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I think it’s clear that these tools are going to get more expensive. What is not clear to me is that they’ll get expensive enough to not be worth it for a comp

I think it’s clear that these tools are going to get more expensive. What is not clear to me is that they’ll get expensive enough to not be worth it for a company. A good engineer costs a lot of money and comes with limitations derived from being human. Let’s say AI manages to be a 2x multiplier in productivity. Prices for that multiplier can rise a lot before they reach 120k/year for 40 hours a week, the point at which you’re better off hiring someone.

beefnugs 1y ago
Too bad companies love to smash that authoritarian hammer down as quick as possible, and try to dictate everything based on baseless bullshit from other ceos at the country club. Instead of just making sure their employees have access to the tools and generously encourage them to explore their usefulness
ethbr1 1y ago
There are 3 functional futures for AI coding assistants, depending on what they provide, and all of which support order of magnitude different pricing: 1. Vibe coder's wet dream = generates working technical product direct from product owner requirements = can be priced up to 99% of senior developer compensation (incl benefits / taxes) 2. Productivity multiplier = fills in gaps, but requires technical architecture and planning knowledge = can be priced up to 99% of junior developer compensation (incl benefits / taxes) 3. Macro on steroids = ignorantly expands code or performs basic tasks, but screws things up frequently enough, both obviously and subtly, to still benefit from even a junior dev driving it = can be priced up to 99% of team size reduction Technically, even if we're only in #3 (and I think there's a strong case to be made that we're there), these solutions are drastically underpriced according to human labor decreasing (e.g. axing the equivalent FTE hours it would have taken to write test coverage). * And don't forget the number they're replacing from the company perspective isn't {salary} but {salary+benefits+taxes}, which can be substantially greater
- torben-friis 1y ago
  Exactly. Pretty much our only hope is that these tools get cheap enough to provide that competition drives the price down - ideally a locally run open source solution that gets you a significant part of the way there. And don’t forget that in your case one, they can pull the supermarket trick - keep prices low until the industry is destroyed, then price back up to a higher point than the crushed competition used to demand.
  - ethbr1 1y ago
    I doubt repricing after market capture is going to work in this case. There's too much total addressable market at stake, and the end product (running code) is fungible. The only scenario where that happened was if one company (e.g. OpenAI) was multiple generations ahead and incredibly profitable. That's not the reality we live in: even if the other models all froze themselves they'd be close enough to serve as a springboard for a competitor, and OpenAI isn't even profitable.
- zaphirplane 1y ago
  I don’t agree with the numbers but who cares in five years they will all be true
sshine 1y ago
> I think it’s clear that these tools are going to get more expensive. There are several meaningful interpretations of this: - The current models get cheaper to run at a fast pace - The next models outcompete the current models and retain cost - The VC-funded subscription we're accustomed to don't reflect actual cost - As we get more accustomed to AI, our usage may increase, increasing costs
surgical_fire 1y ago
> Let’s say AI manages to be a 2x multiplier That's extremely optimistic.

beefnugs 1y ago

Too bad companies love to smash that authoritarian hammer down as quick as possible, and try to dictate everything based on baseless bullshit from other ceos at the country club. Instead of just making sure their employees have access to the tools and generously encourage them to explore their usefulness

ethbr1 1y ago

There are 3 functional futures for AI coding assistants, depending on what they provide, and all of which support order of magnitude different pricing: 1. Vibe coder's wet dream = generates working technical product direct from product owner requirements = can be priced up to 99% of senior developer compensation (incl benefits / taxes) 2. Productivity multiplier = fills in gaps, but requires technical architecture and planning knowledge = can be priced up to 99% of junior developer compensation (incl benefits / taxes) 3. Macro on steroids = ignorantly expands code or performs basic tasks, but screws things up frequently enough, both obviously and subtly, to still benefit from even a junior dev driving it = can be priced up to 99% of team size reduction Technically, even if we're only in #3 (and I think there's a strong case to be made that we're there), these solutions are drastically underpriced according to human labor decreasing (e.g. axing the equivalent FTE hours it would have taken to write test coverage). * And don't forget the number they're replacing from the company perspective isn't {salary} but {salary+benefits+taxes}, which can be substantially greater

torben-friis 1y ago
Exactly. Pretty much our only hope is that these tools get cheap enough to provide that competition drives the price down - ideally a locally run open source solution that gets you a significant part of the way there. And don’t forget that in your case one, they can pull the supermarket trick - keep prices low until the industry is destroyed, then price back up to a higher point than the crushed competition used to demand.
- ethbr1 1y ago
  I doubt repricing after market capture is going to work in this case. There's too much total addressable market at stake, and the end product (running code) is fungible. The only scenario where that happened was if one company (e.g. OpenAI) was multiple generations ahead and incredibly profitable. That's not the reality we live in: even if the other models all froze themselves they'd be close enough to serve as a springboard for a competitor, and OpenAI isn't even profitable.
zaphirplane 1y ago
I don’t agree with the numbers but who cares in five years they will all be true

sshine 1y ago

> I think it’s clear that these tools are going to get more expensive. There are several meaningful interpretations of this: - The current models get cheaper to run at a fast pace - The next models outcompete the current models and retain cost - The VC-funded subscription we're accustomed to don't reflect actual cost - As we get more accustomed to AI, our usage may increase, increasing costs

surgical_fire 1y ago

> Let’s say AI manages to be a 2x multiplier That's extremely optimistic.