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AI revenues are growing fast, but not fast enough

economist.com

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Re: AI revenues are growing fast, but not fast enough

#61

Post by jordanb »

api wrote: post #14
iammjm wrote: post #3

“ According to Mr Yotzov’s study, nine in ten executives report no impact of ai on their firm’s productivity over the past three years.” Brutal stuff.

Here’s what I’ve seen: it can make skilled people more productive by acting like a “mech suit for your brain.” For unskilled people, it creates a false sense of productivity, but if the user of the tech does not understand what they are doing they can’t apply the tool productively or judge its output or deal with the things beyond its ability. So like all other tools before it: it works best in the hands of a skilled…

> it can make skilled people more productive by acting like a “mech suit for your brain.”

If mech suits existed and people actually lived in them they would either get super fat or super skinny. In either case they'd lose all muscle mass.

Re: AI revenues are growing fast, but not fast enough

#62

Post by jensensbutton »

jgalt212 wrote: post #27
softwaredoug wrote: post #10

You really see the first mover disadvantages in US AI labs. And how second movers (open Chinese labs) can disrupt them. First movers tend to get overcapitalized and way ahead of their skis. You saw a smaller version of this in the vector database market (remember that?) where companies like Pinecone were getting billion+ valuations for capabilities which now seem like a commodity. There's vector DB companies now with…

> And how second movers (open Chinese labs) can disrupt them Yes, I will concede this point. But how are the Chinese labs going to thrive with giving the weights away for free? Will they suffer the same fate open source database companies did at the hands of AWS?

If the model is commoditized then the AI race becomes competition over building infrastructure to support it. China is very good at building infrastructure.

Re: AI revenues are growing fast, but not fast enough

#63

Post by [deleted] »

QuantumNoodle wrote: post #58

The thing is, AI is a productivity boost but staff drive all the productivity. The catch 22 is AI is expensive so in order to provide it to everyone they need to reduce staffing. The result is remaining folks are able to produce more but the organization as a whole is not exceeding pre-layoff output. And now things are being dropped on the floor and falling in between the cracks -- which impedes efficiency and veloci…

[deleted]

Re: AI revenues are growing fast, but not fast enough

#64

Post by da-x »

It makes sense that if software turns to a commodity by AI, and models are also commoditized, then distribution is all that matters. Anthropic is therefore attacking other's distribution in order to protect its business. Perhaps they should focus on their own ways of distribution.

Re: AI revenues are growing fast, but not fast enough

#65

Post by pu_pe »

woeirua wrote: post #44
pu_pe wrote: post #35

> Exponential View, a consultancy, counts $175bn of generative-AI revenue, on an annualised basis, in June. In a recent paper Anton Korinek of Anthropic and Patrick McKelvey of the Bank of Canada estimate total “AI services” revenue. Adapting their methodology, we reckon this was $220bn (again annualised) in the first quarter of this year. Ramp’s data imply that 2-3% of business spending now goes on AI, pointing to $…

This is also at the end of the tokenmaxxing era, so I'm not sure I would draw a straight line out from here. A LOT of companies are clamping down on token costs right now.

I wouldn't bet on token consumption going down any time soon. In the past year or so, the increase has been exponential [1].

[1] https://en.macromicro.me/charts/148532/world-openrouter-toke...

Re: AI revenues are growing fast, but not fast enough

#66

Post by api »

jordanb wrote: post #61
api wrote: post #14

Earlier quoted context omitted.

Here’s what I’ve seen: it can make skilled people more productive by acting like a “mech suit for your brain.” For unskilled people, it creates a false sense of productivity, but if the user of the tech does not understand what they are doing they can’t apply the tool productively or judge its output or deal with the things beyond its ability. So like all other tools before it: it works best in the hands of a skilled…

> it can make skilled people more productive by acting like a “mech suit for your brain.” If mech suits existed and people actually lived in them they would either get super fat or super skinny. In either case they'd lose all muscle mass.

All technologies are a double edged sword like this, simultaneously strengthening and weakening.

https://newlearningonline.com/literacies/chapter-1/socrates-...

