wrote: post #20
sroerick wrote: post #4

I genuinely have no idea how some of these companies got so far over their skis on AI. It simply does not make sense to me.

I'm consistently burning over $100/day in Claude/OpenAI tokens using Codex and Claude - but I'm on the subscriptions so I'm only paying $100/month to each vendor. If I worked for a larger company that isn't allowed to use those subscriptions and has to pay list price I'd be costing them ~$2,000/month. Now times that by a large engineering team.

These companies already have laid people off or are preparing to.

Re: Companies rein in AI usage as costs strain budgets

#36

Post by dullcrisp »

gortok wrote: post #31
danielvaughn wrote: post #3

We're in a dangerous valley where AI is _just_ good enough to fool some otherwise very smart people. Similar to the old adage of "a little bit of information is a dangerous thing." Lots of CEOs got duped into thinking that model capabilities were far ahead of where they actually were. I'm actually not sure if we're going to get out of the valley without figuring out a surefire way to reliably evaluate these things.

They got duped into it partly because of the enthusiasm and demoware shown by folks like the ones that topped HN with their exhortations about the wonders of AI for coding. We’re not innocent bystanders here, and it’s important to recognize that. Our hype added to the hype. Our optimism added to the optimism. After layoffs due to Section 172 and interest rates going up, technologists were looking for a reason to be i…

I don’t know who you’re including in “we”, but since most CEOs are being paid more for their judgment than HN commenters are, it wouldn’t be unreasonable to hold them to higher standards.

Re: Companies rein in AI usage as costs strain budgets

#37

Post by nixpulvis »

I'm so frustrated by both the zealous AI bulls and the blind AI opposition.

There's a lot of issues, ranging over technical, cultural, environmental, and moral problems. But there's also obvious value. To say otherwise tells me you haven't actually tried to make use of these tools.

It's one thing to get an AI google response and feel like it's dubious, it's another thing to know what you want and have an LLM find the APIs for a framework you're not familiar with yet and put the pieces together. The only way I use AI for programming still involves a large amount of rejecting the responses and a massive amount of reading and validating.

Am I able to write things faster with LLMs, yes. Am I missing out on the work involved in learning things I would be forced to otherwise, also yes. Are coworkers pushing stuff they don't understand more, surely.

It's a mixed bag, and we need more balanced takes in the discussion around this.

Re: Companies rein in AI usage as costs strain budgets

#38

Post by afavour »

gortok wrote: post #31
danielvaughn wrote: post #3

We're in a dangerous valley where AI is _just_ good enough to fool some otherwise very smart people. Similar to the old adage of "a little bit of information is a dangerous thing." Lots of CEOs got duped into thinking that model capabilities were far ahead of where they actually were. I'm actually not sure if we're going to get out of the valley without figuring out a surefire way to reliably evaluate these things.

They got duped into it partly because of the enthusiasm and demoware shown by folks like the ones that topped HN with their exhortations about the wonders of AI for coding. We’re not innocent bystanders here, and it’s important to recognize that. Our hype added to the hype. Our optimism added to the optimism. After layoffs due to Section 172 and interest rates going up, technologists were looking for a reason to be i…

I don’t claim responsibility for any of that. I’m not part of that “we”. Time and time again I’ve been sceptical of AI on places like Hacker News and I’m hardly alone. As a community I think there is a great variation in opinion.

CEOs are very well compensated for the things they do. If they were led astray by snake oil salesman that does not make Hacker News as a community complicit. They were fooled when they shouldn’t have been and it’s their own fault.

Re: Companies rein in AI usage as costs strain budgets

#39

Post by jdiff »

gortok wrote: post #31
danielvaughn wrote: post #3

We're in a dangerous valley where AI is _just_ good enough to fool some otherwise very smart people. Similar to the old adage of "a little bit of information is a dangerous thing." Lots of CEOs got duped into thinking that model capabilities were far ahead of where they actually were. I'm actually not sure if we're going to get out of the valley without figuring out a surefire way to reliably evaluate these things.

They got duped into it partly because of the enthusiasm and demoware shown by folks like the ones that topped HN with their exhortations about the wonders of AI for coding. We’re not innocent bystanders here, and it’s important to recognize that. Our hype added to the hype. Our optimism added to the optimism. After layoffs due to Section 172 and interest rates going up, technologists were looking for a reason to be i…

What about the large contingent of resident wet rags? Can we still shit on the CEOs for not seeing through the BS and guiding their companies effectively?
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