Earlier quoted context omitted.
Oh they'd be sure to let us know if that were the case.
Why would the AI companies advertise that most of their users do not use their subscription in full??
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AI's economics don't make sense
131–140 of 201 posts
Re: AI's economics don't make sense
#132Earlier quoted context omitted.
The output won't be read by humans (and increasingly this is the case in my own use) so I don't see how that works. If the output itself will be directed by the highest bidder, that doesn't work. Or if the output influences the agent's direction, that doesn't work either.
Stallman is going to be overjoyed when all the class and variable names in open source repositories have been reformatted to say EnjoyCocaCola and year_of_the_trucks_medicated_pad etc
Please don't give them ideas. :(
Re: AI's economics don't make sense
#133I've sort of lost some respect for ed that I had early on in the hype cycle - he's still right about some things, but I can see him slowly and subtly retreating from his strong position, held even a few months ago, that these things will never ever be useful for anything and it's all a scam because they don't actually do anything at all except burn money. He would say it like 8 times a monologue. I remember one podca…
This is exactly how I feel about him too. I also find his "number big" approach to writing ("check out my 18,000 word blog about something I'm learning about in real time") off-putting, so I've completely stopped engaging with it. We need better critics of the industry.
I always gets the sense around a third of the way through his articles that whoever reads his drafts just gives up. It goes from wordy and repetitive to wordy, repetitive, filled with rage-bait exasperation and more filler than content.
Give the man a 2000 word budget and he could probably write a better article and cover the same information
Re: AI's economics don't make sense
#134All subscription models are subsidized by users who don't use much. The fact that somebody on a $20 sub might get $50 in value isn't crazy if there are 3 people who only get $10 in value. This isn't some sign that the model is broken, it's the intended outcome. Also, I didn't read this whole thing, but I have yet to see Zitron respond to the strongest AI financials claim, which is that the models themselves are profi…
I subscribed to Claude for a month. I sat down with it for a few sessions, but in each case I ran into a limit before I achieved anything worthwhile. And that was with me babysitting it the whole time to try to get the most out of it. I'm not sure it's possible to use it less (so that others can use it more) and get anything meaningful done.
Re: AI's economics don't make sense
#135It make sense if you account for cost of intelligence getting cheaper every year. Most of the models per unit of intelligence is getting far cheaper. We get better hardware, architecture, training techniques, inference optimizations and caching. All those improvements add up. In in early 2022 you were getting 10x cheaper annually now is closer to 2x - 5x cheaper annually. The cost is still dropping where as Uber can…
Better hardware would have to be bought with additional money. And no one can forecast reliably how much optimization is left in the game.
Re: AI's economics don't make sense
#136There's a few major problems with the article. The most obvious is that frontier labs are not charging remotely close to the cost of tokens; afaik most estimate north of 80% profit margins. As a reference, providers are profitably providing Kimi K2.6 for $4/1Mtok out. Is that as good as Opus? No, but it's probably at least Sonnet level, so that's ~4x cheaper than Sonnet while still being profitable to serve on the ma…
> How many tokens can you realistically burn through in one chat session? I've used single digit billions in a couple days, FWIW.
I'm a fair bit lower than some others as I only use it outside of work hours on my own small projects, but my Cursor account shows (for a random recent date) 12,184,233 tokens in a day. That day feels pretty representative.
That's with 86 interactions spread intermittently over a couple of hours so if I did a full working day like that I'd be looking at maybe 40 to 50 million.
Re: AI's economics don't make sense
#137He does have a point about fees. It's not really surprising that the fee structure designed for chatbots would not make sense when applied to long running tasks and agents. But an increase in prices can solve this problem. Doubtless some people will reduce usage as a result. But Ed seems to find the idea that a 10 man developer team might spend 80K a year on tokens ridiculous. I don't understand this. Has he seen how…
I think that team is better off with a junior developer. This alleged “20% productivity boost” even if it exists, is individual. On the team level, it will be largely offset by people having to review 20% more code.
Obviously in some cases a junior developer is a better investment if it's a straight up choice.
Actually I think it'll be rare for a manager to be choosing between either a junior developer or a coding assistant, since each are going to benefit the team in very different ways and it'll often be obvious which you need.
What I mean is that at the price levels in the article the coding agent still had a realistic chance of positive ROI. People will pay for things with positive ROI.
Re: AI's economics don't make sense
#138Re: AI's economics don't make sense
#139I've sort of lost some respect for ed that I had early on in the hype cycle - he's still right about some things, but I can see him slowly and subtly retreating from his strong position, held even a few months ago, that these things will never ever be useful for anything and it's all a scam because they don't actually do anything at all except burn money. He would say it like 8 times a monologue. I remember one podca…
I've only read a few of his pieces here and there and had just assumed he was an AI skeptic, so I never thought his position was LLMs would never be good for anything at any price. That's a pretty extreme thing for any serious person to have ever claimed. Frankly, it seems more like a straw man exaggeration of AI skepticism. I consider myself to generally be an AI skeptic, but to me that means skepticism about: 1) Ne…
Yeah the dotcom crash didn’t prove that the internet was useless for business. And the housing crash didn’t mean houses don’t have value.
We get hype bubbles. They’re (nearly?) always bigger than the thing they’re about, in a given time and place.
It’s reasonable to think the AI hype train is one of those, to some degree or another. It’s also reasonable to see great utility in llms, now and in the future.
Re: AI's economics don't make sense
#140The good news is that this might be the end of Oracle.
Except that none of the genAI companies are an improvement over Oracle. There's no win in Oracle's passing if it's just replaced with a different company that behaves no better, or even worse.
It's not looking great for a lot of them either :)