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Uber's $1,500/month AI limit is a useful signal for AI tool pricing

simonwillison.net

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Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#431

Post by tcoff91 »

jatora wrote: post #424
blobbers wrote: post #408

I think the main thing companies should try to understand is avoiding the use of 'claude -p'. I definitely have written a goal file, and then just ran claude in a loop over the goal in order to 'token max'... why not? I'm doing research and have some clear KPIs where research into all kinds of techniques / tuning can improve the results. I can spend my budget on a "experiment with blah blah blah to improve blah blah"…

I also randomly wrote some code in a bind yesterday, while I was on the toilet, and it felt so strange. That was the first I'd written in probably 6 months.

You don't even make small tweaks by hand? There's so many things that are honestly faster to do by hand than wait for agents to do.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#432

Post by andix »

It finally puts a number on productivity gain of engineers with AI. This is probably less than 10% of the cost of an average uber developer. So they don't assume much more productivity gain from AI than 10%.

(Cost of an employee is much higher than their salary, it includes things like office space, supporting structures like HR/accounting, insurance, hardware/software, and much more)

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#433

Post by credit_guy »

oblio wrote: post #423
marcosdumay wrote: post #401

Just to put this in context. If every company did this, all over the world, with that same limit, we are talking about something around $45B monthly in revenue for all AI companies to share.

That's a bold assumption. Increasing costs by roughly $18 000 per employee worldwide is highly unlikely. For reference even at FAANG in Europe, that would be a 7-15% cost increase for a senior developer. More like 15-30% for non FAANG and even more for non-European markets.

I don't think it's a bold assumption, but I also don't think the assumption would lead to the conclusion.

1. Why it's not a bold assumption: it's a bit shocking now. But in two years or so, many/most companies will realize this is the cost of doing business. Just like people are ok with using Outlook, or Office 365, or (in the case of Wall Street) Bloomberg terminals, people will realize that developers will need AI coding assistants.

2. Why the conclusion does not follow from the assumption: if the limit is set at $1500/developer/month, it does not mean all developers will use it. Companies will set incentives for people to not be very wasteful. It is more likely that on average developers will consume $100-200 worth of tokens per month, and there will be some outliers who will consume 10, 100, or 1000 times as much, but they'll be few.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#434

Post by scubbo »

tokioyoyo wrote: post #235
fragmede wrote: post #213

Earlier quoted context omitted.

What's an int vs a float vs a boolean? What's a function? What's a class? What's a variable ? You don't actually need to know the answer to those questions in order to vibe code. That's a lot of priors to update!

Just to go on record, as of today, I’m a big believer that a person that knows all that stuff is much more productive with AI-coding than a person who doesn’t. I have no idea how we can get people motivated to learn these through trial-and-error when AI coding exists though. I remember the days of spending hours on stupid bugs that AI can resolve within a minute. But I recall learning heavily from those experiences.…

I like the presentation I heard from a Principal, that AI tools amplify your competence. If you start out incompetent, it'll just allow you to be incompetent with greater scope and (negative) impact.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#435

Post by sothatsit »

fontain wrote: post #278
pmontra wrote: post #246

Earlier quoted context omitted.

> Your other plans are fixed price with rate limits where you get more tokens than the dollar equivalent you pay monthly. Or the fixed cost plans reflect the real cost and the people paying API prices give them the profit. Anyway, none of my customers will let me bill them $1500 more (about $75 per day) because I'm using AI. And what for? I'm not working to move money from the pockets of my customers to the pockets o…

No, we know from the financials of these companies that API prices are close to being at cost and the individual developer plans are heavily subsidized (because they are roughly 10% of API cost per token[1]). If plans were at cost and API pricing was marked up that would mean there’s a 90%+ profit margin on tokens and instead of raising money and talking about revenue, Anthropic and OpenAI would be talking about thei…

This completely ignores all the other huge costs the AI labs are paying in data center builds, researcher salaries, experiments, and training models.

The fact that Anthropic is rumoured to have a profitable quarter indicates that their margins on API priced inference are very strong.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#436

Post by oblio »

credit_guy wrote: post #433
oblio wrote: post #423

Earlier quoted context omitted.

