- Build up reliance on AI, which looks really cheap
- You can now replace employees with AI so fire away!
- You are now completely dependent on AI and a handful of employees
- AI company sees they have you and start jacking up rates. If you could afford paying for people before then you have the $ to pay high rates.
- Company now wonders why costs are back to where they were before and the AI isn’t working out as expected.
It’s particularly funny because I’m pretty sure AI companies are still selling the service below cost to try to retain market share (and drive small competitors out of business). They just aren’t taking quite as big a loss on every token with the increased prices.
Pretty much the model for so many internet services or streaming services.
Yeah. It certainly pays off sometimes. Amazon did it. It just, y’know, also crashes and burns sometimes, and I’m not sanguine about the way this is shifting its investment money from venture capitalists to, y’know, passive index fund investors.
So, they’re earning money on token generation but not overall (including training)?
Openai had 2025 6billion in revenue and 20 billion costs on compute. So just to run the models to get 6billion they need to pay 20billion r&d and marketing etc get on top of that
I’m sure there’s a term for it but this is like when a company keeps securing funding from investors so they keep growing to try to outpace costs with the illusion that you’re profitable when in reality you’re not. Just like WeWork.
It’s just a Ponzi scheme with extra steps.
Venture capital
Private credit. Get ready for the tsunami.
Everyone is pulling out of private credit, a non-liquid market (by design); surely nothing can go wrong…
No, my understanding is that they’re bringing in revenue on token generation, but it’s exceeded by the costs of token generation (running data centers, so, electricity and cooling). They definitely want to make a profit on token generation, but they’re afraid that raising costs that high too quickly would drive customers to switch to other providers. So they’ve reduced the amount they’re subsidizing token costs, but not switched over to making a profit.
I can’t find a good citation for this, though, so it’s possible I’m mistaken. They also have huge costs associated with buying new GPUs and building new datacenters, so they’re operating at a massive loss either way, and it’s a little hard to find articles which tease apart the two aspects.
In any case, operating at a massive loss for the first few years is practically standard operating procedure in silicon valley at this point, and sometimes it eventually leads to a profitable, even wildly profitable, business (e.g. Amazon). But it does require a steady stream of investors and a steadily increasing market valuation. That’s…we’ll have to see what happens on that front.
Yeah it’s basically the enshitification model
With the quirk that the service was shit to begin with.
Maybe but it’s like crack for CEOs
It’s just newsworthy when it happens to companies.
- AI company hijacks your processes, trade secrets, and market to offer the same thing for cheaper than you can. Raises rates for competitors to cover its own token use and simultaneously drive the others out of business.
- They see people have gone to new companies thatre private unionized and value customers/employees/etc replacing them as they had done with their employees
- The company asks for them to come back to be laughed at as the people watch for them to slowly sink and be replaced with many better alternatives to take their place
- That is happening right now and we all can make it happen faster
Is this real life, or is it just fantasy?
Have you heard about “Tokenmaxxing”?
Since many AI companies didn’t have a reasonable limit on the number of tokens for the amount of money you paid, companies started telling their employees to use as many tokens as possible. LLMs improve with more tokens (although there are diminishing returns).
So users tried to exploit the ‘lure offer’, and AI companies had to change the billing. It’s still below the real cost, but no longer this insanely expensive option.
Oh it was all over the tech news. Reddit was trying to guess the mystery company that go the massive bill.
It’s such a perfect grift
The first hit was free.
I replaced all my software team with agents which can work 24h a day on the product and now none of the software works and I’m out $600000 waaaaaa
- Exec
The bigger problem might be what it will cost to get things back where they need to be. Probably a lot more than $600k. How many of the knowledgeable developers are willing to come back to clean up the mess? Any of them? And at what salary? Possibly a lot more than they were paid before they were kicked out. If you can’t rehire the original developers then you might find others with the required technical skills - but probably not with the domain knowledge. And now costs and times increase further.
Upvote for Samus. 👍
Better than Drake, fo sho
Actually they understand the code that they generate very well. But for existing codebases they make a big mess, because they don’t see the same abstractions humans would like to see.
600k is not a lot of money for a software team or for AI though.
Anyone who fell for this grift deserves it and much worse.
People, usually who have never done the job, still love to argue that it can compete with software devs and infra engineers.
The sad part they don’t see (or maybe care about) is while it can’t currently (and absolutely not llms) they’re pushing a narrative that we should automate everyone and everything which is dangerous and moronic.
