> And there are reasons to even be really bullish about AI’s long-run profitability — most notably, the sheer scale of value that AI could create. Many higher-ups at AI companies expect AI systems to outcompete humans across virtually all economically valuable tasks. If you truly believe that in your heart of hearts, that means potentially capturing trillions of dollars from labor automation. The resulting revenue growth could dwarf development costs even with thin margins and short model lifespans.

We keep seeing estimates like this repeated by AI companies and such. There is something that really irks me with it though, which is that it assumes companies that are replacing labor with LLMs are willing to pay as much as (or at least a significant fraction of) the labor costs they are replacing.

In practice, I haven't seen that to be true anywhere. If Claude Code (for example) can replace 30% of a developers job, you would expect companies to be willing to pay tens of thousands of dollars per seat for it. Anecdotally at $WORK, we get nickel and dimed on dev tools (better for AI tools somewhat). I don't expect corporate to suddenly accept to pay Anthropic 50k$ per developer even if they can lay off 1/3 of us. Will anyone pay enough to realize the capture of "trillion dollar"?