…What am I even reading? Am I crazy to think this is a crazy thing to say, or it’s actually crazy?
…What am I even reading? Am I crazy to think this is a crazy thing to say, or it’s actually crazy?
This is not an outrageous amount of money, if the productivity is there. More likely the AI would work like two $90k junior engineers, but without a need to pay for a vacation, office space, social security, etc. If the productivity ends up higher than this, it's pure profit; I suppose this is their bet.
The human engineer would be like a tech lead guiding a tea of juniors, only designing plans and checking results above the level of code proper, but for exceptional cases, like when a human engineer would look at the assembly code a compiler has produced.
This does sound exaggeratedly optimistic now, but does not sound crazy.
aws and gcp's margins are legendarily poor
oh, wait
Big part of why clouds are expensive is not necessary hardware, but all software infra and complexity of all services.
You just reduced the supply of engineers from millions to just three. If you think it was expensive before ...
Google, OpenAI, Anthropic, Meta, Amazon, Reka AI, Alibaba (Qwen), 01 AI, Cohere, DeepSeek, Nvidia, Mistral, NexusFlow, Z.ai (GLM), xAI, Ai2, Princeton, Tencent, MiniMax, Moonshot (Kimi) and I've certainly missed some.
All of those organizations have trained what I'd class as a GPT-4+ level model.
Google, OpenAI, Anthropic, Meta, Amazon, Alibaba (Qwen), Nvidia, Mistral, xAI - and likely more of the Chinese labs but I don't know much about their size.
So, we have multiple providers, but for how long? They're all competing for the same hardware and the same energy, and it will naturally converge into an oligopoly. So, if competition doesn't set the floor, what does?
Local models? If you're not running the best model as fast as you can, then you'll be outpaced by someone that does.
If they start showing much higher returns on assets, then one of the many infra providers just builds a data center, fills it with GPUs, and rents it out at 5% lower price. This is the market mechanism.
Looking at who owns the compute is barking up the wrong tree, because it has little moat. Maybe GPU manufacturers would be a better place to look, but then the argument is that you're beholden to NVIDIA's pricing to the hyperscalers. There's some truth to that, but you already see that market position eroding because of TPUs and belatedly AMD. All of these giant companies are looking to degrade Jensen's moat, and they're starting to succeed.
Is the argument here that somehow all the hyperscalers are going to merge to one and there will be only one supplier of compute? How do you defend the idea that nobody else could get compute?
This is in the context of the article, that paints a world where it would be unreasonable not to spend $250k per head per year in tokens.
My argument is the current situation is temporary, and _if_ LLMs provide that much value, then the market will consolidate into a handful of providers, that'll be mostly free to dictate their prices.
> If they start showing much higher returns on assets, then one of the many infra providers just builds a data center, fills it with GPUs, and rents it out at 5% lower price. This is the market mechanism.
Except when the GPUs, memory, and power are in short supply. The demand is higher than the supply, prices go up, and whoever has the deeper pockets, usually the bigger and more established party, wins.
Sure, opus and codex are significantly better. But price wise they cannot deviate too much from open models.
Especially if the open models are grounded against the digital twin.
This is not a lot competition though. And you need to assume, that like other industries, mergers and acquisitions will happen over time which will put you in an increasingly worse position.
It does if it means someone using a better model can outpace you. Not spending as much as you can means you don't have a business anymore.
It's all meaningless, ultimately. You're not building anything for anyone if no one has a job.
The best bull case for us reaching luxury gay space communism is that people not working and having near infinite capital to buy whatever they want to enjoy is the only way the billionaires get to see their pot growing forever.
We can imagine it all we want, and a free pony too. What we'll get is most of humanity not needed, and living in the edges of society, plus some 10-20 percent still "useful".
>The best bull case for us reaching luxury gay space communism is that people not working and having near infinite capital to buy whatever they want to enjoy is the only way the billionaires get to see their pot growing forever.
Billionaires are about power. The money was just a means for that, if they can get it in another way, they will use that. People "not working and having near infinite capital to buy whatever they want to enjoy" is the last thing they'll want.
You can negotiate with your human engineers for comp, you may not be able to negotaiate with as much power against Anthropic etc (or stop them if they start to change their services for the worse).
