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When AI Costs More Than the Engineer

tomtunguz.com

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Re: When AI Costs More Than the Engineer

#71

Post by wongarsu »

Using Anthropic in the comparison is obviously bullshit. That's like mentioning that a local construction company spends more on concrete and timber than on workers, but framing it as if they were spending more on power tools than on their employees

But even ignoring that: if AI was making Engineers 10x more productive (bear with me), wouldn't spending 2x the engineers salary on AI be the rational thing to do. In effect, what we are seeing here is a crude proxy for the benefit each company sees in AI. Whether that benefit is real or only in manager's heads is a different thing these numbers can't tell us

Re: When AI Costs More Than the Engineer

#72

Post by kuboble »

HaphazardGuess wrote: post #66

A.I suffers from the last-mile problem. It can do 90% of the work in 20 minutes but then the remaining 10% ends up taking 20 million hours to actually finish. It frustrating to the point that I sometimes want to throw the whole thing out and start from scratch.

That has been my experience at the beginning, but not anymore.

I have developed some intuition of how large tasks I can give it so that it will complete them well, probably erring on the conservative side.

I am using it daily for all my code writing and honestly don't remember the last time I had the feeling that I had to spend a lot of work to get the last few % done.

Re: When AI Costs More Than the Engineer

#73

Post by debugnik »

arjie wrote: post #47
seasox wrote: post #33

Earlier quoted context omitted.

VC mostly, since Anthropic is not profitable.

That's about to change: https://www.wsj.com/tech/ai/mind-blowing-growth-is-about-to-... Anthropic was profitable last quarter.

xAI is discounting the first few months of their rental to Anthropic, which will help them seem profitable for a bit longer. We'll need to see if that lasts.

Re: When AI Costs More Than the Engineer

#74

Post by DanielHB »

_pdp_ wrote: post #67

Even if the current generation of frontier models becomes 10x cheaper, companies will still end up spending much more per employee than they do today. Lower prices will not reduce AI spend. They will simply increase usage. There is no real ceiling on how much companies can delegate to AI. The only limit is the floor where spend too little, and you simply stop being competitive.

My company recently got a ton of AI credits on Linear and they are testing out this feature where whenever an issue is created in linear, it triggers an AI agent to automatically fix the issue. The idea is that when the dev gets to it, he will just check the preview-URL or run unit tests and rubber-stamp the PR.

It is unlikely this kind of agentic workflow will ever get cheaper. Agents get stuck in doom-loops quite often, just burning tokens without any value. Especially by prompts created by people unfamiliar with the codebase.

And it is becoming increasingly obvious that better models just use more tokens (and take longer to execute on prompts). So this kind of human-out-of-the-loop workflows will be forced to use cheaper models and be time-gated in order to not waste tokens. And then they will also produce worse results than a manual change or a more powerful model...

If tokens get cheaper you just put a better model for this kind of problem and let it run for longer.

But what is more insane is that we are using a ton of cloud VM time on top of a ton of tokens just to save a few minutes from a developer doing the same on his machine...

I don't think my company will keep this system once the free credits run out once they realize how much it actually costs.

Re: When AI Costs More Than the Engineer

#75

Post by stavros »

ErroneousBosh wrote: post #34
iLoveOncall wrote: post #7

Earlier quoted context omitted.

OpenAI and Anthropic aren't charities, so whatever cost they inccur for training will be passed down to the companies using the models. So you absolute should include it.

Why can't we pass on the costs of OpenAI and Anthropic's training back to OpenAI and Anthropic? Bandwidth isn't free, and all my life I've been told that piracy is theft.

Because the money that OpenAI and Anthropic have to pay those costs with comes from the users who pay for the service. There is no "passing the cost" of anything. The consumer always pays all costs.

Re: When AI Costs More Than the Engineer

#76

Post by DanielHB »

sevenzero wrote: post #32
brown_munda wrote: post #15

Mr. Mark Zuckerberg is particularly not happy about these stats. He was promised something else and he has already fired like half of the company. It is really crazy people didn't think this through.

I think its a fallacy to believe people like Zuckerberg or any other stupidly rich person aren't extremely calculative about this. I am very sure they have surrounded themselves by top tier engineers making very informed decisions while their top tier marketing teams make very calculated decisions on how its expressed to the public. The public generally is NOT in favor of AI outside of tech circles so it makes sense…

Executives are salivating at the prospect of AI being able to execute their plans instead of real humans. It is not even about human payroll cost, you can just tell that many higher up executives just complain about how hard it is to steer the ship and get people to work on the right things.

Unfortunately they also don't realize just how much decision-making real people do lower down the org-chart. Critical decisions are often done by the leaf nodes, often without even discussing it internally with the leaf-node team. AI will likely not be very good at this kind of decision making or realize any decision needs to be made at all.

Re: When AI Costs More Than the Engineer

#77

Post by yurishimo »

HaphazardGuess wrote: post #66

A.I suffers from the last-mile problem. It can do 90% of the work in 20 minutes but then the remaining 10% ends up taking 20 million hours to actually finish. It frustrating to the point that I sometimes want to throw the whole thing out and start from scratch.

Some people would argue that this is the best way to use AI as it exists today. Generate a POC and then if that POC makes sense, then rebuild it from scratch by hand. Maybe you can still use AI for a bit of boilerplate generation, but you should write all of the business logic and verify it by hand.

Personally, I'm starting to lean more and more towards this approach.

Though, I have to admit, for a well defined bug ticket, AI can be super useful to knock those out.

Re: When AI Costs More Than the Engineer

#79

Post by nylonstrung »

est31 wrote: post #61
littlecranky67 wrote: post #50

Earlier quoted context omitted.

I wonder if they ever will be. If the chinese open source models are only 3-6 months behind every major frontier model release, I can't see the business model. GLM-5.2 is supposedly on par to Opus depending on the case. And everybody and their mother can run that model in their datacenter and charge Dollars for tokens.

There is distillation going on where chinese providers give the model lots of outputs. We don't live in a world where chinese providers are not doing this so we can't compare the advantage of this distillation, but there is some advantage to it otherwise they wouldn't do it. If Anthropic can block distillations somehow (which are fair game imo given that Anthropic et al did the same with the written works of mankind)…

I think the panic around distillation misses the fact that US labs also benefit heavily from Chinese breakthroughs like Deepseek's work on sparsity, MoE and training architecture

It may be that US labs use Chinese models for distillation but we'd ofc never know because they can host the models themselves

Re: When AI Costs More Than the Engineer

#80

Post by psychoslave »

croisillon wrote: post #52
psychoslave wrote: post #6

Earlier quoted context omitted.

Apples and potatoes are both something people will need to eat if we want to see it from the human utility perspective, and they both require some land space to be allocated for their culture (though one can of course conjugate both culture). If you want to take the DDG LLM summary at fate value, apples are lower in calories and sugar but higher in fiber compared to potatoes, which are richer in vitamins and minerals…

the saying "comparing x and y" implies that you compare something that one of them can't compete ; if people praise the softness of the skin first and foremost, comparing apples and potatoes won't lead interesting results

Yes, that’s certainly what people mean generally. Now if we consider perspectives like the one elaborated by Marcel Detienne in Comparer l'incomparable[1], we can go a bit further.

The comparison no longer starts with the goal to assess distinct objects in the frame of a given more or less established framework, and instead our attention is framed toward challenging ourself. That is, anchored toward finding what frameworks would allow to assess anything meaningful. And latter on, what does frameworks and framework creation reveals about ourself.

[1] https://archive.org/details/comparerlincompa0000deti

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