That's a bold assumption. Increasing costs by roughly $18 000 per employee worldwide is highly unlikely. For reference even at FAANG in Europe, that would be a 7-15% cost increase for a senior developer. More like 15-30% for non FAANG and even more for non-European markets.

I don't think it's a bold assumption, but I also don't think the assumption would lead to the conclusion. 1. Why it's not a bold assumption: it's a bit shocking now. But in two years or so, many/most companies will realize this is the cost of doing business. Just like people are ok with using Outlook, or Office 365, or (in the case of Wall Street) Bloomberg terminals, people will realize that developers will need AI…

> Office 365

An entreprise license for 0365 is something like $75 per person per month. Totally different order of magnitude.

And regarding Bloomberg terminals, Bloomberg only has 1 million users (semi random guess).

The reality will be that some places just won't pay for any licenses or will try to set up their own, local LLMs.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#437

Post by tmp10423288442 »

nalekberov wrote: post #390

What is the point of allowing a developer to spend $18,000 a year on AI subscriptions? Can't they hire a decent developer who is capable of producing a quality solution faster? Clearly, these decisions are all made by high-level management team. I was recently talking to an HR person from a European company, and she goes: 'We are forcing our developers to use AI coding agents, but they are still kind of hesitant.' Th…

It costs a lot more than $18,000 to hire a decent developer, pretty much anywhere in the world. Also using a model is better than another developer in some ways, because there aren't two independent minds trying to work with each other.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#438

Post by dekhn »

ofjcihen wrote: post #76
simonw wrote: post #74

Earlier quoted context omitted.

I've written tens of thousands of lines of tested, working code that I would not have written otherwise, and that code is useful to me. I effectively get to operate at the rate of a small team of engineers - I know that because I've managed small teams of engineers in the past.

> that I would not have written otherwise I think this is the part I struggle with. The code I write makes me money or is a way of teaching me something, both of which are reasons that I would write the code regardless. I don’t think I have any projects in mind that I’d be willing to spend half of a car on that I also wouldn’t have written myself. Obviously just a personal take though. I’m glad you get the usage you…

I reached my own productivity limit on several projects (in my case, I'm building a fully automated microscope that uses realtime computer vision to solve a number of longstanding problems with microscopes). As much as I'd want to write the code for it, I hit a wall when it came to debugging some particularly tricky issues- either I couldn't do it, or the time investment was too high.

I use Gemini/ChatGPT/Claude to do that work and it unblocked the enjoyable parts of the project while taking care of the tedium.

I also find LLMs help me learn faster because they can often take a paper and turn it into working code, which I find to be a very slow process.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#439

Post by kristianp »

Animats wrote: post #169
ValentineC wrote: post #104

> I noted that my own token usage comes to about $1,000/month against each of Anthropic and OpenAI - which currently costs me just $100 per provider thanks to their generous subsidized plans for individual subscribers. Do we know that AI providers are going to keep these per-token prices, or eventually lower them because of competition from China? Many lower-budget individuals are now moving to China open weight mode…

Raise them, more likely. NVidia says that GPU hardware prices won't decrease until at least 2030. The world is out of fab capacity.

> The world is out of fab capacity.

Can anyone expand on this point? I read an article saying that the big AI co's datacentre spend was a bunch of lies because they can't build datacentres at anywhere near the rate they want to.

Re: Uber's $1,500/month AI limit is a useful signal for AI tool pricing

#440

Post by satvikpendem »

dakolli wrote: post #384
WarmWash wrote: post #349

Earlier quoted context omitted.

They'll ban them because (unless run locally or self-hosted) they are just data capture tools for the China.

Please explain to me how that works. If I download gguf file and run inference with it, how is it collecting and sending data back to China? This makes no sense, 99% of the people using Chinese models are using them via Western inference providers who are running them and serving them to people over openrouter or whatever. If anyone is stealing your data it would be an American or European inference provider. A model…

> unless run locally or self-hosted
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