I hear things like this all the time, but outside of a few major centers it's just not the norm. And no companies are spending anything like $1k / month on remote work environments.
https://www.bls.gov/ooh/computer-and-information-technology/...
I recognize that not everyone makes big tech money, but that's somewhere between entry and mid level at anywhere that can conceivably be called big tech
You need to vacate your bubble pronto.
Like you mention, big tech gravitates to a handful of tech hubs across the US, which drives up salaries for every company in the area. Which is more data suggesting something is wrong with BLS' numbers.
My expectation (based on anecdotal/personal data - if you have better data I'd love to see it) is that the median developer in a tech hub makes more than an entry level big tech kid. So unless there's either an error, omission, or unexpected inclusion in the BLS data, the data implies that nearly all of big tech, plus ~50% of developers in tech hubs, accounts for about 10% of the workforce.
That doesn't make sense. What does seem plausible is that this data doesn't account for bonuses, options, RSUs, and the like, which would put big tech entry level jobs right around the median for developers. I'm not certain if that's the case, but it at least passes the sniff test.
What dystopia is this?
> We built a Software Factory: non-interactive development where specs + scenarios drive agents that write code, run harnesses, and converge without human review.
[Edit] I don't know why I'm being downvoted for quoting the linked article. I didn't say it was a good idea.
The seem to be plenty of people willing to pay the AI do that junior engineer level work, so wouldn’t it make sense to defect and just wait until it has gained enough experience to do the senior engineer work?
This looks like AI companies marketing that is something in line 1+1 or buy 3 for 2.
Money you don’t spend on tokens are the only saved money, period.
With employees you have to pay them anyway you can’t just say „these requirements make no sense, park for two days until I get them right”.
You would have to be damn sure of that you are doing the right thing to burn $1k a day on tokens.
With humans I can see many reasons why would you pay anyway and it is on you that you should provide sensible requirements to be built and make use of employees time.
We got feedback in this thread from someone who supposedly knows rust about common anti patterns and someone from the company came back with 'yeah that's a problem, we'll have agents fix it.'[0].
Agents are obviously still too stupid to have the meta cognition needed for deciding when to refactor, even at $1,000 per day per person. So we still need the buts in seats. So we're back at the idea of centaurs. Then you have to make the case that paying an AI more than a programmer is worth it.[1]
[0] which has been my exact experience with multi-agent code bases I've burned money on.
[1] which in my experience isn't when you know how to edit text and send API requests from your text editor.
I am one of the most pro vibe-coding^H^H^H^H engineering people I know, and i am like "one claude code max $200/mo and one codex $200/mo will keep you super stressed out to keep them busy" (at least before the new generation of models I would hit limits on one but never both - my human inefficiency in tech-leading these AIs was the limit)
Also the eat tokens may be compared to single-tasking - when agent swarms move faster, I need to come back to that task sooner, slowing down the multi-tasking that allowed me to use a full 20x max subscription... so the overall usage once that is taken into account is smaller.
It basically stumbles around generating tokens within the bounds (usually) of your prompt, and rarely stops to think. Goal is token generation, baby. Not careful evaluation. I have to keep forcing it to stop creating magic inline strings and rather use constants or config, even though those instructions are all over my Claude.md and I’m using the top model. It loves to take shortcuts that save GPU but cost me time and money to wrestle back to rational. “These issues weren’t created by me in this chat right now so I’ll ignore them and ship it.” No, fix all the bugs. That’s the job.
Still, I love it. I can hand code the bits I want to, let it fly with the bits I don’t. I can try something new in a separate CLI tab while others are spinning. Cost to experiment drops massively.
I could just be lucky that I work in a field with a thorough specification and numerous reference implementations.
I see you don't have experience working with a large number of real life humans.
Suddenly, it starts to look precarious. That would be my concern anyway.
> $20/month Claude sub
> $20/month OpenAI sub
> When Claude Code runs out, switch to Codex
> When Codex runs out, go for a walk with the dogs or read a book
I'm not an accelerationist singularity neohuman. Oh well, I still get plenty done
I was working on a problem and having trouble understanding an old node splitting paper, and Gemini pointed me to a better paper with a more efficient algorithm, then explained how it worked, then generated test code. It's fantastic. I'm not saying it's better than the other LLMs, but having a little oracle available online is a great boost to learning and debugging.
