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AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

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Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#321

Post by jstummbillig »

lopis wrote: post #265
jstummbillig wrote: post #87

Earlier quoted context omitted.

People confuse themselves with the bubble-metaphor. If an AI bubble exists and pops (we need not discuss either) the already existing and on-the-way-demand will not just disappear. Millions of todays users will not just decide that they don't want to use claude code or chatgpt anymore. Instead, an increasing number of people are going to want AI stuff from here on out, forever, because it's proven to be good enough i…

The "bubble popping" mostly means that investment will drastically fall, investors will start demanding profit, and costs will soar. This will cause a lot of tools currently built on top of LLMs to become too expensive. Free tools will likely become rare. There's a significant number of users that will not pay for AI. There's likely also a significant number of users that will not accept higher subscription costs no…

AI is already easily profitable without further optimization. If at any point investors decided that this is the best the models are going to get, because it's not worth further investment then we will run inference on the existing hardware, forever. What will not happen:

- The models going away. There is no future where people will start doing more coding without AI. - Everyone running all AI on their existing notebook or phone. We have absolutely no indication that the best models are getting smaller and cheaper to run. In fact GPUs are getting bigger.

This might hurt OpenAI, depending on how good the best available open models are at that point, but this will in no way diminish the continued increased demand for hardware.

> When this happens

I think all of this is highly unlikely, and would put a "If". But we will see!

Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#322

Post by aoeusnth1 »

mrweasel wrote: post #300
adventured wrote: post #242

Earlier quoted context omitted.

That's what people widely claimed about Uber: it was toast once the investor subsidies stopped. Now it's quite profitable. People will pay more. Claude Opus 4.5 is worth more than $20 per month, as is Gemini 3 Pro. These services keep getting better. Another three years of improvement, why shouldn't that command $30 or $40 instead? $20 is ~$10 in the year 2000 per the BLS inflation calculator (or $1.25 when priced in…

I think you're ignoring that most users of AI currently aren't paying anything, nor would they. I believe the value of a Facebook user was $70 per year in 2023, for the US and Canada. Assuming that the AI companies could make twice that from ads, that's still only $10 - $12 per month, and even less in the rest of the world. Obviously there's going to be some business users as well, so they can cover some of the cost,…

The cost of free users is much lower because they are served lite models, hit quota limits quickly, and can't soak up tokens by using agents. The main capacity usage is from agent loops, which is universally behind a paid tier.

Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#323

Post by pc86 »

lm28469 wrote: post #279
pc86 wrote: post #170

Earlier quoted context omitted.

You have that option, it's called buying a house and getting a mortgage. You just rent from the bank for 30 years first. But you're not thinking x=30 with any responsibility other than writing a check, I bet. If I had to guess, I'd say you want x There's a reason why a mortgage with very little down payment is a lot more than comparable rent.

> You have that option, it's called buying a house and getting a mortgage. A landlord will happily swallow 50% of your income but a bank will start to feel bad about a ~30% debt to income ratio, so no you can't really. Reminder that a 300k mortgage over 30 years at 5% costs you 600k in the end, so you're fucked either way, at best your kids might benefit from your investment. Housing got way more expensive since the…

> A landlord will happily swallow 50% of your income but a bank will start to feel bad about a ~30% debt to income ratio, so no you can't really.

It's almost as if the banks know they're very likely to lose money by approving loans people are statistically unlikely to be able to make 360 on-time payments for.

> Reminder that a 300k mortgage over 30 years at 5% costs you 600k in the end

100% true and stated this way makes it sound like it's the evil bankers, but really it's just the way math works.

> most people are priced out of buying a house

I don't think "most" is accurate here, especially if you include areas don't have insane NIMBY restrictions on building like SF and NYC.

This[0] shows there are absolutely places more affordable than others. My one complaint is that if everything gets more expensive the map doesn't really change so it could be better.

And I've heard the rebuttal before about "that's where the jobs are" (false) or "that's where I grew up." I get it, but living in high-demand places is not a constitutional right. Not having your own home in a major downtown metro is not a violation of your rights. If you can't afford to live somewhere, you should move. I'm in the 4th state I've lived in in my life right now. I might be here until I die, I might live in 4 more. Lots of things play into that but a major part of the calculus is whether or not I can afford to live the life I want here.

[0] https://www.visualcapitalist.com/mapped-u-s-housing-affordab...

Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#324

Post by materielle »

lukeschlather wrote: post #296
voxleone wrote: post #175

I think a lot of businesses don’t actually need cloud AI at all. Once workloads stabilize, cloud is mostly a convenience tax. Most business use cases (docs, forecasting, monitoring, support, control systems) don’t need frontier models or hyperscale elasticity. Efficient models running locally are already “good enough”. Continuous inference + data gravity + latency/privacy constraints make owned edge hardware economic…

I've been prototyping using LLMs for some borderline use cases, and the cost isn't really the concern, it's the reliability. Using less than the most frontier model seems irresponsible if it could mean the difference between 99.95% reliability and 99% reliability, and that's the threshold where you should've hired a human to do it because you lost more money on that 0.95% error rate than you saved on salaries. (I don…

Is that really true, though?

First off, you’re ignoring error bars. On average, frontier models might be 99.95% accurate. But for many work streams, there are surely tail cases where a series of questions only produce 99% accuracy (or even less), even in the frontier model case.

