What if.. and this is a big if.. but.. what if we just paid people what they're actually worth?
Outsourcing plus local AI will soon become more economical vs. frontier labs
291–300 of 408 posts
Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#292Earlier quoted context omitted.
I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). So large companies are getting billed a lot more than those discount subscription plans.
> I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). Can large enterprises just not use the API ? I have audit logs and what seem to be enterprise features through my anthropic account (platform.claude.ai)
Enterprises can, but then they have to show their auditors that this has been done in a way which is robust and can’t be bypassed, and they have to build the kind of reports people need to be convinced of that — nothing is ever “just” in enterprise IT.
Longer term, you also have to be careful about building things around details which could change at any time. OpenAI and Anthropic have a ton of pressure to start banking huge profits and they very closely monitor customer activity. A time-honored strategy in this space is to shuffle the features enterprise customers depend on but which aren’t deal-breakers for most other customers into expensive enterprise plans. There’s possibly some counter pressure from companies like Google which have healthier finances but I wouldn’t count on that since they also have MBAs who’d be all too happy to invent pretexts to hike their prices to match.
Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#293Earlier quoted context omitted.
Brand new industry, massive capital, dropping inference costs, increasing availability of compute, cost centers / subsidized subscriptions are common in SaaS, heavy competition, no public information on actual utilization rates. How much is Waymo burning a year? 3B on 300M ARR? Anthropic is what 5B on 20B ARR? Waymo is 3x older. Why don't we hear such confident statements about how subsidized their rides are? It's on…
Do people commonly argue Waymo isn't subsidizing rates? Also, we do have some evidence for my position: - We know that the consumer Claude plans provide _way_ more tokens than you could get if you were paying API prices. This is a huge part of why Anthropic's limits on other harnesses for subscription customers is such a big deal. So either their profit margin on API tokens is absurdly high, most consumer subscribers…
> I think the case that their consumer subscriptions lose them money on net is pretty strong, even though their enterprise subscriptions (and API pricing) does make them a profit.
To be clear I'm not arguing against this position, just questioning the confidence with which people claim that the current consumer subs are not a sustainable offering and a merely temporary.
Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#294Earlier quoted context omitted.
Theres recent reporting that Anthropic will be profitable this quarter... edit: I see in other comments on this thread you think Ed Zitron is a reliable pundit so that explains everything.
How will it be profitable, really? You can dismiss Ed (and me vicariously) but what's your compelling evidence to counter their extremely uphill battle towards profitability? Either way it will be very interesting to see their S1 when they try and IPO. If it's anything like SpaceX's then I suspect my post will age better than yours.
I sincerely doubt Anthropic’s IPO will say that their AI business is only 2% of their future revenue, and they’re bundling in totally unrelated, unprofitable things they expect to account for 98%.
Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#295Earlier quoted context omitted.
Even with increased prices, AI enables velocity both in development and bugs fixing. Would companies want that? If prices are biting the company, I think companies will route all development and bugs fixing requests through few superperfomer developers with complete knowledge of the different components within the company (they will be the Queen Bees holding the company on their head). The rest of the company will be…
Most software development teams are pushing back on the deluge of bad changes from AI tools and are moving slower again to regain trust and stability. It is likely that future software development will not actually be higher velocity.
Bad changes will be eliminated because better people are using the AI tools. They will reduce cost as well as slop.
Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#296Earlier quoted context omitted.
I hope your company is keeping the input/response pair in case they need to break free at some point.
Wouldn’t people mostly just want any artifacts?
Like Slack history, LLM history can be used to build searchable knowledge base. Questions are often more valuable than answers.
Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#297I think this misses the forest for the trees. Working with ChatGPT is eerily similar to working with offshore Indian devs back in my enterprise days. Productive if guided explicitly but if let run wild there's lots of WTF moments. LLMs are likely to replace outsourced devs because your employees that know the context can use LLMs to do what offshore devs did before.
There are developers outside of your country that are talented, speak your language competently, and willing to work for less pay. There are plenty of reasons to believe that such devs will increase in numbers.
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Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#298This is a really interesting point. It does seem that in recent days, probably driven by the approaching IPOs, anthropic and openAI have been testing increased prices and burning tokens to see just how much people are willing to spend and in all honesty seem to be targeting the salary of an SF engineer as their ceiling. They seem to think that people will be willing to spend nearly as much on tokens an a human engineer.
Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#299My friend is an exec at a US software company and they are preparing to lay off a few teams of programmers in their Eastern European locations and replacing them with a small number of US programmers + AI. He said they are much more productive and produce new features much faster.
That's an interesting reverse in dynamic.
Implication for manufacturing: Going robots first shouldn't aim at just re-localizing manufacturing, but aim higher. Become the new outsourced manufacturing destination.
Re: Outsourcing plus local AI will soon become more economical vs. frontier labs
#300Earlier quoted context omitted.
"shady third party" If Claude hosted on AWS bedrock is not considered trustworthy, I have some bad news for you.
Anthropic illegally downloaded virtually all copyrighted material in the world to train their models. What makes you think they will have even a little consideration for your IP?
Let's say as a matter of fact that Anthropic seizes every opportunity to steal IP.
How is that going to work on Bedrock, when they don't even manage the infrastructure?