That’s great that they were able to replace people with equipment that they own and control. Oh what’s that? The price and capabilities of this AI can change at any time?
You need to double employee pay to focus on this. If a person takes home $30K gross, the employer’s likely paying double that.
Your pay is not what the employer pays for your labor. At the low end of the pay scale, it’s closer to double. Worker’s comp insurance, unemployment taxes, HR costs, shitloads of things add up. With AI, they’re gambling on deleting all that overhead.
Yeah. And AWS was supposed to replace on-prem hosting. Except, now, they represent a higher opex cost than even payroll.
I see no reason why OpenAI isn’t just charging peanuts for service to build a gigantic user base who can’t think without it, then jacking the price up to whatever they want — and I can assure you, if Sam Altman has the option to become an immortal trillionaire, he will take it.
Except, now, they represent a higher opex cost than even payroll.
That’s usually because the on-prem equiment was hidden somewhere in capex, not opex.
There are a lot of cases I’ve been involved with where AWS comes out way cheaper than an on-prem solution, once you take all the costs into consideration. But there are plenty of other cases where it has turned out to be more costly, especially if some bonehead attemted a “like-for-like” migration with no effort to minimize AWS service costs. Take every on-prem VM and stand up a corresponding EC2? Replicate the same rat’s next of connectivity that’s in the legacy system? That’ll probably cost you.
That’s great that they were able to replace people with equipment that they own and control. Oh what’s that? The price and capabilities of this AI can change at any time?
Very safe and cool investment.
They have a lot of wiggle room in pricing software when it’s eliminating whole ass people. The software is competing with a floor of 30-40k/yr
Only if it actually can do their job, which is… Doubtful
You need to double employee pay to focus on this. If a person takes home $30K gross, the employer’s likely paying double that.
Your pay is not what the employer pays for your labor. At the low end of the pay scale, it’s closer to double. Worker’s comp insurance, unemployment taxes, HR costs, shitloads of things add up. With AI, they’re gambling on deleting all that overhead.
Fair point!
Yes, and as we’ve seen time and time again, companies are totally cool when operating costs suddenly revert back to what they were years ago.
Yeah. And AWS was supposed to replace on-prem hosting. Except, now, they represent a higher opex cost than even payroll.
I see no reason why OpenAI isn’t just charging peanuts for service to build a gigantic user base who can’t think without it, then jacking the price up to whatever they want — and I can assure you, if Sam Altman has the option to become an immortal trillionaire, he will take it.
That’s usually because the on-prem equiment was hidden somewhere in capex, not opex.
There are a lot of cases I’ve been involved with where AWS comes out way cheaper than an on-prem solution, once you take all the costs into consideration. But there are plenty of other cases where it has turned out to be more costly, especially if some bonehead attemted a “like-for-like” migration with no effort to minimize AWS service costs. Take every on-prem VM and stand up a corresponding EC2? Replicate the same rat’s next of connectivity that’s in the legacy system? That’ll probably cost you.
Can’t see why the upcoming price hikes aren’t obvious. Think these AI companies are going to eat shit forever?
CEOs think on a quarterly basis, exclusively. Any problems that result are next quarter’s problem!
If you are thinking, “gee whiz, that seems like an insane and deeply unsustainable idea,” you would be right.
Have shares in AI API and AI User company.
AI API sucks all the money out AI. Short AI User for the final blow.
???
Profit.
Keep in mind by killing AI User company, you extract money of other shareholders that did NOT pivot.