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I think this is a great question and one I keep mulling over. I've been evaluating paid AI products like Co-pilot to try to determine if there is enough general
by lucisferre 2y ago
I think this is a great question and one I keep mulling over. I've been evaluating paid AI products like Co-pilot to try to determine if there is enough general purpose value there to justify it's cost.
At $360 a year, the productivity benefit doesn't need to be huge to justify the cost, lets say you would probably want to so $500-1,000/yr in expense reduction.
I can say for certain that I have found roughly enough benefit myself in the past year for various tasks such as writing, presentations and the like. Nothing earth shattering mind you, but time has been saved. The question is, does this scale across an organization? Does everyone get leverage out of Copilot if you give it to them, or do only a fraction of advanced early-adopters? Also does the benefit really hit your bottom line, which may be harder to measure accurately.
Personally, I think it is a toss-up right now, but I suspect many businesses will place their bet anyway. For a 1,000 person organization $360k isn't nothing but also not their biggest expense or even software expense. Likely a rounding error on revenue.
Most businesses will roll out Copilot and/or similar tools broadly for at least a couple of years before starting to really question the ROI. It is pretty clear that the hype and FOMO on this is real. It would likely be better to be the executive who tried AI and found it wanting then to be the one that waited on the sidelines if it turns out to have a big impact.
The hype cycle is just getting warmed up on this.
- gizajob 2y agoThanks for your answer. It’s useful to think about for sure. I’m just trying to ponder where we are at with it, and whether Nvidia is becoming overblown or whether we’ll need another quantum leap on the software side to get better AI or whether the current generation and approaches are going to keep giving bigger and bigger returns. As you point out, AI really is improving tooling, particularly in coding, and this is worth paying for.
- sifar 2y ago>> At $360 a year, the productivity benefit doesn't need to be huge to justify the cost, lets say you would probably want to so $500-1,000/yr in expense reduction. You also have to factor in the cost of ai's failure modes. Though it might be difficult to put a number on it.
- zeroonetwothree 2y agoYes so it would be more correct to say “net productivity gain”. At which point it’s not as obvious is it?