The challenge that businesses face is how to integrate these fallible models into reliable and repeatable business processes. That doesn’t sound so different than software engineering of yesteryear.

I suspect that as AI hype continues to level-off, business leaders will come to their senses and realize that it’s more marginally productive to spend on integration practices than squeaking out minor gains on frontier models.

Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#326

Post by TacticalCoder »

xvxvx wrote: post #12

- GPU prices rising - RAM prices rising - hard drive prices rising Are we looking at a future where home computers are replaced by thin clients and all the power lies in subscription services? ‘You don't need storage space, use our cloud subscription’ ‘You don’t need processing power, stream your games through our subscription service.’ Game publishers have already publicly floated the idea of not selling their games…

Silver price rising. Gold price rising. Bitcoin price rising.

It's got another name: inflation. Western economies are crumbling under gigantic public debt, representing 130% of the GDP in many countries and they're doubling down on public spending.

The only way out is either defaulting on the debt (like Greece partially did) or debasing the currency.

Monkeys have been left at the helm since decades and they only know how to do one thing: spending taxpayers dollars and endebtting countries ever more.

Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#327

Post by lukeschlather »

zozbot234 wrote: post #320
lukeschlather wrote: post #311

Earlier quoted context omitted.

The thing historically about GPUs has not been the actual lifespan of the hardware (at least half of the hardware will probably work fine for 10 or more years) the problem is that work/watt is dropping for newer hardware, so there's a point where even if you had an equivalent quantity of 10-year-old GPUs, powering them for some period costs $40k and you can buy a single brand-new GPU that costs $40k but only costs $2…

> the problem is that work/watt is dropping for newer hardware, so there's a point where even if you had an equivalent quantity of 10-year-old GPUs, powering them for some period costs $40k Sell the old-gen GPU's to on-prem users (including home consumers) who are going to run them a small % of the time (so power use is more or less negligible to them compared to acquisition cost), problem solved.

The same math applies for on-prem/home users. If you actually have some workload where it makes sense to get a free GPU that costs $40/hour to power because you only need it for a few hours a month, it's probably cheaper to rent a more efficient GPU from someone who can power it at a lower cost.

Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#328

Post by Noaidi »

diordiderot wrote: post #236
Noaidi wrote: post #171

Earlier quoted context omitted.

"Moore's Law" thrives under socialism. "Sam's Law" exists under neoliberalism. "Leslie's Law" is the result of fascism.

I mean, you just made that up but sure. China is essentially a pinko branded fascist state and they continue to develop better processors

> China is essentially a pinko branded fascist

Sorry, China is a unitary communist state. Fascism and communism are the opposite. Both have state control but the fascist control is from the corporations.

The reason China has better chips is because they have a form of socialism

Don't be a propagandist regurgitating propagandists ideas, it does nothing for intelligent conversation.

Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#329

Post by rvnx »

SPICLK2 wrote: post #79
xvxvx wrote: post #12

- GPU prices rising - RAM prices rising - hard drive prices rising Are we looking at a future where home computers are replaced by thin clients and all the power lies in subscription services? ‘You don't need storage space, use our cloud subscription’ ‘You don’t need processing power, stream your games through our subscription service.’ Game publishers have already publicly floated the idea of not selling their games…

>home computers are replaced by thin clients Ah, but that's the genius of this circuit around the tech cycle. You need a "thick client" to access those subscription services, as running the (web) interface requires shameful amounts of RAM and CPU resources.

I think in the mid-term, many of these AI companies are going to run out of cash.

Users are more and more going to be able to run models locally so it's a race to nowhere (all you need to have a very good model, is to have a Mac with 128 GB of memory, but at 16 GB you already have something usable but not so nice)

The big winners are going to be the memory makers

Re: AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention

#330

Post by GoatInGrey »

adventured wrote: post #242
mort96 wrote: post #157

Earlier quoted context omitted.

As someone who can't stand these tools, I'm ecstatic. Y'all have been hooked by the early venture-backed "scale up at all cost" period. You're gonna get squeezed so hard once investors start demanding returns on their investments -- and this whole craze is, hopefully, coming to an end.

That's what people widely claimed about Uber: it was toast once the investor subsidies stopped. Now it's quite profitable. People will pay more. Claude Opus 4.5 is worth more than $20 per month, as is Gemini 3 Pro. These services keep getting better. Another three years of improvement, why shouldn't that command $30 or $40 instead? $20 is ~$10 in the year 2000 per the BLS inflation calculator (or $1.25 when priced in…

At its worst, Uber had a net margin of -~60%. The AI labs are all running at least negative triple digit net margins, some running negative quadruple digit net margins. This is why AGI has been "forecasted" to death by the labs, because investors need the promise of infinite automation to stomach the losses.

Anyway, in this instance, what you received for $20 in 2025 will run you somewhere in the range of $60-$90 in 2027/2028. In the interim, you will likely see that $30-$40 of service gets you what cost $20 in 2025. The most likely avenue for this will be reduction in subscription user limits, and for API customers premiumization through substitution. The latter being a situation where what would be the next Claude Sonnet model is now sold as Claude Opus, for example.

The only way the math works for the consumer is if the user base has become dependent on the service instead of remaining in a conventional cost/benefit relationship.

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