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AI's Affordability Crisis

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Re: AI's Affordability Crisis

#411

Post by HDThoreaun »

dns_snek wrote: post #398
HDThoreaun wrote: post #240

Earlier quoted context omitted.

Marginal cost of nuclear is huge. Marginal cost of inference is much smaller. Capex in nuclear isn’t a fixed cost, it is the marginal cost.

The marginal cost of nuclear energy is 14-20% of the total cost according to pages 39,40 of [1]. The point I'm making is that claiming that AI labs would be profitable if only they could stop spending money on the only thing that makes them valuable is absurd. Frontier models are like a nuclear power plant that needs to be rebuilt from scratch every 24 months. Let's say that they paused R&D a year ago. It's June 2026…

The labs don’t have to stop r and d to become profitable. They just need more customers. This strategy doesn’t work in nuclear. Building a nuclear plant doesn’t mean you can scale it up to serve the whole world. Building an ai model does.

Re: AI's Affordability Crisis

#412

Post by player1234 »

CuriouslyC wrote: post #110
bayarearefugee wrote: post #82

Earlier quoted context omitted.

> it may underestimate the inference margins of Ant/OAI's API pricing. If true then why are neither Anthropic or OpenAI dropping their API pricing to gain market share when both are clearly doing all sorts of political and PR maneuvering to compete in a cutthroat market? Since they aren't dropping the API usage prices (and are in fact raising them in a lot of subtle ways) then one of these options almost has to be tr…

The training costs are very likely the reason. Dario has talked about how each individual model is profitable, but how the expenditure training the next generation of models makes it look like they're not profitable at any given moment in time, and I believe he's being honest about that. The market for open weight model hosting gives you an idea of the profitable price floor, it's pretty clear there's markup baked in…

[dead]

Re: AI's Affordability Crisis

#413

Post by HDThoreaun »

Grombobulous wrote: post #408
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…

Most companies these days are incredibly disciplined on spending. That’s one reason why corporations have record profits in the last few years. The level of efficiency is so high. That’s what makes the AI Wild West so fascinating to me. Companies just threw money at it out of fear of falling behind. Now, I think that fear has subsided at many companies. I always thought it was incredibly questionable that we were abl…

All the tokenmaxxing stuff was just management signaling that every single employee better be using AI or else. Now that everyones got the message its back to business of course

Re: AI's Affordability Crisis

#414

Post by HDThoreaun »

skydhash wrote: post #392
thisoneisreal wrote: post #304

Earlier quoted context omitted.

I hesitate to say this because I think the AI hype is generally overdone, but I was contemplating the other day how much I would recommend my employer spend on AI tooling for me based on my salary and it's got to be in the tens of thousands of dollars per year if I'm being honest. I'm a contractor. On my most recent client, I was able to learn a completely new domain and business, design a solution and build a full s…

> I'm a contractor. On my most recent client, I was able to learn a completely new domain and business, design a solution and build a full stack POC (a complicated one with technologies I had never used before) nearly singlehandedly in less than 2 months But did you do it well? It’s not a snack, but a question based on general observation that every is praising the process, but no comment on the outcome.

Who cares? The business paid. Software engineers often overestimate how much businesses care about doing a job well vs quickly/cheaply

Re: AI's Affordability Crisis

#415

Post by beepbooptheory »

simianwords wrote: post #405
mikgp wrote: post #395

Earlier quoted context omitted.

Ok, so one last question - I think folks like Ed Zitron are too much I. The bear camp, he’s “AI is useless” and I’m not there, I do think AI changes the game. But everyone has been comparing OpenAI and Anthropic to the dotcom bubble, but isn’t - The historical precedent on being able to capture value of a raw technology is not good. This is why the joke they promised us flying cars and we got ads. So everyone says “A…

Depends on what you mean by capture technology? The internet was "captured" by FAANG. What makes OpenAI different?

No one in FAANG was selling the internet itself.

Re: AI's Affordability Crisis

#416

Post by arikrahman »

jwrallie wrote: post #328
arikrahman wrote: post #319

Deepseek is practically free if you hit cache. Harnesses like reasonix help to alleviate the affordabiliy concern with opinionated oversight.

That is an area where the article did not touch, how realistic are token prices with Deepseek and the likes of it? Is it being subsidized?

It's not subsidized. Openrouter shows multiple providers for the model with American providers like Digital Ocean and Cloudflare. You can run the model yourself and see the unsubsidized cost is the same.

Re: AI's Affordability Crisis

#417

Post by ohazi »

Quarrelsome wrote: post #280
burningChrome wrote: post #200

Earlier quoted context omitted.

AFAIK nobody was collecting analytics. The one team I was working on had put out a goal of "30% more efficient" using AI tools. Its about as subject as you can get. We never got around to what exactly that meant before everything got shut down. Myself and several other devs were laughing about the whole thing. The company was so amped about what AI could do they never even bothered collecting any analytics that would…

30% is my new favourite stat. It seems to come up a lot, like the old "this work will take 6 months" that I was equally suspicious of back in the day.

Bender: "I'm 30% [XYZ]"

http://theinfosphere.org/Bender_Bending_Rodriguez#Compositio...

Re: AI's Affordability Crisis

#419

Post by skydhash »

HDThoreaun wrote: post #414
skydhash wrote: post #392

Earlier quoted context omitted.

> I'm a contractor. On my most recent client, I was able to learn a completely new domain and business, design a solution and build a full stack POC (a complicated one with technologies I had never used before) nearly singlehandedly in less than 2 months But did you do it well? It’s not a snack, but a question based on general observation that every is praising the process, but no comment on the outcome.

Who cares? The business paid. Software engineers often overestimate how much businesses care about doing a job well vs quickly/cheaply

> Who cares?

The future scapegoat, aka maintainer.

Re: AI's Affordability Crisis

#420

Post by energy123 »

N_Lens wrote: post #396
energy123 wrote: post #273

Earlier quoted context omitted.

The AI companies will be profitable if they ship the goods. Make AGI and companies will pay for it.

Your comment reminds me of when a friend was watching me play counter strike 1.6 and said “this game looks so easy, just point at the enemies’ heads and left click?”

I cannot fathom how my comment can be interpreted as implying that it's easy to make AGI. And you're not the only one reading it that way too. My comment laid out a hypothesis pertaining to a conditional. Not a statement that it's easy.
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