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We will continue to be told this is because AI is driving efficiency instead of that it's driving CapEx and investors won't tolerate FCF collapsing.
by onlyrealcuzzo 8mo ago
We will continue to be told this is because AI is driving efficiency instead of that it's driving CapEx and investors won't tolerate FCF collapsing.
- Ancalagon 8mo agoEveryone is holding their breath praying AGI either will, or will not, come before the chickens come home to roost.
- dboreham 8mo agoNot sure that makes sense. As amazing a technical feat as AGI will be, does it follow that s.tons of money will immediately be made? That's not really how humans act, historically. Any migration to new technology takes years, decades. There are still steam engines pulling revenue service trains.
- Ancalagon 8mo agoYes - if AGI is made, nearly immediately every knowledge worker’s labor value goes to zero over night. This may or may not include AI researchers.
- fileeditview 8mo agoYou are assuming that the AGI service is very cheap..
- bluefirebrand 8mo agoAnd probably not much longer after that, the bloodshed
- Ancalagon 8mo agoUnless the benefits of AI get communalized (UBI, or some other form of sharing), ya.
- joquarky 7mo agoHow would that work? Taxes are already full of perverse incentives. Certainly anything resembling UBI will be just as bad.
- Ancalagon 7mo agoYou’re not wrong - I was just giving that as an example but not saying it’s the right thing to do.
- bluefirebrand 7mo agoI don't think there is any compelling reason to believe this will actually happen
- delusional 8mo agoThat seems like a wrong economic theory to me. The economy is based on differential of value. I can make furniture, so it's worth less to me than it is to you. Therefore we can trade. That's what supply/demand is. If AGI somehow exists, then the value of intelligence drops to zero for both of us, there's nothing to trade. AGI would not make knowledge work valueless, it would move all the knowledge work value to the AGI companies.
- hackable_sand 8mo agoCan you guys just say the quiet part out loud? That you want slaves. You want slaves. This is what you are asking for. Unless you're paying the AGI? Then why not just... pay a human that is already present? Much more efficient.
- Ancalagon 8mo agoNot sure if you’re insinuating that I’m one of the capitalists? I’m not, that’s why I’m saying it out loud. I believe capitalism’s relationship with labor will need to fundamentally change if AGI and robotics takeover. I don’t know what that looks like but obviously the current capitalist overlords want everything to stay the same - just for them to have more power/money.
- energy123 8mo agoIt will drive capital into data centers, which is good for Oracle.
- rando77 8mo agoOr maybe it won't. If it can be made efficient like humans it might be at the edge mainly.
- hackable_sand 8mo agoWhat is this "everyone" running from?
- Ancalagon 8mo agoCollapse of return on investment
- alephnerd 8mo agoIn Oracle's case this is part of their larger Oracle Cloud strategy - once you remove the scooby doo monster mask you end up finding much of Oracle's AI spend was connected with their larger bet on Oracle Cloud and becoming a tier 1 hyperscaler. This is why they landed one of the mega cybersecurity companies (the one who's name starts with C) as well as a globally distributed ridesharing businesses with sweetheart terms. Oracle Cloud already represents 50% of Oracle's total revenue, and the AI story helps them justify that capex needed to fund their pivot into becoming a hyperscaler.
- bdangubic 8mo agodon’t forget that they will probably hire thousands off-shore
- onlyrealcuzzo 8mo agoMaybe - but the larger issue is FCF - and you can't hire that many without it showing up on FCF.
- bdangubic 8mo agowhy would they try to hide it? no other company does :)
- onlyrealcuzzo 8mo agoYou must not understand what FCF is. If you're cutting headcount STRICTLY to juice FCF, you cannot spend money offshore without hitting FCF.
- bdangubic 7mo agoyou can if you are paying pennies on the dollar :)
- hshdhdhj4444 8mo agoI strongly believe AI will drive efficiency. I’m less certain about whether that’s already happening or will happen in the future and when in the future. However, I’ve already seen a CTO of a F100 company explicitly state that whether AI is driving efficiency or not, the capital investment, and more importantly, the promises of efficiency to investors will mean some people will be let go. Efficiency is output/input. The input is easy to measure. It’s cost and in this particular case salaries. Output is a lot harder to measure, which means it can be fudged easily. So you cut the easily measurable inputs and inflate the easily manipulable output. One could imagine the reverse would also be possible, where you maintain inputs but inflate the output, but there is an asymmetry where investors will reward you for cutting costs even if there are no efficiency advantages that makes cutting inputs more sellable than inflating outputs.
- boringg 8mo agoI think we wont know until the true costs for ai are revealed. Right now were still in the vc growth above all things part of the cost curve. It will get worse quality as revenue demands increase (as all products suffer). It will be another dependency for all companies to bear. Hopefully significant gains for humanity, tbd
- pipo234 8mo ago> Output is a lot harder to measure, which means it can be fudged easily. First and foremost, this is about Oracle. For the short period I worked there, my impression about culture and tech was: mediocre. Not excellent, not poor but just a around average. Which raises the question: why is it such a successful company commercially? I believe it's being ruthless to customers, employees and suppliers combined with cooking the financials. Which bring me to your remark about output being difficult to measure. Imho Oracle had been exceptionally good at manipulating and obfuscating their output. And this was true long before AI came to the scene.
- oxag3n 8mo ago> Which raises the question: why is it such a successful company commercially? Tons of mediocre enterprise software is built on Oracle DB. Why enterprises are vendor locked-in? There are very few large enterprise players in every industry that implement all kind of ISO, standards, got an army of business analysts to generate million of requirement pages. Any new player must fight against that artificially overblown legacy systems, design and prove migration process is possible etc. Here are just a bunch of industries my family/friends worked in and had first hand experience with these legacy systems - Airline (PSS), Banking, Healthcare, Hotel, Telecom.
- jollyllama 7mo agoExcept we're not, in this case. Oracle is not hiding the fact that the cuts are due to rising costs and expenses, rather than actualized efficiency gains. This is in contrast to everyone else, ex. Dorsey's block, who are putting a brave face on cuts, saying it's simply due to efficiency gains from AI. The question is: why are their statements being taken at face value?