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AI's Affordability Crisis

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Re: AI's Affordability Crisis

#381

Post by imtringued »

pchristensen wrote: post #339
bluefirebrand wrote: post #318

Earlier quoted context omitted.

> 10% of a developer's cost is something like $4000/month What company pays developers $40000/month and are they hiring?

A company's fully loaded cost (payroll taxes, insurance, fixed company costs, infra, real estate, etc) is usually about double the employee's salary. Half of $40k is 20k/mo, which is ~$250k/hr. That's a lot but very in-bounds for software engineering salaries.

$250k/hour is half a billion USD per year. Nobody is paid that much.

Based on such a basic mistake, I wouldn't trust the rest of your comment. Everything you listed feels like made up arbitrary excuses. Most of the overhead per employee is fixed, that doubling rule of thumb is assuming an employee with a salary closer to the median. At the salary you're claiming, the overhead shrinks to something like 30% on top of the base salary.

If anyone took your numbers seriously they would run into the weird conclusion that an employee paid $50k actually costs a company $300k. That's the type of math error you're doing here.

Re: AI's Affordability Crisis

#382

Post by puritanicdev »

burningChrome wrote: post #176
steveBK123 wrote: post #44

I think the biggest problem is not necessarily the cost to develop & serve the models, but how quickly user behavior changed with token based pricing. I know a lot of people at companies where the marching orders changed on a dime end of Q1/start of Q2. These are shops that were fully on the "use AI or die (because we will fire you)" train. Now there's monitoring, reporting, alerting not just on overall cost but on "…

I can give you some additional anecdotal evidence to support your comment. I work at a Fortune 200 company. At first, it was the Wild West. Need an LLM? You got it. Need to or want to build an army of agents? Done and done. We literally had everything at the tips of fingers for about 3 months. Teams were building their own internal tools, the team I work on canceled contracts with several software vendors because tea…

Probably a stupid question, but isn't giving developers $200 for a Max x20 subscription cheaper than using the API? I was discussing Claude's monthly bills with some friends recently. Most of us are in the $700-$1000 range, and I don't feel like I really spend that much. I have a Max x20 personal account, and I do a ton of work for my side projects through it.

Re: AI's Affordability Crisis

#383

Post by imrehg »

puritanicdev wrote: post #382
burningChrome wrote: post #176

Earlier quoted context omitted.

I can give you some additional anecdotal evidence to support your comment. I work at a Fortune 200 company. At first, it was the Wild West. Need an LLM? You got it. Need to or want to build an army of agents? Done and done. We literally had everything at the tips of fingers for about 3 months. Teams were building their own internal tools, the team I work on canceled contracts with several software vendors because tea…

Probably a stupid question, but isn't giving developers $200 for a Max x20 subscription cheaper than using the API? I was discussing Claude's monthly bills with some friends recently. Most of us are in the $700-$1000 range, and I don't feel like I really spend that much. I have a Max x20 personal account, and I do a ton of work for my side projects through it.

Above a certain size you cannot get the quota-based models.

In my org, as our Team account (quota-based) was growing, to onboard more people we _had to_ switch to Enterprise (and thus API-based costs). The switch and now cost visibility really drives home the "did this code review worth $15?" kinds of questions...

We are just building the monitoring and I think there will be a crack-down sooner rather than later.

I'm more "code as craft" person, so I'm mainly unaffected (plus found my favourite local LLMs to be the missing rubber ducky with no associated cost), butI cannot say the same for everyone else around.

Re: AI's Affordability Crisis

#384

Post by bcjdjsndon »

warkdarrior wrote: post #42
bcjdjsndon wrote: post #26

Earlier quoted context omitted.

> Can they scale the number of users on enterprise plans the way they did for coding but in a more general way for all knowledge jobs? Do these knowledge jobs have a significant corpus of not only knowledge but discussion and problem solving, all conveniently labelled for the AI to train on? Probably not. Coding has stack overflow, what does, say, advertising use?

> Coding has stack overflow, what does, say, advertising use? Advertising has centuries of print ads, 100 years of radio advertising, 70 years of TV commercials, etc. And modern AI does not necessarily need labeling.

