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Comment by josefritzishere | Hacker News Reader

Companies are learning that even with mass layoffs, AI isn't worth what it costs for most use cases. This is an important inflection point because none of the AI companies are profitable, i.e. they're all still charging substantially less than what it costs to actually deliver the service. With things in that intermediate state, it's hard to know what a future stable state will be like.

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If AI isn't worth what it costs why are some of these companies allowing $1,000+/employee/month?

Matthew Prince of Cloudflare has been outspoken in saying that companies that do not go all in on AI will be left behind. There probably is some value being received in exchange for tokens but it seems quite plausible that some or even much of this spending by companies is driven by fear.

$1k/month is nothing as a hedge against a CEO being accused of causing their company to be left behind in the AI utopia of tomorrow. If you’re in a peer group that rewards risk taking and all of your peers are taking a risk, you’ve got to take that risk too. Better to burn money trying something and then failing, than to not try. Failure is acceptable, missing an opportunity is not.

https://xcancel.com/eastdakota/status/2025221270061580453

“My advice: don’t be a [dinosaur]. I’ve seen this movie before and they go extinct. ”

It's just not very much money for these companies. The source article says Uber allows $1,500 per month, but senior engineers at Uber make $400k/yr ~= $33.3k/month; even disregarding fully-loaded cost, the AI only has to make them about 3% more productive to be worth it.

Partially because they think that once employees put enough context and rules into markdown files they can be fired and replaced by an online subscription.

I'm not convinced that's happening, any good evidence that it is?

The impact of AI on jobs appears to be more in terms of hiring slowdowns: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5425555

> Following adoption, junior employment declines in adopting firms relative to non-adopters, while senior employment trends remain largely unchanged. This decline is concentrated in occupations most exposed to GenAI and is driven primarily by slower hiring rather than increased separations.

The point isn't that it is happening.

It's that enough execs think it can happen.

No actual evidence is required for that.

I used to go above and beyond and take pride in writing decent/good documentation for my team and have gotten a lot of compliments about them.

But I've started to deliberately constrain myself because of what you describe. Sure, I'm not convinced that it actually come to fruition, but just the realization that this is what they're daydreaming about makes me sick so I've forced myself to only do the bare minimum or less now.

AI is Labubu for CEOs.

The value is somewhere else (i.e. being able to brag at the next conference/dinner/awards show and to not feel like a loser)

Once that value is no longer there, I will stock up on popcorn. Sure Labubus are still around and still have "users", but...

The two that I know of are in a phase of trying to figure out what the return is.

Have you considered that that money would have gone to raises or promotions? From that perspective the company nets out while the employee that would have received that money feels the effects of wage suppression.

You could say the same thing about the office snack budget, or the training budget, or the budget for the office holiday party.

No....no not comparable as an on going expense. Also my company cut snacks, training, and off sites for anyone but leadership years ago.

Mass hysteria

Because tech is so deeply hooked on fashion and short-termism that it’ll make both a Temu & Wall street exec blush in envy. LLMs floods both these receptors like the Great flood.

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