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> 1) If a firm spends $99k on compute to replace a $100k engineer and produces 5x the output, how is that not a 5x increase in aggregate labor productivity?

I think they are saying that with 99k pure compute you are able replace 100k engineer with equal output. Or that is the goal of the AI companies. It is worse for them if you get more productivity.

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It's so interesting that sometimes people throw these wild numbers around like 10x productivity, 100x greatness, etc. but when the rubber hits the road, we see so much ambiguity, unknowns and unrealistic assumptions.

But the AI companies have no access or knowledge of how much value you produce, they would have to calibrate against some average SWE salary and some average productivity which is task-dependent. There is no way for them to control this. Even if they did, they would lose out to other companies who do not do this and let you "keep" surplus value, it feels like this again assumes a no-competition market.

I guess it just seems obvious to me that most of the major players want a no-competition market, and are working towards making that happen, and are having notable success with their efforts (the whole “pacing the frontier” was a remarkably public display of coordination between purported competitors, the government has already banned deepseek, etc).

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