| ▲ | Corporate America Is Starting to Ration AI as Cost Skyrockets(wsj.com) |
| 48 points by 1vuio0pswjnm7 2 hours ago | 43 comments |
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| ▲ | tyingq 23 minutes ago | parent | next [-] |
| The abrupt swing in many non-technology company IT departments from "hey developer, you aren't using enough tokens" to this is just too funny. And I'm seeing almost no self-awareness from leaders. They are making decisions about things that they just don't understand. And are completely unworried about it. Just blindly following whatever the news cycle is about AI. |
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| ▲ | datakan 20 minutes ago | parent | next [-] | | The closer people live to the consequences of their decisions the more rational they become. Until leaders(and I use that term loosely) are held accountable, the insanity will continue. | | |
| ▲ | greesil 10 minutes ago | parent [-] | | Their only accountability is to the stock price. The insanity will continue. |
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| ▲ | sdeframond 5 minutes ago | parent | prev | next [-] | | Groups resist to change - the bigger the group, the most resistance there is. As a leader, pushing for rapid change cannot really be nuanced lest the push dissipates into the organization's entropy. | |
| ▲ | qoez 18 minutes ago | parent | prev | next [-] | | I feel like most successful businesses have such a moat of required capital to compete with them that even tho in theory poor decisions like this is supposed to give opportunities for entreprenuers to hit when the big dogs make a wrong move, it doesn't end up happening. | |
| ▲ | onlyrealcuzzo 20 minutes ago | parent | prev [-] | | The actual cost is going to drop 99% in ~4 years. How much that makes it into enterprise pricing is TBD, since none of the hyper scalers are making money yet of selling AI inference. Almost all businesses are ahead of the gun. For most of their use cases, AI is either not yet good enough on its own, or good enough but too expensive. No one wants to get left behind, so everyone's trying to get onto it now, even though it's not ready for what most enterprises want to do with it. It's easy for them to look at a small startup without billions of lines of legacy business logic debt and see them having success and wonder why they can't have just as much - or more - why they're bigger so they should have better and more success, right??? Wrong... But when it gets ~99% cheaper for local inference over the next 4 years, at the same time the price per watt improve 4x -> a lot of those cases will start to pencil out. | | |
| ▲ | krona 16 minutes ago | parent | next [-] | | > The actual cost is going to drop 99% Do you mean the marginal cost by the producer, or the cost on the consumer? I can't see the price of electricity falling much, and the demand curve is apparently exponential if the hype is to believed. | |
| ▲ | packetlost 16 minutes ago | parent | prev | next [-] | | I don't see how this is even remotely true. Unless there's some super breakthrough into a fundamentally different architecture, there's not really a path to a 50% reduction in price, much less a 99% reduction. | |
| ▲ | datakan 19 minutes ago | parent | prev | next [-] | | What makes you think prices will drop? Everyone I’ve spoken to believes they will only skyrocket. Genuinely curious | | | |
| ▲ | bakugo 16 minutes ago | parent | prev [-] | | Prices have been very obviously trending up, not down. Even open weights models are becoming more expensive with every release. Computer hardware is ballooning in price. |
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| ▲ | amazingamazing an hour ago | parent | prev | next [-] |
| AI is overhyped. I have yet to see an end user product that in itself isnt a wrapper around LLMs that is impressive created by LLM assistance. I have also yet to see dramatic increases of revenue of companies using LLMs that don't involve selling things in its supply chain. Is it a nice affordance? Sure. 1T capex good? No. If it was so good I would expect to see 2005-2015 advancements yearly. Meanwhile China is blowing past the world with real improvements in the real world- solar, EVs, etc. meanwhile people keep making their fancy sans serif websites about todo apps, faster than ever before. Useless. |
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| ▲ | criddell a few seconds ago | parent | next [-] | | [delayed] | |
| ▲ | dawnerd 17 minutes ago | parent | prev [-] | | Productivity gains seem like it’s at best a wash when you factor in the massive tech debt cleanup and additional time needed to spec and review. |
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| ▲ | gonzalohm 2 hours ago | parent | prev | next [-] |
| In my opinion, the problem is not even the cost. The problem is that people are using AI for running recurrent stuff instead of writing code to automate it. For example. Imagine that you are comparing two documents (let's assume diff doesn't exist). You could ask an AI to compare the differences from you or you could use AI to write a tool to do it. For whatever reason, people are starting to go with the former not realizing that now they basically have to pay to compare documents. |
