Some napkin math -- total global labor compensation is about 50% of the GDP, which puts it in the USD 50 - 60 Trillion range: https://ourworldindata.org/grapher/labor-share-of-gdp

This source claims that knowledge workers alone (probably because they are paid much more) account for 35 - 50 Trillion of that: https://github.com/danielmiessler/Substrate/blob/main/Data/K...

If LLMs can boost their productivity even by an average of 5% (studies from ~2024 put it in the ~30% range depending on task) that is ~1.5 - 2.5T in value annually. Even if the AI industry can capture a fraction of that, that is a huuuge monetization opportunity.

Note, at 5% productivity boost, humans are not just in the loop, they are the loop. AGI or large-scale replacement of humans is not even needed, but the financial opportunity is already immense, and it scales with how much human productivity can be improved (i.e. how much work can be offloaded to LLMs.)

Now, I don't think AGI will happen soon (or has already happened, depending on how you define it) but I do think humans will be a much smaller part of the loop and large-scale job displacement will happen once companies figure out how to properly use AI.

At this point, the financial upside for the AI industry is extremely high but will be limited by the social turmoil that will inevitably ensue (which we're already seeing brewing in the data center backlash.)

I want to propose alternative reality where 1.5-2.5T in value doesn't go to a handful of companies. Instead it turns out to be like restaurants where this gets distributed to lots and lots of small, local, mostly interchangeable teams. There will of course be some super star "chefs" leading the industry and setting trends and some "restaurant chain" like big businesses and supply chain for all of this.

I am deeply surprised by the silence of philosophers, sociologists, liberal arts majors, economists. Where are the think tanks who contemplate and debate the societal aspects? The tech is advancing full steam but the "other side" doesn't feel anywhere nearly ready.

> Note, at 5% productivity boost, humans are not just in the loop, they are the loop. AGI or large-scale replacement of humans is not even needed, but the financial opportunity is already immense, and it scales with how much human productivity can be improved (i.e. how much work can be offloaded to LLMs.)

The studies I've seen recently (at least in the software space) put it at something like a 10% increase in coding speed, which for me would probably translate to something like a 3% increase in productivity. I spend a lot more time on things like getting agreement between teams, documenting approaches to things that don't exist on the wiki, etc, that LLMs are significantly less effective at. Or just can't do; no one will be happy if I send an LLM instead of me to meetings.

I suspect a lot of roles are like that. They give a 10-30% boost to the core role function, but that core role is still only 30-50% of what you do.

> that is ~1.5 - 2.5T in value annually

That seems really large, but it's ~2-3x Walmart's yearly revenue, and OpenAI and Anthropic both have estimated valuations that compare to Walmart's market cap. And this is before we consider that they need to do it for cheaper or why would anyone bother. Realistically, potential revenue is probably half that at best.

It's also before cutthroat pricing really kicks in. People are willing to pay for Claude right now; I still suspect that as time goes on people will start looking towards Deepseek/GLM/etc models that provide 95% of the performance at 10% of the price. That'll cut the market even further.

The question is how much demand for knowledge work swells as prices fall, and whether that's a soft landing or a crash.

I’d also point out that LLM inference revenue already totals more than 100B annually based on publicly reported numbers. Almost none of that is replacing knowledge workers. Almost all is increasing their productivity. So empirically what you describe is already happening to a nontrivial degree.

You’re trying to apply value based pricing (infinite margin upside) to a commodity.

Pre-bubble pricing: $1400 gets a 128GiB iGPU optimized for inference. Glm and kimi need 800-1000GiB. Call it 1TiB. The $1400 boxes could be ganged into sets of 4-8, with a switch. Call the switch $1000.

Each box has a TDP of 250W. 8 x 250/120V = 16.666A, or one household circuit in the US, so no new power infrastructure is needed.

$1400 x 8+1000=$12,200. Assuming standard five year depreciation, that’s $2440 a year. There are a billion knowledge workers alive today. So that’s $2.4T annual revenue. Average net profit margins on computer hardware are 4.3%. That works out to $105B net income, globally.

So, I guess the question is whether the (currently #2) open weight models provide $1.4-2.4T less value per year than the #1 and #3 models, and, if so, if customers can measure this, or are willing to spend 2x more and deal with censorship, data theft, intentional enshitification, sabotage, ads, product placement, etc, to get the slightly “better” model.

Also, note that my numbers assume moore’s law stopped for all time in 2024, but we’ve seen HW improvements since then.

> If LLMs can boost their productivity even by an average of 5% (studies from ~2024 put it in the ~30% range depending on task) that is ~1.5 - 2.5T in value

Minus the cost of inference, that might not be the boon you're making it out to be. I hear what people around here are spending on their api and I'm skeptical that these tools are making me that much more productive.

Personally, for assisted development, I haven't seen much progress in a while.

What a load of nonsense lmao.

Pls stop posting you are creating noise.