Technology
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I don't feel like the companies are concerned about it costing more right now as much as they are betting that it will be cheaper in the long run. The cost of labor isn't unlikely to decrease drastically while the technology is likely to become cheaper.
While I would love to believe Microsoft is being burned by spending on AI, I think they don't mind spending more now so long as they can trade the cost labor for the costs of technology and maintain similar productivity.
Feels like they hope this will be to white collar jobs what Uber was for taxi drivers. Current profitability isn't really the goal as much as being able to reproduce similar outputs.
It’s a bad bet. AI is unprofitable now because they are building the datacenters.‘do you think one day those are going to be done and just never touched again? No, they’re going to constantly upgraded. They’re an ongoing and forever cost for upkeep, a fraction of- but a significant one - of their initial cost.
The AI companies, however, are never going to lower prices. They’re going to raise them until some of the market gets uncomfortable paying them. Then, they’re going to hold them there.
Will it be cheaper in the long run? No. Not really.
But it was never about replacing workers anyways. It was about fooling enough C-levels and middle managers and even “normies” that Super Amazing Smart Bot can do your job while YOU live in comfort! Incredible! Hey kids, tried of thinking? Let the agents do it FOR you!
And once enough were on board, and the “demand” was so great; oopsie they bought up all the compute on planet earth. All information flows through them now. Every company, every home, every document, every email, every PowerPoint presentation, every lewd text. Indexed, summarized, graphed, reported in real-time.
We just lost personal computing, and it’s literally capitalism’s design goal.
I think AI will be profitable for the next generation of AI business models that emerge from the abandonment of the current business model of developing the frontier. But the prerequisite is that the companies give up on developing the frontier and decide that the models they have are good enough, then get hardware optimized for inference on those models, stagnating into long term commodity infrastructure, like providing phone service or electricity for profit.
So yeah, I think many of these technologies are here to stay, but the growth will stagnate this year as data center construction swallows up companies that overextended.