Humans are tool makers and this is what happens when you make tools.

Re: AI revenues are growing fast, but not fast enough

#67

Post by thrw045 »

jordanb wrote: post #57
woeirua wrote: post #48

Earlier quoted context omitted.

A lot of people are slowly realizing that code generation was not the bottleneck in their internal development process, and waving a magic wand to make that go faster doesn't actually lead to more revenue.

One of the weirdest things about the whole AI boom is the mass formation psychosis where everyone started acting like lines of code written was an important metric for software development productivity. We've known for decades that more lines of code isn't good. Bill Gates was joking about it in the OS/2 days! We've known for decades that the actual creation of the code is the smallest part of an actual software deve…

This is a rewriting of history that I don't really like. Back before LLMs and before that again, it was very hard to write code. That's why so many people asked questions and figuring out how to write a piece of code was a big part of the value add of a programmer. It separated the ones who knew their stuff from the ones who didn't. Yeah sure software design was also important but it was less important than the actual writing of the code, which is why a lot of old code had bad designs. It took decades to figure that stuff out.

Re: AI revenues are growing fast, but not fast enough

#68

Post by WarmWash »

lunar_mycroft wrote: post #55
WarmWash wrote: post #37

Earlier quoted context omitted.

Most people will pocket AI gains for themselves. So from the top it doesn't look like much has changed, whereas workers are trying to offload as much work as they can onto their claude subscription. People in desperation to min/max work per unit dollar, will leverage AI to free themselves from as much work as possible, while still claiming credit for the work. So as the labs start ratcheting up the price, people will…

Wouldn't that explanation predict that lower ranking employees would be more impressed with AI than higher ranking ones? Because what we actually observe [0] tends to be the opposite. Executives are the most bullish on AI, followed by Managers, with employees having the least adoption. [0] https://businesschief.com/news/why-are-executives-using-ai-m...

Those studies are of workers using company provided AI.

They call out the MIT study in the article, which found very low adoption of corporate AI initiatives.

However if you read that study, they found that almost every worker uses AI heavily, but they just use their personal AI account.

Again, people are using their own AI to benefit themselves, it makes the most sense. Using company AI shows that the AI is doing xyz, and maybe perhaps you aren't that valuable. Using your own AI makes it look like you are doing xyz, and you are the valuable one.

Re: AI revenues are growing fast, but not fast enough

#69

Post by Ekaros »

jonfw wrote: post #49
nemomarx wrote: post #26

Earlier quoted context omitted.

If I give you 5 trillion dollars I want to get that back plus a percentage increase on top for my troubles, right? Government programs might run without the expectation of paying back taxpayers but investors are less generous.

Investors can be very generous if they see opportunities for market capture of the next big thing

Also they might not be as smart as they have made out to be. This time it seems they might be spending more to capture market than the market is worth.

Still, there are plenty of people who take their cut of the money on the way. So at least those people will be happy.

Re: AI revenues are growing fast, but not fast enough

#70

Post by yurish »

thrw045 wrote: post #67
jordanb wrote: post #57

Earlier quoted context omitted.

One of the weirdest things about the whole AI boom is the mass formation psychosis where everyone started acting like lines of code written was an important metric for software development productivity. We've known for decades that more lines of code isn't good. Bill Gates was joking about it in the OS/2 days! We've known for decades that the actual creation of the code is the smallest part of an actual software deve…

This is a rewriting of history that I don't really like. Back before LLMs and before that again, it was very hard to write code. That's why so many people asked questions and figuring out how to write a piece of code was a big part of the value add of a programmer. It separated the ones who knew their stuff from the ones who didn't. Yeah sure software design was also important but it was less important than the actua…

> Back before LLMs and before that again, it was very hard to write code. That's why so many people asked questions and figuring out how to write a piece of code was a big part of the value add

This may be true if you work in unfamiliar area or on frontier of programming. But this is not were most of programmer jobs are. That writing code itself is hard is a view of non-programmer. Programmers know that past some threshold of familiarity designing and weighting decisions becomes central problem.

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