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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

#81

Post by dTal »

WillAdams wrote: post #35
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

There are a lot of specialty/niche apps showing up which are vibe coded --- tons of 3D CAD apps which are a variation/extension of OpenSCAD, a fair number of tools which work with G-code in various ways, &c. On a commercial support forum I moderate we had to ban software announcements there were so many.

I was idly browsing F-Droid yesterday and found a Claude coded B-REP CAD program built on OpenCASCADE, all touch friendly and everything. Definitely something happening.

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

#82

Post by vb-8448 »

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

> especially from the AI labs

IMO this is one of the endgame for big ai LABS, they will allow and subsidize users to test and validate on their behalf and once there is a PMF they will step in.

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

#83

Post by vb-8448 »

hyperpape wrote: post #3

Maybe there's an argument that a lack of rising profit margins in non-tech companies is a bad sign for AI, but this article doesn't make it. Why can't we have a red-queen's race where non-tech companies are implementing AI, but it's not increasing the total profits of those sectors, just meeting rising customer demands/fighting over the share of existing profits? (Never mind that if you look at that chart, profit mar…

> I agree that non-tech companies seem to be taking longer to see results from AI

Rewriting your app in rust won't increase your revenue, it will cost you more in terms of tokens and risk increasing.

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

#84

Post by rurufjcir »

eru wrote: post #66
mikgp wrote: post #14

Earlier quoted context omitted.

> Why can't we have a red-queen's race where non-tech companies are implementing AI, but it's not increasing the total profits of those sectors, just meeting rising customer demands/fighting over the share of existing profits? But then if this happens - all of the stock market has risen in the promise of AI. If AI eats profits instead of grows them, then the economy shrinks right? So maybe that’s worse? That there is…

> If AI eats profits instead of grows them, then the economy shrinks right? No, why? The economy is bigger than company profits. Eg there's workers' wages and customer surplus and investments etc.

Because companies need earnings growth and they’ll fire workers to meet those targets

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

#85

Post by gpderetta »

conductr wrote: post #74
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…

I’m seeing this too. I compare it to spreadsheets in terms of getting broad application building tools to the layperson

It is really the second coming of Excel. And it is a good thing (probably?)

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

#86

Post by conductr »

gpderetta wrote: post #85
conductr wrote: post #74

Earlier quoted context omitted.

I’m seeing this too. I compare it to spreadsheets in terms of getting broad application building tools to the layperson

It is really the second coming of Excel. And it is a good thing (probably?)

Probably net positive. But just like spreadsheets, it’s likely that having tools created by a layperson that does not properly secure or test the system is probably going to occur, cause some unfortunate issues, and steal the headlines. Similar to when an excel formula error results in a flash crash of financial markets and such. It’s huge and sucks but there’s also countless value being added daily all around the world with little fan fare.

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

#87

Post by Ferret7446 »

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…

Don't index on tokens. Costs for useful unit of work had gone down in my experience, and that's what actually matters.

Counting tokens is like counting lines of code.

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

#88

Post by Ferret7446 »

disgruntledphd2 wrote: post #73
eru wrote: post #62

Earlier quoted context omitted.

The closest parallel in history I can think of is the proliferation of spreadsheets in the 1980s.

Yeah, this feels like the right comparison. AI, like Excel makes it much easier for people to build useful tools. And like Excel, software people are gonna end up complaining about the quality and having to maintain these applications.

I assume the new wave of apps are going to be maintained by LLMs. Maybe one day the LLMs are going to complain about the quality of the code written by previous inferior LLMs?

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

#89

Post by eru »

Ekaros wrote: post #77
eru wrote: post #70

Earlier quoted context omitted.

Obviously they don't voluntarily pass on cost savings to customers. That's why competition is there for. Btw, check how much RAM costs today per byte than eg 20 years ago. Even including today's AI driven price increases. Or check how much it costs to keep your house light up nice and bright compared to 50 years ago.

How much does a car cost now? Surely with automation, robots and general efficiency gains every where in the production chain they should be lot cheaper than they used to be. The companies seem to rarely keep the cheaper models around too for something. Surely they could sell them for right price.

> Surely with automation, robots and general efficiency gains every where in the production chain they should be lot cheaper than they used to be.

And they are! Especially when adjusted for quality and efficiency and how seldom you have to maintain them these days. (Old time-y sitcoms had the males of the show always tinker with their cars for a reason: the stereotype existed because cars _needed_ constant tinkering.)

> Surely they could sell them for right price.

Partially that's because the models from the bad old times are outlawed these days. You couldn't legally sell a Model T these days. Partially because even if you could, you couldn't produce the Model T at the scale that would make it cheap: no one would want such a crappy car at any price.

In the US, they also have annoying tariffs and other import restrictions. So you can't get the cheap and cheerful cars from China (or India or Brazil).

But getting away from cars: for a few decades it was almost a proverb that China would sell you junk for cheap. (And before that Japan had the same reputation. And sometime in the 19th century Germany had that reputation in Britain.)

So if you look around a bit: you can still often buy the low quality stuff from the bad old days, just from a different part of the market.

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

#90

Post by eru »

DrewADesign wrote: post #78
eru wrote: post #68

Earlier quoted context omitted.

What does corporate culture have to do with any of it? The surplus goes to the consumer not because of any benevolent corporate culture, but because of competition. And (most) efficiency gains have benefited customers in the past. Just check eg how much you are paying for excellent lighting of your house today vs 200 years ago.

Yeah that’s why health care and credit are so cheap! How about literally anything run by private equity?

> Yeah that’s why health care and credit are so cheap!

Yep, though only where competition is allowed!

> How about literally anything run by private equity?

Like many airlines? Flying has never been cheaper.

Planet Fitness is also owned by private equity, and their 10$/month membership plan has been steady for two decades despite inflation.

You can find lots more examples.

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