My bosses bosses boss like to claim that we're successfully moving to the cloud because the cost is increasing year over year.
Also I think you have to consider development time.
If someone creates a SaaS product then it can be trivially cloned in a small timeframe. So the moat that normally exists becomes non existent. Therefore to stay ahead or to catch up it’s going to cost money.
In a way it’s similar to the way FAANG was buying up all the good engineers. It starves potential and lower capitalised but more nimble competitors of resources that it needs to compete with them.
The more nuanced "outrage" here, how taking humans out of the agent loop is, as I have commented elsewhere, quite flawed TBH and very bold to say the least. And while every VC is salivating, more attention should instead be given to all the AI Agent PMs, The Tech lead of AI, or whatever that title is on some of the following:
- What _workflow_ are you building? - What is your success with your team/new hires in having them use this? - What's your RoC for investment in the workflow? - How varied is this workflow? Is every company just building their own workflows or are there patterns emerging on agent orchestration that are useful.
Forget about agents or AI: the amount of money that it makes sense to spend on software engineering for a particular company is highly dependent on the specifics of that company.
Perhaps for them this number makes sense, but it's kind of crazy to extrapolate that to everyone as some kind of benchmark. It would be far more interesting to hear how they place a value on the code produced.
I have a harsher take down-thread, but the simulation testing (what they call DTU) is actually interesting and a useful insight into grounding agent behavior.
- Factory, unconvinced. Their marketing videos are just too cringe, and any company that tries to get my attentions with free tokens in my DMs reduce my respect for them. If you're that good, you don't need to convince me by giving me free stuff. Additionally, some posts on Twitter about it have this paid influencer smell. If you use claude code tho, you'll feel right at home with the [signature flicker](https://x.com/badlogicgames/status/1977103325192667323).
+ Factory, unconvinced. Their videos are a bit cringe, I do hear good things in my timeline about it tho, even if images aren't supported (yet) and they have the [signature flicker](https://x.com/badlogicgames/status/1977103325192667323).
https://github.com/steipete/steipete.me/commit/725a3cb372bc2...If it's not labelled it's in violation of FTC regulations, for both the companies and the individuals.
[ That said... I'm surprised at this example on LinkedIn that was linked to by the Washington Post - https://www.linkedin.com/posts/meganlieu_claudepartner-activ... - the only hint it's sponsored content is the #ClaudePartner hashtag at the end, is that enough? Oh wait! There's text under the profile that says "Brand partnership" which I missed, I guess that's the LinkedIn standard for this? Feels a bit weak to me! https://www.linkedin.com/help/linkedin/answer/a1627083 ]
It feels like it really started in earnest around october.
It can't do that today though. Linux uses C11 features and also many GCC extensions that tcc doesn't implement.
Designing reliable, stable, and correct systems is already a high level task. When you actually need to write the code for it, it's not a lot and you should write it with precision. When creating novel or differently complex systems, you should (or need to) be doing it yourself anyway.
And coding agents are making that disconnect painfully obvious
Getting rid of such naysayers is important for the industry.
Each engineer is very valuable. LLM tokens are cheap. You scale up inference compute, and your engineers can focus on higher order stuff, not reviewing incorrect responses, validating bugs, and what not.
It’s shocking to me that there isn’t a $2,000 / $20,000 per month subscription tier for coding assistants. I’ve always in my mind called this ExecGPT since around 2021, but the notion was that executives have teams that support them to be high functioning and high leverage, responsible for quality of thinking and decision making, not quantity of work output.
And the value/prop existed and continues to exist even as the models get smarter, even Opus 4.6.
What would be the benefit for the providers in offering this over just having those people use the API? I don't think it makes any sense for them.
Setting aside the absurdity of using dollars per day spent on tokens as the new lines of code per day, have they not heard of mocks or simulation testing? These are long proven techniques, but they appear bent on taking credit for some kind revolutionary discovery by recasting these standard techniques as a Digital Twin Universe.
One positive(?) thing I'll say is that this fits well with my experience of people who like to talk about software factories (or digital factories), but at least they're up front about the massive cost of this type of approach - whereas "digital factories" are typically cast as a miracle cure that will reduce costs dramatically somehow (once it's eventually done correctly, of course).
Hard pass.
The desperation to be an AI thought leader is reaching Instagram influencer levels of deranged attention seeking.