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Comment by solenoid0937 | Hacker News Reader

Anthropic is absolutely taken seriously in workplaces, what are you even talking about?

No serious business uses Pro or Max, they are all on Anthropic API billing.

In fact with this move it is plainly obvious that Anthropic is moving compute from prosumers towards enterprise.

I know of a very serious business that deployed Max to all of their developers. API pricing, from what I see, can become more expensive than just hiring another dev.

Well yes it is expensive, but companies are paying for that. It is far more expensive than the Max and it does go up to or more in some cases compared to the employee salary.

Larger companies are using Claude through AWS Bedrock and are willing to easily pay $5k+ per engineer per month for it.

The thinking appears to be that a model that can do the work of a developer must be worth a significant share of a developer salary. I think this idea is flawed.

Developer salaries are driven up by scarcity - scarcity of developer skills overall and scarcity of developer skills in specific places like California. If AI models destroy the scarcity then the price worth paying for a coding agent will drop dramatically.

Maybe Anthropic can get away with it for a couple of months. But this will not last.

But if e.g. a developer can do 50% more, shouldn't it be worth it to pay up to 50% of developer salary for the product?

So the % is debatable of course. There's cases where an AI agent can save weeks worth of investigation, there's cases where you are mainly blocked due to processes, and many different circumstances. It's up to every company on their own to decide it. But if they decide it's 50%, why shouldn't they spend 50% of salary on it?

Like imagine a large company with thousands of microservices. You need to build a feature, before you had to setup cross timezone team meetings to figure out who owns what, what is happening in each microservice, how it all connects together. But now you can essentially send an AI Agent to scour and prepare all this material for you, which theoretically in this planning could save hours of back and forth meetings.

If 1 hour / 1 eng costs $200, then a 10 people 1h meeting avoided would save $200 x 10 = $2000 alone.

I don't see it as a replacement for dev, it's more of a multiplier.

I believe what GP is saying is that there is a price calculation today, but then if enough devs become unemployed, their salary will go down, making them more competitive by finops calculations, at which point the Ai prices will have to come down as well. Where equilibrium is, no one knows

I think it's an interest hypothesis but I don't think it works out like that. AI prices aren't priced in relation to the work they do, they're priced in relation to tokens (input/output). As long as it's cheaper to use those tokens than it is to pay a dev, then dev salaries will likely fall. Whenever it becomes cheaper to hire a dev than to use AI, a company will likely just hire a dev. But AI prices won't fall just because dev salaries have.

Yeah, I mean I think there's just too much work and I think devs who are effective with AI won't become unemployed, but their productivity will be multiplied. More will be expected of companies in terms of output, so it will be just more output.

>But if e.g. a developer can do 50% more, shouldn't it be worth it to pay up to 50% of developer salary for the product?

That's the upper bound but it's not the market price.

Accounting software (+ hardware) doesn't cost nearly as much as the accountant hours it saves. Accountant salaries are simply not a relevant yardstick for the price that software vendors can charge for accounting software.

Equally, the market price for code generators will not stay anywhere near the price of developer hours it saves. It will be determined by competition.

Because accounting software is cheaper due to competition. In software eng Claude is currently strongest and there's higher costs involved than normal SaaS. There are many fields in which the tools/machinery cost more than the salaries of people.

>Because accounting software is cheaper due to competition. In software eng Claude is currently strongest and there's higher costs involved than normal SaaS.

Yes, competition not salaries determines the margins that software vendors can charge. That's exactly what I'm saying.

My expectation is that competition between coding agents will stay strong and costs for the current level of software engineering performance will fall.

>There are many fields in which the tools/machinery cost more than the salaries of people.

For example?

Agriculture, oil drilling, trucking, etc...

The machines in those sectors do not cost nearly as much as doing the same work manually. Not even close.

Of course not, but they cost more than the person using them, it's multiplying the productivity of that person, so if AI multiplied enough as well it would make sense.

That's beside the point.

The question was whether the salaries that would have been paid for the working hours replaced by the machine are a realistic yardstick for the market price of the machine.

That's clearly not the case in any industry.

In my calculation a good opus developer can do 10x more, not just 50%.

Got all my tickets from the last two years fixed on a few days. And implemented all the ideas which came to my head.

We're also not seeing much difference in real throughput at an agency. Everyone is getting decent results, output wise but it just doesn't seem to change the outcomes that much. There is also a mixed incentive at an agency, because a reduction in hours spent is a reduction in revenue.

It will be interesting to see how it all plays out, but I suspect if cost continues to increase and output only improves incrementally from here, that the cost will be the final decider rather than the competence.

I could see it being a thing we use only sometimes, for some things, but ultimately remain reliant on developers to get the work through the pipeline.

API usage is on-demand, employees are a constant cost, guess what management loves most.

That's true but employees offer more than code output, and you still need people operating the "machine" at this stage.

I am interested in how corporate politics evolves in this new environment. Usually all the way up the chain, managers and directors use head count as a measure of power and influence (and compensation). Who's going to pay a director top level pay when all they're doing is funneling requirements to various agents? That seems like a technical role that isn't particularly aligned with the soft skills management excel with either.

Management seems disconnected from reality. Real employees accumulate tribal knowledge, have an almost infinite context, and don’t keep disabling unit tests because they don’t pass. They don’t really cost money if it’s information workers that build almost all of the modern service industry. It’s management that we should see as a cost center.

But the API is incredibly expensive. I calculated that I would have spent 3000 EUR the last month, a lot more than the 100 I pay now.

Nothing for large companies though.

I am pretty sure that a hole in the pocket in the order of 50 000 000 USD/month (assuming around 20 000 people using AI in not the smartest or most optimized way possible, therefore burning A LOT of tokens) will be noticeable by even the largest companies.

It is noticeable and even promoted, large companies do pay such sums for the API, like $5k+ per person per month. Not every eng is using AI that much already, but companies are clearly willing to pay those sums.

Per employee?

This not nothing.

My startup just rolled out MAX plans for our engineers. we literally jumped into AI last week. Been in operation for 6 years and are profitable.

I work for a "very serious" company with many billions of dollars of revenue. All our SWEs have max subscriptions.

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