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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

#731

Post by overgard »

inemesitaffia wrote: post #617
dgellow wrote: post #612

Earlier quoted context omitted.

Those data centers are specifically for AI workloads. Let’s say everything crashes and we now have all the data centers, what do you do with them? GPU are pretty specialized hardware, without AI a data center full of outdated graphics cards isn’t really too valuable. It’s really not obvious the infrastructure we are building for AI stuff is something that will benefit humanity over time. Without talking about the fac…

You sell the GPU's to remote gaming companies. Replace servers with regular compute.

I imagine that the big incentive for remote gaming would be massive price increases in gaming hardware driven by the AI industry...

If the AI industry collapses, it would seem like the price of DDR etc. would dramatically decrease and lower demand for remote gaming

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

#732

Post by overgard »

PunchyHamster wrote: post #630
dgellow wrote: post #612

Earlier quoted context omitted.

Those data centers are specifically for AI workloads. Let’s say everything crashes and we now have all the data centers, what do you do with them? GPU are pretty specialized hardware, without AI a data center full of outdated graphics cards isn’t really too valuable. It’s really not obvious the infrastructure we are building for AI stuff is something that will benefit humanity over time. Without talking about the fac…

> Those data centers are specifically for AI workloads. Let’s say everything crashes and we now have all the data centers, what do you do with them? You just run the models and sell the tokens. The demand will still be there even if there will be less money in chasing new frontier model > GPU are pretty specialized hardware, without AI a data center full of outdated graphics cards isn’t really too valuable. AI accele…

You still have to pay for power and water. Those are not insignificant costs.

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

#733

Post by nphardon »

conartist6 wrote: post #350
nphardon wrote: post #347

It's wild; at my shop in Silicon Valley they dropped us from unlimited use to 60% prem budget on copilot. People are walking around like zombies.

Poor people! Thinking takes calories

This is funny, i get it; but the idea that using LLM's precludes thinking is silly. We're doing some heavy lifting over here. There's a lot of noise around pie in the sky ai show n tell projects, but then there's quieter real work being done as well, with highly skilled engineers. 100x is a thing.

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

#734

Post by minraws »

phreeza wrote: post #575
lavezzi wrote: post #228

Earlier quoted context omitted.

They are willing to tolerate it now, which is quite a switch up from the free for all we had a few weeks ago, and if they aren’t able to tie in this new ~$1500p/m cap to demonstrable productivity and revenue increases then that will be kneecapped even faster

There are plenty of expenses in this order of magnitude that are not tied to direct increases in productivity. I think it may become a serious hiring impediment for companies to be really skimpy on these budgets for example.

There was a time when some employees wanted 1000$ per month for rent, imagine that.

It's absolutely insane, 1500 * 12 is north of 17K dollars, I know that in Google outside of few specific cities and roles.

Getting a 17k bump in salary is good enough to switch, if I was being 17k extra I am more than willing to use my local qwen and hand code most if not all stuff.

Companies can pay for code review tools to make life easier but writing code with AI if it's 10-15% pay cut is just too much.

Everyone is happy right now because this money hasn't been a line item in your salary/benefits.

Imagine 10k yearly AI allowance, I will probably just ask to keep that money.

All the work I do if I was judicious I could do just as much with a 20$ spend or on a local model.

Few tasks need Mythos like models, and if your task does you are already doing too much with AI

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

#736

Post by newsoftheday »

thundergolfer wrote: post #373

> That means each employee's AI spending cap is ~11% of that median compensation package. Probably better to use the fully-loaded cost of the engineer, which is much higher than their compensation package. The fully-loaded cost is the total cost paid for the labor power of the engineer, and it includes big ticket items such as office space, food, equipment, insurance, payroll tax, fringe benefits, recruiting costs. I…

> $330k/year

For a traditional software engineer? I retired last year after 3 decades and my salary was about the same as it was in the early 2000's at the last company I was at. Maybe I should have negotiated more but I thought only FAANG paid traditional pre-AI engineers more than $250K.

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

#738

Post by treis »

dgellow wrote: post #164
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…

One aspect Paul Kedrosky mentioned recently is the concept of „duration mismatch“. The price per token goes down over time (either because the AI vendor reduces due to competition pressure, or because customers are now incentivized to use older cheaper models). But datacenters are financed through debt, with the assumption their revenue increases over time. Quoting him: „[AI vendors are] paying for a fixed cost with…

Relative to the current usage demand for tokens is effectively unlimited. If the price of tokens go down people will send more tokens to compensate. We are very very far away from a cost per token where people run out of things they want to send through an LLM.

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

#739

Post by SR2Z »

dubcanada wrote: post #686
xyzsparetimexyz wrote: post #666

Earlier quoted context omitted.

And Chinese electricity prices are some of the lowest

Don't know why people keep parroting this, this is incorrect. Chinese electricity prices are equal or slightly cheaper then most of North America. But significant pockets such as those around the Quebec or other hydro plants are significantly cheaper then Chinese power pricing. Not only that, China may subsidize AI, but so does the US.

China averages 7¢/kWh, almost 1/3 of the US average at 19¢/kWh.

My rates (before PG&E were forced to concede) were as high as 49¢/kWh, a 7x factor.

These are residential rates and not industrial ones, but I hope my point is clear.

China has very cheap power compared to the US, there's a reason why they had to ban bitcoin to get rid of miners.

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

#740

Post by andix »

al_borland wrote: post #458
andix wrote: post #432

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)

But is it an accurate number? Does AI reach diminishing returns after $1,500/month, or is that all they are willing to risk/burn to stay in this game?

> But is it an accurate number

No. There is no accurate number.

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