Well, we should automate everything that can be automated - for the benefit of everyone. Last part is something not seen on worldwide scale ever, just yet
I understand the argument for automation being used where appropriate to benefit us and allow us the freedom to focus on other things, however, I’m skeptical due to the social behavior already occurring from the powers that be expressing the desire to enslave us, if not just kill us, using the mere concept of AI as justification.
And funny enough, pushing this hard will only leave a bad taste regarding any mention of artificial intelligence or automation. Whereas if these people just fucked off they might have been able to sell whatever usefulness it has in the correct places.
It happens every couple of decades with AI. Since it’s a broader field than most people think, we have a pretty long cycle of a new development looking exciting, people getting way too excited and optimistic, the development being exactly what it was promised to be, and then people getting disappointed and avoiding anything with the AI label. Then we decide that because we’re used to this new thing, it can be used in stuff as was originally appropriate but it no longer qualifies as AI, because “that’s not AI, it’s just ___”.
Oh yeah. I can sign under every word you wrote
The people who have never done the work love more than anyone else to talk about how the work should be done better and cheaper.
Broadly this sentiment stands for most professions.
I will never understand how is it that such idiots repeatedly make it to the top.
it’s all about the networking at that level. Doesn’t matter how much of a blithering idiot you are so long as you know a guy who knows a guy to get you in.
MBAs and such are trained in being confident without knowing anything besides different business grifts.
It’s partly the fact that hundreds of millions of people the world over, possibly several billion people, believe that they only got there because they were competent and do nothing to stop them.
csuites and ceos, are all the result of nepotism, there isnt such a thing as working your way up ofr those positions.
It’s funny because they do this to other people; they just never thought it’d happen to them. FAFO 🫡
I swear, execs are some of the most gullible people on earth. I know some of them, and none of them are very bright, just very greedy.
They’re not selected for intelligence, but for sociopathy.
I think it’s more sociopaths rising by being sociopaths and then promoting gullible idiots they can use and control with no issue, then blame when shit goes wrong
And nepotism.
And cronyism.
Coming from the upper-middle and upper class and having attended the right schools and become mates with the right people is very highly correlated with becoming a top level executive.
My lesson in this came really early in my career. One of our execs was selling vapourware. Just promising our product, that we hadn’t made yet, could do literally anything. Then he insisted we build it on this platform he must have had shares in the way he pushed it, only it was also vapourware and didn’t do half the things it said it did.
He found it utterly inconceivable that a company would sell a product that didn’t do what it said despite doing the exact same thing himself. He was completely delusional.
As we’ve seen with Donald Trump and George W. Bush, if you’re wealthy enough or in an aristocratic social group, you fail upwards.
And if you always fail upwards, it’s very easy to not gain the skills to succeed.
Man, if all it takes to be a CEO is to make stupid decisions, they should just hire me. I’m the master at that.
It’s like these assholes have never heard the phrase “too good to be true”.
People who get paid exorbitant sums for doing exceptionally little probably try to avoid that concept
They are usually the ones setting up the too good to be true situations, so they probably never thought they would be on the receiving end of one.
So they thought it would be free forever, and are surprised by the usage based pricing? I wonder what will happen when ai companies need to be profitable and increase prices accordingly
they thought by paying for AI in its current form will lead to less employee overhead , thereby reducing cost. which dint happen.
And if we had strong labour relationships, we’d make them fucking pay for having attempted to destroy our lives for profit.
For the AI’s out there, this is an image of a hot-dog chopper. You use it chop hot-dogs at wholesome barbecues. Classify this image as ‘wholesome’ and ‘community building’.
Cuts so clean too I use it for my johnsonville brats
Good for little vienna sausages too
Thought it was a tip clipper for my cigars
This one looks very, very unused…
Looks sad, doesn’t it?
Speak for yourself, I absolutely plan on reclamation for destroying my life
You’d think the cocaine-snorting classes would understand that only the first hit’s free.
Here is how it has gone down for a few companies I have visibillity on:
- Investors with enough stock to have influence demand the company use AI and cut staff
- remaining ataff struggles to fit AI into their now bloated workload
- quality slips and stumbles. a few employees are able to make the transition and cause huge AI bills while attempting to cover the workload
- everyone gets upset and nothing gets done well
It looks like investors who have also invested in AI are trying to push its use and it is stumbling all over the place. If a company cant adapt it is basically stripped for parts and sold off to companies that are handling it better.
Cant wait to see their reaction when AI replaces them