My suspicion is coding agents didnt just train on source code but also on human discussions from message boards. There is no equivalent source for this data in advertising... That I know of. Any large scale question and answers boards pertaining to advertising, that have pretty much covered every common query of the past twenty years? If that exists, then I'm wrong.

Re: AI's Affordability Crisis

#385

Post by snackerblues »

HDBaseT wrote: post #343
asdff wrote: post #243

Earlier quoted context omitted.

This works for you because you were trained in The Old Way. Consider the people younger than you. Who are literally shutting their brain off so AI can cheat on their essays and exams. They aren't going to be good architects or code reviewers.

This is some "old man yells at cloud" nonsense. There will always be proficient programmers who can read and write good as good as yourself. I have 0 reason to believe programmers coming out of University today are any less competent than when you came out of University.

How about the reason he just explained? Do you disagree that relying on AI to make changes without knowing what it's doing makes you a worse programmer? How would it not?

If you don't know what a good or a bad approach to any problem is because you've never actually had to solve it, you can't even know what being a proficient programmer means, so how could you hope to be one?

Re: AI's Affordability Crisis

#386

Post by khurs »

OpenAI is attending the Cannes Ad Festival (the ad industries premium annual event) for the first time this year, alongside the usual ones like Meta and Google.

Appears that Chat will remain cheap as it can be supported by Ads revenue, coding tools will go up in price post IPO as less able to squeeze ads in?

>“We are clearly in the advertising business now,”

https://www.adexchanger.com/ai/at-its-first-ever-cannes-open...

Re: AI's Affordability Crisis

#387

Post by xdertz »

mkozlows wrote: post #300
Gigachad wrote: post #258

Earlier quoted context omitted.

Our company went from “AI AI AI” to “GitHub Copilot has been suspended due to exceeding the budget” with this month’s price increase.

If your company was giving you Copilot, they were never that far on board the AI train anyway.

Github Copilot lets you use Anthropic models. This is just a way for enterprises to fold this into their existing Microsoft contract instead of negotiating with a new vendor.

Re: AI's Affordability Crisis

#388

Post by starvar2 »

raincole wrote: post #69

> OpenAI Had $13.07 Billion In Revenue, $34 Billion In Costs and Expenses, and $20.92 Billion In Losses, with a net loss attributable to the company of $38.53 Billion This is going to be the new most misquoted/misunderstood data of the year, isn't it? The cost is mostly from a one-time accounting situation due to their pivot from a non-profit organization.[0] If we trust the leak [1] OpenAI is likely turning profitab…

It's not like they have an IPO coming... right?

Re: AI's Affordability Crisis

#389

Post by ido »

imtringued wrote: post #381
pchristensen wrote: post #339

Earlier quoted context omitted.

A company's fully loaded cost (payroll taxes, insurance, fixed company costs, infra, real estate, etc) is usually about double the employee's salary. Half of $40k is 20k/mo, which is ~$250k/hr. That's a lot but very in-bounds for software engineering salaries.

$250k/hour is half a billion USD per year. Nobody is paid that much. Based on such a basic mistake, I wouldn't trust the rest of your comment. Everything you listed feels like made up arbitrary excuses. Most of the overhead per employee is fixed, that doubling rule of thumb is assuming an employee with a salary closer to the median. At the salary you're claiming, the overhead shrinks to something like 30% on top of t…

> Based on such a basic mistake

The mistake of 'h' instead of 'y' typo?

Re: AI's Affordability Crisis

#390

Post by steveBK123 »

wseqyrku wrote: post #363
burningChrome wrote: post #176

Earlier quoted context omitted.

I can give you some additional anecdotal evidence to support your comment. I work at a Fortune 200 company. At first, it was the Wild West. Need an LLM? You got it. Need to or want to build an army of agents? Done and done. We literally had everything at the tips of fingers for about 3 months. Teams were building their own internal tools, the team I work on canceled contracts with several software vendors because tea…

You like to believe that these companies know what they're doing, they do not, I mean don't even try to find the logic behind their actions. They just follow the shiny things and then when it doesn't work, react by screwing up their employees. Their decisions age like milk on the countertop. After I got laid off a few month ago, I can't imagine myself working another 9 to 5. Because above all, it's an incredibly stup…

Right Eventually you realize companies are just a bunch of people making it up as they go along

Institutions are neither permanent nor superintelligent

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