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Comment by etiennebausson | Hacker News Reader

> The unbearable cheapness of open weight models

So the closed model try to get client with their model by saying it's cheaper than employees, and then turn around to lawyer-out cheaper alternative?

Truly the american dream.

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The important thing is that Sam Altman and Dario Amodei become trillionaires. Everything must be decided in service of that one primary goal.

And the verdict is still out on if it's going to be cheaper than employees in the long run. Maybe for companies in HCoL areas (SV/NYC), but any smaller mid-market org in a LCoL area, frontier model token spend may not end up all that cheaper when your employee salaries are $55k-$75k/year so you're mostly evaluating it as an additional force multiplier expense rather than a headcount replacer.

Those salaries seem low for mid sized cities even no?

I think they're generalizing beyond software engineers with what they're saying. G&A, Marketing, etc roles pay significantly less than software engineers and that $55-75k figure is realistic in lower cost of living areas. Even in Colorado, which the Denver Metro Area is HCOL, there are companies (smaller, regional, not national/global) still offering that level of salary.

Yeah that would make more sense. Though it seems to me AI is currently better at reducing dev headcount than most other roles.

Yeah, correct, I wasn't thinking of devs specifically, more other office/administrative roles threatened by automation. Even where I live in a relatively HCOL area, any non-dev office role you can still expect to see a$65-$80k salary range, and $80k is pushing toward the top end for non tech roles.

Depending on industry and public versus private here, that $80k+ barrier for non-tech is mostly management positions.

Nope, not low at all. In the Midwest that’s exceedingly normal, even for non-entry level. $70k a year is living good in the Midwest, especially if dual income household ($140k a year is plenty when a decent house goes for $300k).

Fair enough, 55k would’ve seemed pretty low to me in the NE for a fresh dev. Not 75k though.

55k is low for a dev, but not for a ton of other office/administrative roles that are threatened by AI automation.

This is extremely regional dependent. Please don’t think 70K is living large across the majority of the Midwest, it is not.

It might not be living large, but it's a very comfortable income for a single person in pretty much the whole region.

55k??

That is a completely normal programmer salary in many countries, Silicon valley wages are just nuts. For example in Finland 55k before taxes is pretty good for ordinary non-wizard guy who can code, if you are a junior 40k is more realistic (and finding job in the first place can be a huge chaĺlenge..).

It's also a completely normal salary for non-dev, non-IT roles in most of the US that aren't major HCoL cities, which are the roles I was referring too mostly where the cost tradeoff of AI vs. Hiring humans isn't as clear cut as the labs marketing departments want everyone to believe.

Even in the US, only about 23% of workers earn $100k/year or more.

According to the US BLS, the median income for "knowledge workers" is ~$65k-$72k/year.

People in SF, NYC, etc. live completely different lives from the rest of the country.

We are talking about the U.S. here, and no, 40k or 55k are not good salaries at all. It may be OK in Europe with the lower cost of living, etc., but the price of a new car is 50k in 2026, and a basic fast food meal pretty much anywhere is well north of $10.

And yet ~64+% of the US makes less than $74k/year. The median, once you filter out part-time and seasonal workers is ~$65k/year.

You're right, they are not good salaries but they are the reality of wages in the US outside of the SF/NYC bubble.

Very, very true a large portion of the population in the Us is definitely hurting, and the proliferation of those luxury apartments across the country are not helping the housing market.

For hosted models, there's no way to know what the real costs are. But we know what it costs to run the open models, and moore's law tells us that it's going to get cheaper, at least for the same capabilities they have today.

The fully loaded cost of employees at that salary level is likely over $100K. You may still be right on the relative expenses, but you can't just look at the top-level salary line.

There are a lot of unknowns. It will probably be harder to get an acceptable quality outcome in most fields than in the text-based, limited vocabulary, comparatively highly structured, granularly documented, relatively unambiguous world of code. For the ones where it’s even possible with our current approach, the economics might not even be feasible to provide the service. Based on how much money these companies need to start making to keep the infrastructure running, let alone expanding, we just don’t know what the landscape will even look like in a couple years.

??? These are not unknowns. It is pretty well documented how much more an employee costs over their outright comp

You seemingly misunderstood what I deemed unknown. It definitely wasn’t that.

Also most people building these things are engineers and coders, what they know best is code. So naturally this aspect develops at an elevated speed. Getting non-tech experts to build a cutting edge tech product does not sound intuitively feasible.

Maybe to some extent, but with the way LLMs work, code generation is about as ideal of a use case as you get. Especially given the available training data.

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