AI's Affordability Crisis • Hacker News Board

Re: AI's Affordability Crisis

#151

Post by LoganDark » Tue, Jun 23, 2026, 4:55 PM UTC

bryanlarsen wrote: post #142

LoganDark wrote: post #129

Earlier quoted context omitted.

A superintelligence is one that exceeds human intelligence in all areas. Which roughly translates to learning, adapting, and performing more quickly and efficiently than even the best humans. This is closely related to "the singularity", which is when technological growth becomes uncontrollable by humanity.

That sounds like a definition designed for goal shifting. This AI is better than human at 99.9% of things, but humans are better at pooping. Therefore we don't yet have a superintelligence.

If that AI were given an identical human body (and interface to that body) to someone who had not yet learned how to do that, and it outperformed them in figuring it out, then that would settle it.

Otherwise I don't see the comparison.

If I'm intelligent enough to use a tool, but I don't have the tool, that doesn't mean anyone who does have the tool is automatically more intelligent than me.

Likewise, comparing my performance without the tool against someone's performance with the tool wouldn't be benchmarking their performance, only benchmarking them with the tool's performance. The fairer comparison would be against me also with the tool.

Re: AI's Affordability Crisis

#152

Post by smahs » Tue, Jun 23, 2026, 4:56 PM UTC

SamuelAdams wrote: post #137

deweywsu wrote: post #124

I know a lot of level-headed engineers here may not side with me, but I say let the companies who abandoned their people at the drop of a hat, with CEOs who waved their flag around on social media, proudly declaring how they'd now run their companies with 75% fewer employees wither and die. If I had been let go, there's no way I'd go back to a company like that, and there should be a black list of CEOs who acted this…

GM just did this in the last 30 days [1], and their sales are likely going to be just fine. In fact the auto industry has repeatedly automated jobs over the last 100 years, and they still make decent sales numbers. If you decided to boycott every company that replaced staff with automation, you would be forced to exit the economy. Every company does this to some degree and the customers who vote with their wallet do…

The above comment, to which you responded, wrote about CEOs who responded to mass hysteria, not those who automated anything.

Re: AI's Affordability Crisis

#153

Post by deweywsu » Tue, Jun 23, 2026, 4:56 PM UTC

SamuelAdams wrote: post #137

deweywsu wrote: post #124

I know a lot of level-headed engineers here may not side with me, but I say let the companies who abandoned their people at the drop of a hat, with CEOs who waved their flag around on social media, proudly declaring how they'd now run their companies with 75% fewer employees wither and die. If I had been let go, there's no way I'd go back to a company like that, and there should be a black list of CEOs who acted this…

GM just did this in the last 30 days [1], and their sales are likely going to be just fine. In fact the auto industry has repeatedly automated jobs over the last 100 years, and they still make decent sales numbers. If you decided to boycott every company that replaced staff with automation, you would be forced to exit the economy. Every company does this to some degree and the customers who vote with their wallet do…

This is true, and I'm sure AI cuts will continue, but it's obvious that the ones who went "all in" at AI's mass introduction were drinking a special kind of Kool-Aid reserved for the truly sycophantic Wall Street lap dogs, not the CEOs who think about risk and are cautious about betting the farm on a relatively new and mostly untested technology. GM is over 100 years old, and no doubt released improvements that were well-tested and predictable, because you don't take massive chances with a company that well established. It was a couple years into the mass AI deployment that studies on the minimal overall productivity gains of AI even started to come out(!) This was "get on the bandwagon" thinking at a massive scale, which shows you how many CEOs are not independent thinkers at all, but are really just followers. Yes, use AI, but do it responsibly, never forgetting that your investors aren't your only stakeholders - so are your people.

Re: AI's Affordability Crisis

#154

Post by sowbug » Tue, Jun 23, 2026, 4:56 PM UTC

jschveibinz wrote: post #5

I don't have a crystal ball, but based on similar historical scenarios, I think that one or two of these companies will win--probably because of some unique application, delivery or trade secret that will drive 80% of their revenue. Consider Google, Apple, Amazon, etc. It's still early days...

