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

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

#41

Post by QuercusMax »

runako wrote: post #34
thegrim33 wrote: post #30

Earlier quoted context omitted.

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.

Whether that person is talking their book or not, there absolutely has been an app explosion. Github & the app stores have all reported as much over the last year. I also have repeatedly experienced the phenomenon of nontechnical people having built custom software to run their businesses. A lawyer friend was first, sending me a link to his GitHub(!), where he has built a custom client intake/practice-management appl…

On the Home Assistant and Jellyfin reddits you'll see tons of vibecoded dashboards and plugins people are putting together - and those are just the ones people are sharing.

I personally have been building a bunch of little personal apps for my home that aren't worth the effort of sharing - like a customized dashboard of the Trimet buses closest to my house. The cost to build the initial good-enough version was literally 5 minutes plus another 10 to test and deploy.

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

#42

Post by binarymax »

thegrim33 wrote: post #30
binarymax wrote: post #25

Earlier quoted context omitted.

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.

Who’s “this person”…me? I don’t make a living selling AI programming products. I make a living building knowledge systems, mostly around search engines and data wrangling.

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

#43

Post by SoftTalker »

pdimitar wrote: post #24
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…

Realistic and historically accurate: Pepsi starts collecting the extra profits with zero price reductions.

sacrificing even more profits that may be had by undercutting coca-cola's price? The CEO would be fired.

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

#44

Post by SoftTalker »

fc417fc802 wrote: post #39
pdimitar wrote: post #24

Earlier quoted context omitted.

Realistic and historically accurate: Pepsi starts collecting the extra profits with zero price reductions.

In a duopoly, probably yes. However in a more competitive environment where several incumbents have achieved a given optimization a race to the bottom is likely to occur because it only takes one of them preferring to increase their relative market share to kick the process off.

The cola market is effectively a duopoly.

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

#45

Post by pdimitar »

SoftTalker wrote: post #43
pdimitar wrote: post #24

Earlier quoted context omitted.

Realistic and historically accurate: Pepsi starts collecting the extra profits with zero price reductions.

sacrificing even more profits that may be had by undercutting coca-cola's price? The CEO would be fired.

Really depends on the concrete numbers and the projections. You could be right, I could be right, I am only saying what I've witnessed historically in general. Greed trumps a lot of other fairly rational courses of action.

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

#46

Post by fc417fc802 »

zurtri wrote: post #38
Animats wrote: post #16

> If token costs converge toward zero for most AI use cases... In the real world, token costs seem to be going up, as early stage pricing at a loss gives way to pricing that generates revenue. Compute costs might go down a little over the next five years, but there's nothing coming along in hardware that leads to huge reductions in price. NVidia says don't expect better price/performance before 2030. The models keep…

This website https://tokenpriceindex.com/ tracks Token Cost. You are right - tokens are going up currently.

That chart is a blended metric though. I don't think anyone is using the latest and greatest frontier models (which seem to get more expensive with each generation) for mundane tasks that are solvable with existing models. It seems unreasonable to average deepseek v4 flash and fable pricing.

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

#47

Post by DangitBobby »

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 made an app for myself and the local MTB community for keeping track of rain and soil moisture for nearby trails so it's easier to decide when a trail will likely be open. Much more reliable than waiting for the official (volunteer led) organization to update the status. I never would have made it without an LLM to speed things along.

A good friend of mine helped his mom keep track of Meals On Wheels (or a similar volunteer org) orders, deliveries, cancellations, etc. They were managing all of this via paper before.

I compiled a list of online recipes. Then I had an LLM typeset them for me into a printable PDF and build a companion website with links to the original recipes and complete ingredient lists for shipping. had the LLM encode links for the companion site into QR codes so the printed copy of the cookbook would bring me immediately to a shopping list, making trying a new recipe soooo much less daunting.

There are so many little things like this that you can make that just take too much effort to justify otherwise. I have other ideas for personal projects that I'll probably get to some day.

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

#48

Post by DangitBobby »

SoftTalker wrote: post #43
pdimitar wrote: post #24

Earlier quoted context omitted.

Realistic and historically accurate: Pepsi starts collecting the extra profits with zero price reductions.

sacrificing even more profits that may be had by undercutting coca-cola's price? The CEO would be fired.

Markets generally don't follow Econ 101. There are effects beyond first order when it comes to pricing.

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

#49

Post by profsummergig »

decimalenough wrote: post #36
Animats wrote: post #16

> If token costs converge toward zero for most AI use cases... In the real world, token costs seem to be going up, as early stage pricing at a loss gives way to pricing that generates revenue. Compute costs might go down a little over the next five years, but there's nothing coming along in hardware that leads to huge reductions in price. NVidia says don't expect better price/performance before 2030. The models keep…

I've switched to non-SOTA models, which deliver comparable value at a fraction of the cost. A full day of coding with Deepseek is approx $1 in tokens, and at least for my use cases the quality is equivalent to Claude.

If you don't mind sharing... what's your preferred vendor for Deepseek

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

#50

Post by dcre »

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 we actually are seeing an app explosion, just not a consumer app explosion.
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