I'm not really sure I understand the excitement around this. It seems like the implication is that if retail price > employee salary, you are replacing employees with AI spend? Yet, anthropic's head count has nearly doubled since last year - so, in a company where nearly half of that head count is engineers, but claude is "writing 90% of the code," what is everyone doing then? You would think, if the hype feeling around this held true, that the output would be going up and costs remaining stable. Costs rising as you scale is not a new thing but that's not really what AI promises. It sounds to me like the retail AI spend per employee is very high. What is the appeal of that?

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crazygringo an hour ago | parent [-]

Imagine an employee is 1x productive without AI.

Now spend 0.5x their salary on AI, and they become 5x productive compared to no AI.

Now spend 1.1x their salary on AI, and they become 20x productive compared to no AI.

It's still obviously worth it to spend the 1.1x. But it is truly remarkable that the biggest cost of hiring a knowledge worker is no longer their salary, but their AI usage.

There is no implication here that employees are being replaced by AI spend, as long as all of the productivity is generating profit. The AI usage still needs a knowledge worker to direct it in ways that it can't direct itself, so you still need the employees.

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JohnMakin an hour ago | parent | next [-]

> Now spend 0.5x their salary on AI, and they become 5x productive compared to no AI. > > Now spend 1.1x their salary on AI, and they become 20x productive compared to no AI.

This is what I am getting at. If this were true - and I've yet to see evidence it is, despite some anecdotal evidence (organizationally, IME, it's about 2-3x for power users, and probably a net loss of productivity in certain areas) - why would their headcount be growing so much still YoY, pretty much doubling every year. If the AI is 10-20xing why such a big jump in headcount? Yes, the numbers are shiny, the growth is apparent, I would just expect with this AI narrative they'd be "doing more with less" as this thing improves every year.

> The AI usage still needs a knowledge worker to direct it in ways that it can't direct itself, so you still need the employees.

This is the story AI sells though, and Anthropic has participated in it heavily. Yet, their interview process requires hard skills and doesn't let you use AI, so clearly, what you're saying is correct, it just doesn't really align in my head with the whole knowledge worker being replaced narrative.

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crazygringo 16 minutes ago | parent [-]

I mean, just what I did this morning with Claude would have taken me 2 weeks on my own. So 20x is pretty reasonable for certain types of engineering.

But it's also true that when I'm working on 2 things at once, the bottleneck is me. I'm spending all my time giving Claude direction that it can't give itself.

So you basically have to separate out the tasks where AI can produce a 20x productivity boost, and the stuff where it can't help at all.

There's still so much stuff where it can't help at all, you need real human employees for that. That's why Anthropic is continuing to hire at breakneck pace.

And that's what I'm saying -- knowledge workers aren't being replaced. They're just accomplishing tons more work, and companies aren't running out of work to do.

	▲	JohnMakin 14 minutes ago \| parent [-]
		Sorry, I know this is the story, but am I expected to believe that Anthropic would need 20,000+ engineers in their org without their use of AI? I do not believe that is close to true.

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Aperocky 36 minutes ago | parent | prev | next [-]

They are 20x productive on the old KPI.

And the product now iterate 2 times faster with 10 times more bugs and customers are pissed.

Looking at you Apple: https://aperocky.com/blog/post.html?slug=apple-watch-sucks

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advael 33 minutes ago | parent | prev | next [-]

Yes, one can quite easily make quite fantastic numbers fall out of simply applying arithmetic and not dealing with messy propositions like grounding those numbers in any kind of real world outcome.

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an hour ago | parent | prev [-]

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