We're seeing the first 20 years of the dot-com cycle, but compressed into two years, and trying hard not to fall into the tar pit of ad-supported services.

Re: AI's Affordability Crisis

#155

Post by rconti » Tue, Jun 23, 2026, 4:57 PM UTC

Catloafdev wrote: post #55

Affordability is not the current goal. Vendor lock-in is the current goal. Consumer prices are a drop in the bucket comparatively.

Maybe they just need the competition to run out of funding first?

Re: AI's Affordability Crisis

#156

Post by wqaatwt » Tue, Jun 23, 2026, 4:57 PM UTC

lenkite wrote: post #106

tacone wrote: post #27

My take is that Anthropic and OpenAI simply are NOT competing on price. 2 big players are often not enough to create tension on price. Chinese models and open model providers are, indeed, competing on price, and the difference shows.

Chinese models are dropping in price thanks to ridiculous levels of state subsidy where companies are forced into aggressive price wars to survive and grab market share. I am guessing this will also blow up sometime next year or in 2029 at the maximum. Btw, some Chinese corporates have already seen this and increased their price. Zhipu AI & Tencent for example. Alibaba, Baidu, and Tencent also announced multiple pric…

Chinese companies like Deepseek are operating on shoestring budgets (allegedly less than 300 employees at Chinese wages). It’s not that self evident there is anything that needs subsidized besides compute (due to limited manufacturing capacity and access to Western chips in China)

Re: AI's Affordability Crisis

#157

Post by verdverm » Tue, Jun 23, 2026, 4:58 PM UTC

8n4vidtmkvmk wrote: post #77

hackingonempty wrote: post #53

Earlier quoted context omitted.

> The US govt is going to ban foreign models The people have a right to make and use whatever models they want, protected by the constitution. At a minimum, the models are described in research papers that are unquestionably protected speech. Skilled devs turn those into programs, also protected speech.

How could Trump ban tiktok then? And Fable for that matter. Maybe you're somehow legally allowed to distribute and download the weights, but most of us can't run GLM 5.2 at home.

You won't need a frontier size model for most tasks before long. Qwen 3.6 (small) punches way above its weight. I run it at home @8bit on an OEM Spark

Re: AI's Affordability Crisis

#158

Post by travisb » Tue, Jun 23, 2026, 4:58 PM UTC

I think a lot of the cost comparisons to employees are off by a factor of 2 or more. AI is the ultimate contractor. Available instantly. Doesn't charge during idle periods. Pre-vetted and pre-trained. No contract negotiations or complex accounting.

That is worth a small multiple of the fully-loaded employee cost. So AI might be easily worth more than $200 per human-equivalent hour. With high utilization, that might be $8000-10000 a month.

With that kind of spend, AI provider financials looks less frightening.

Re: AI's Affordability Crisis

#159

Post by kingstnap » Tue, Jun 23, 2026, 4:58 PM UTC

holyknight wrote: post #78

Most of the "affordability" and "pricing" discussion is pointless because we don't have any real numbers on their margins per token. So, yes, they are subsidizing their subscription plans compared to the API prices, but the API prices could already be stupidly inflated, so the relative price comparison is a nothing burger. Until we know (or at least get a hint) on their margins on API prices, any pricing discussion i…

I don't understand this line of reasoning at all.

We have a pretty good idea of how much it costs to serve these models. You can pencil out the economics and guess at the model sizes and we know pretty decently how expensive the hardware is.

This like claiming it's meaningless to guess the margins of a restaurant without going into their books and seeing the exact recipets and recipes.

They ain't doing dark arts in the back. You can guess at what goes into the food based on similar recipies and how much that costs based on what you pay at the grocery store.

Re: AI's Affordability Crisis

#160

Post by mattas » Tue, Jun 23, 2026, 4:59 PM UTC

I can't wrap my head around how revenue > COGS but at the same time AI is being subsidized and the real cost is not affordable.

You don't price based on cost, you price based on willingness-to-pay.

So maybe labs are "overcharging" enterprises on interference (because, up til now, enterprises have seemingly had unlimited budget for tokens) and "undercharging" individuals and SMBs (because they don't have an unlimited budget).