Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

AI: The ROI Runway Could Be Long Outside the Tech Sector

apollo.com

Post reply on HN
Print view View original

21–30 of 97 posts

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#21

Post by fc417fc802 »

ares623 wrote: post #12
degamad wrote: post #10

Earlier quoted context omitted.

Hypothetical: Pepsi starts using AI in some magical way that allows them to increase their margins. This allows them to reduce prices while increasing profits. Price-sensitive customers switch from Coca Cola products to Pepsi products. Coca Cola loses some market share, reducing economies of scale, and reducing margins, thus reducing profits. As the cycle repeats, Pepsi moves to dominate the market, and Coca Cola is…

Ah yes, magical hypotheticals

Do you have a constructive objection to the described market dynamic?

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#22

Post by rybosworld »

One thing I can't square: if the cost to build an application goes to zero, we should see a proliferation of apps, especially from the AI labs.

The fact that we aren't seeing an app explosion (I think) is evidence that building applications people will pay for is significantly more complex than just prompting claude/codex/etc

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#23

Post by mattnewton »

rybosworld wrote: post #22

One thing I can't square: if the cost to build an application goes to zero, we should see a proliferation of apps, especially from the AI labs. The fact that we aren't seeing an app explosion (I think) is evidence that building applications people will pay for is significantly more complex than just prompting claude/codex/etc

I think a) the labs are releasing very fast and b) why would they implement the long tail of app features when they can effectively sell tokens to every user to write their own version of the app, which is what is currently happening?

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#24

Post by pdimitar »

degamad wrote: post #10
beepbooptheory wrote: post #5

Earlier quoted context omitted.

What does this look like for any given company? Which margins will you be crushed by for not adopting?

Hypothetical: Pepsi starts using AI in some magical way that allows them to increase their margins. This allows them to reduce prices while increasing profits. Price-sensitive customers switch from Coca Cola products to Pepsi products. Coca Cola loses some market share, reducing economies of scale, and reducing margins, thus reducing profits. As the cycle repeats, Pepsi moves to dominate the market, and Coca Cola is…

Realistic and historically accurate:

Pepsi starts collecting the extra profits with zero price reductions.

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#25

Post by binarymax »

rybosworld wrote: post #22

One thing I can't square: if the cost to build an application goes to zero, we should see a proliferation of apps, especially from the AI labs. The fact that we aren't seeing an app explosion (I think) is evidence that building applications people will pay for is significantly more complex than just prompting claude/codex/etc

I am absolutely seeing an explosion in apps. The reason you might not see them is because the app explosion is entirely custom and in house.

I talked with a friend last week, who has never coded before in his life, who built an absolutely incredible fit-for-purpose app for his own job. He gave me a demo and it blew my mind. It will never go beyond his walls, and he will never buy SaaS that only kinda fits what he needs.

I see things like this happening. The proliferation isn't public because why sell it? Just build the thing to make your domain job easier and save thousands per month cancelling SaaS subs.

The ROI of AI is starting to show, but it isn't in terms of growth or selling new things - it's reducing spend across the board on software and tools.

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#26

Post by fzeroracer »

rybosworld wrote: post #22

One thing I can't square: if the cost to build an application goes to zero, we should see a proliferation of apps, especially from the AI labs. The fact that we aren't seeing an app explosion (I think) is evidence that building applications people will pay for is significantly more complex than just prompting claude/codex/etc

Speaking from my side of the industry (the gaming industry), we are seeing a massive increase in the number of games people are making. Above the growth that was already there.

The distinction is that the games being made are garbage, and I mean worse than shovelware garbage. It's actively made things much harder as someone that fancies himself an indie game curator because you gotta dig through more and more games to find stuff with actual people behind it.

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#27

Post by nstart »

mattnewton wrote: post #23
rybosworld wrote: post #22

One thing I can't square: if the cost to build an application goes to zero, we should see a proliferation of apps, especially from the AI labs. The fact that we aren't seeing an app explosion (I think) is evidence that building applications people will pay for is significantly more complex than just prompting claude/codex/etc

I think a) the labs are releasing very fast and b) why would they implement the long tail of app features when they can effectively sell tokens to every user to write their own version of the app, which is what is currently happening?

Because, as the gp pointed out, if the cost is least to the labs, then why not reap the benefits too?

Hypothetical. Assume you can in fact point agents at a tool and say "replicate it. Make no mistakes". You then have software being instantly copy-able.

Assume these agents can then be pointed to a customer feedback board in perpetuity and they autonomously upgrade the software over time. They analyze usage patterns and behave like PMs figuring out what to prune and what to build. Then the maintenance part of the stack also goes to zero.

Over time, the highest margin competitiveness will go to the distributor of the tokens. Aka the AI model makers.

In a world like that (which the frontier labs claim is within a year or two of happening) it feels like it's only a matter of time before they opt to own the entire stack down to the consumer apps. Kind of like Amazon deciding they want to knock off products doing well and then favour their own product over the original seller.

My guess is that if the capability arrives the only reason the frontier labs don't move to own the entire stack immediately is because of optics. Boil the frog instead.

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#28

Post by greggsy »

rybosworld wrote: post #22

One thing I can't square: if the cost to build an application goes to zero, we should see a proliferation of apps, especially from the AI labs. The fact that we aren't seeing an app explosion (I think) is evidence that building applications people will pay for is significantly more complex than just prompting claude/codex/etc

Anecdotally, Claude Code has prompted an explosion of open source projects and prototypes from self-starters. A lot of these are just hobby projects, but some of them genuinely fill a niche that was previously too complicated or unviable to develop otherwise.

Some of them have half baked financial models, but nobody will invest dollars backing a SaaS offering that could easily be replicated, or that could be made redundant tomorrow.

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#29

Post by pdimitar »

fc417fc802 wrote: post #21
ares623 wrote: post #12

Earlier quoted context omitted.

Ah yes, magical hypotheticals

Do you have a constructive objection to the described market dynamic?

Yes: historically this is not what I have observed businesses doing. They'd fight tooth and nail to reduce expenses for the fatter profits; cost savings are seldom if ever passed to consumers.

Re: AI: The ROI Runway Could Be Long Outside the Tech Sector

#30

Post by thegrim33 »

binarymax wrote: post #25
rybosworld wrote: post #22

One thing I can't square: if the cost to build an application goes to zero, we should see a proliferation of apps, especially from the AI labs. The fact that we aren't seeing an app explosion (I think) is evidence that building applications people will pay for is significantly more complex than just prompting claude/codex/etc

I am absolutely seeing an explosion in apps. The reason you might not see them is because the app explosion is entirely custom and in house. I talked with a friend last week, who has never coded before in his life, who built an absolutely incredible fit-for-purpose app for his own job. He gave me a demo and it blew my mind. It will never go beyond his walls, and he will never buy SaaS that only kinda fits what he nee…

From their profile, this person makes a living selling AI programming products, by the way. Who could have guessed. There's a pattern to be noticed, even.
Post reply on HN