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| ▲ | bluejay2387 34 minutes ago | parent | next [-] | | I have exposure to AI initiatives at several companies including a few F500's. I have seen teams dump huge logs into frontier models that took hours to get so-so results that we were able to replace with a few lines of python code at 1000 times the speed and 100% accuracy. When asked why they were doing this they literally said "because we don't understand the subject matter so we were depending on the AI". I saw one team file a complaint with a vendor about a frontier backed coding harness and it's inability to consistently format headers because they were using it as a reporting engine. When I recommended they just use the coding tool to write code to generate reports you would have thought I had just cured cancer from their response. I frequently see people complain about the fact that AI is going to take their jobs and then see them gripe about the fact that AI is 'worthless' because it can't do more of their job than it already does. It's easy to see the difference between the people seeing 10x productivity gains from leveraging AI and those who aren't and it's not the AI. | | |
| ▲ | sbarre 5 minutes ago | parent [-] | | I've heard this framed as "AI raises the floor by 2x or less but raises the ceiling by 10x or more" |
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| ▲ | throwatdem12311 26 minutes ago | parent | prev | next [-] | | Laziness, pure and simple. The inevitable consequence of “the LLm is the compiler now”. And what do you even expect people to do when they are forced at threat of termination to use AI for everything as much as possible? Not to mention people are being pressured to do insane thing like review hundreds of pull requests per day and deliver like 15 features per week so OBVIOUSLY there isn’t time to build out proper tooling. Just shove everything in a prompt and call it a day. Some people have families to feed, just do what you’re told. | |
| ▲ | jerojero 5 minutes ago | parent | prev | next [-] | | Because you look at the work from the perspective of a programmer, not the perspective of a regular person. Normal people have never gone around automating their work. The most automation they do is dynamic tables on excel sheets. I obviously know building a tool that can programmatically do something is a better solution, but I think that requires a fundamental shift in how people work. People need to be told by someone "this is how you should be using the AI" but right now they're simple told "use the AI". | |
| ▲ | m3nu 5 minutes ago | parent | prev | next [-] | | 100% this. For my own company I mostly build deterministic workflows that may have a simple AI step in the middle using an appropriate Chinese model in a very limited way. I wouldn't want to burn tokens to satisfy some metric. With this AI is a fallback and not the default. Sounds like large companies have it backwards. | |
| ▲ | CompoundEyes an hour ago | parent | prev | next [-] | | Agreed. I’ve been telling my team to build up internal packages so we can push all that ad hoc reinvention into something more tangible and deterministic. Invest the $$$ in inference into something the agent can reach for next time that’s neutral and consumable by other code to reduce future spend. | |
| ▲ | bilekas 23 minutes ago | parent | prev | next [-] | | It's this and worse. To use your example, it's like people using AI to write a diff algorithm, incorrectly, then using AI to fix it, because they don't know that diff exists already. Lazyness and starting development with a very low level of understanding. People think lowering the barrier to entry is a good thing, when in reality there are just fundamentals and things you just have to know before you can start using a tool like llms properly. | |
| ▲ | rich_sasha 17 minutes ago | parent | prev | next [-] | | Isn't that the supposed point of it though? At least how it is marketed/hyped. Don't use your brain, you don't need one, spend all your thinking energy on... dunno, something else, and leave all the "mundane" stuff to AI. Just pay for the tokens, it's going to make you 10x more efficient, the $1000/month is worth it. | |
| ▲ | dawnerd 20 minutes ago | parent | prev | next [-] | | Same with writing boilerplate code. It’s been a solved problem yet here we are. | |
| ▲ | plmpsu an hour ago | parent | prev | next [-] | | AI can do things around semantic analysis that a deterministic diff tool cannot. I understand and agree with your point though. | | |
| ▲ | bilekas 21 minutes ago | parent [-] | | I'm curious if you could give me an example of something that couldn't be down deterministically. We have fuzzy search/matching too ? Regex is a monster when used correctly. |
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| ▲ | avereveard an hour ago | parent | prev | next [-] | | Same, even opus favor short term solution and scripts with a billion flags that constabtly require rescanning to understand how to launch it is a constant struggle to get it to build sane default and reusable scripts that run with minimal parameters | |
| ▲ | r_lee 38 minutes ago | parent | prev | next [-] | | it's all about cost at the end of the day. if you're allowed and encouraged to tokenmaxx, then of course this'll happen. | |
| ▲ | cyanydeez 28 minutes ago | parent | prev | next [-] | | Oh no! People are doing what they've been told to do! | |
| ▲ | jgalt212 37 minutes ago | parent | prev [-] | | I agree, but even this use case isn't the most wasteful. The interwebs says Agentic consumes 50% of token use, but I'd hazard this number is north of 90% for many shops. My cynical view of Agentic is its sole purpose is to make "number go up". | | |
| ▲ | id 11 minutes ago | parent [-] | | Look at me! I'm the smartest guy. I've wasted 10M tokens! No one has wasted more! |
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| ▲ | cs702 15 minutes ago | parent | prev | next [-] |
| There's an old saying, "in the land of the blind, the one-eyed man is king." Here we have the opposite: In the land of the one-eyed, the blind are leading. The blind in this case are all those executives and managers who don't understand much about AI's current potential and limitations, and treat it like a magic button that solves everything. The one-eyed are rank-and-file employees who maybe sort of know a little more about AI. |
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| ▲ | wg0 12 minutes ago | parent | prev | next [-] |
| The other day we (wrongly) concluded that product market fit has been achieved and now the rivers of hot molten milk chocolate and honey are all that's in the future etc. |
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| ▲ | 1970-01-01 19 minutes ago | parent | prev | next [-] |
| Would have been nice to see 'soaring costs' with numbers. WSJ could do better here. Hundreds of thousands of dollars a month is nothing compared to how much they take with better financial models. |
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| ▲ | scronkfinkle an hour ago | parent | prev | next [-] |
| On the one hand, organizations are without question using LLM's well beyond what is actually necessary, and as reality kicks in they're forced to scale back accordingly. However at the same time, on intervals counted in months, we're seeing breakthroughs both in hardware and software that dramatically reduce the cost of inference. Between corporate FOMO and the rapidly decreasing costs of actually running LLM's I'm interested to see at which side of the spectrum these two meet |
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| ▲ | dangus 6 minutes ago | parent | prev | next [-] |
| I’ve seen comments on other threads on this subject the general idea that these article headlines are overstating the pullback from AI. In other words, the news cycle is looking for an AI story that lands with readers, and that the example
of Uber blowing through its AI budget and Microsoft discontinuing use of Claude internally are not good indicators. I agree that those aren’t good indicators. However, at some point we have to remember that CEOs and boards of directors are just regular morons who read the news the same way everyone else does. At some point, if a lot of corporate leaders associate AI with mediocre results, high costs, and public backlash, they might just start saying “this juice isn’t worth the squeeze.” |
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| ▲ | marcosdumay 34 minutes ago | parent | prev | next [-] |
| There's a paywall, but it's an interesting question how much of the recent explosion of the AI companies revenues is because of the explosion in prices, and how much their customers will accept the increased prices. |
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| ▲ | throwatdem12311 22 minutes ago | parent | prev | next [-] |
| It will be interesting to see to see Anthropic’s “revenue bubble” pop as this happens. At least it should hopefully free up some capacity. |
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| ▲ | checkaiclaims an hour ago | parent | prev | next [-] |
| As a developer, I don’t think it’s just that costs are going up. I’m also seeing more people lately talk about “vibe slop”. |
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| ▲ | elevation an hour ago | parent | prev | next [-] |
| Another reason to favor using AI to build automation instead of relying on it in prod: the risk of war and global instability. If LLMs are genuinely helpful or even decisive in a military engagement, you can expect any host country to commandeer whatever data centers they need, leaving commercial entities to bid up the prices on the leftover capacity. Another risk is that data centers are a great target for cyber warfare. It’s ideal if your business can leverage LLMs when they’re online but continue to operate profitably when they’re offline. |
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| ▲ | ChrisArchitect an hour ago | parent | prev | next [-] |
| Some related discussions: https://news.ycombinator.com/item?id=48268871 https://news.ycombinator.com/item?id=48238896 https://news.ycombinator.com/item?id=48307098 |
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| ▲ | feverzsj an hour ago | parent | prev [-] |
| LLM doesn't work, let alone profit. |
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