4 ms·

My takeaway here: 3.XT $ of US salaries are the TAM for AI companies. Apple, a very successful company, makes 300B/y revenue? (ish) ~10% is all you need to be

My takeaway here: 3.XT $ of US salaries are the TAM for AI companies. Apple, a very successful company, makes 300B/y revenue? (ish) ~10% is all you need to be Apple. And, it can work by taking all of 10% of the jobs and collecting the whole salary (the AI employee -- dubious proposition), or by taking 10% of everyone's salary and automating part of everyone's job (the AI "tool" -- much more plausible). If "part" being automated is >10%, we all win in the long run, every company gets productivity growth without cost growth, etc etc. If you add in data center costs, and multiple competing AI companies, and then expand the TAM to all white collar work worldwide, you can make everyone successful beyond their wildest dreams with a "20% of work for 20% of the cost" model. Again, how you distribute that 20% remains to be seen (20% new unemployment, or new 0% unemployment with "tools". I formalized my thoughts here: https://jodavaho.io/posts/ai-jobpocolypse.html https://jodavaho.io/posts/ai-jobpocolypse.html

jjtheblunt 7mo ago
"TAM" = ?
- ianm218 7mo ago
  Total addressable market
- deleted 7mo ago
  [deleted]
- istjohn 7mo ago
  Total addressable market
- ForHackernews 7mo ago
  Total addressable market. Frequently seen as a big fun number in pitch decks. "The TAM for our new Coca-Cola killer is $1.6T: all humans who imbibe liquids on a regular basis. You simply MUST invest."
  - Esophagus4 7mo ago
    Think it might’ve been zero to one which said you know a pitch is bad when you hear “if we can get just 1% of this massive market…”
- jjtheblunt 7mo ago
  ( thanks, all )
UncleMeat 7mo ago
The bosses already hate their workers and are mad that they have to pay them a cent. Would they really accept paying another 10% on their wages to make their workers 10% more productive? When there is significant active competition between the providers of core models and huge pressure to reduce prices?
- vannevar 7mo ago
  In the US, since the 1970s virtually all technologically-driven productivity gains have been captured by the top 10% (who own 90% of all public equity). (See, e.g., https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/ .) So no, little or none of the AI productivity gains will go to workers, barring significant changes in public policy like universal basic income and the massive tax increases necessary to implement it.
  - jvanderbot 7mo ago
    What productivity gains should go to the workers? I'm happy to collect my current salary + the usual raises to date, in exchange for transitioning my job to increasing amounts of AI use if required. If I lived like people in the 1970s I could have retired after 10-20 years in the industry, easily. Sooner if I prioritized money. My standard of living has grown immensely to the current level which I'm happy to maintain. I formerly shared a 3 bedroom leaky house with 5 dudes by the train tracks. Do the productivity gains from stack overflow "belong" to the workers? Do the productivity gains from better google search or wikipedia? If I want to charge by the product instead of hour - I can leave and start consulting or contracting. How should those productivity gains go to employees? I own equity in this company, and most others I have formerly worked for. I have free access to public equity markets, tax subsidized 401k and IRA plans which have historically enriched 100s of millions. I've been through layoffs where I didn't have to take a day of reduced salary or unemployment because of severances nor did I experience a single day of health care coverage lapse b/c of same, or b/c of spouse's insurance or public marketplace. My situation is not unique to software engineers in the USA. The public market, cheap/subsidized retirement plans + equity bonuses have effectively seized a good portion of the means of production for the workers, allowing consistent enrichment from expansion of industry. And corporate america for all it's evils has produced the entirety of the social safety net that I've used after I graduated, and that is while changing jobs basically whenever I wanted (plus one time I didn't) Guys, I don't see it yet. Maybe I'm dumb, but it's not here yet and there is a case to be optimistic that everyone is ignoring. Prepare for the worst, but once prepared, banish it from your mind.
ForHackernews 7mo ago
Your math is missing the fact that Apple products are differentiated from their competitors. If AI becomes a ubiquitous commodity, it's not worth 300B/y. Potable water is far more important than AI or iPads ever will be, but the world's most valuable water company only does about 5B/year in revenue: https://en.wikipedia.org/wiki/American_Water_Works https://en.wikipedia.org/wiki/American_Water_Works
- jvanderbot 7mo ago
  The point is that the market is big, and capturing a small part of it would make these companies wildly successful; and there's no need to make unemployment inevitable - I think this diminishes the AI Doom story quite a bit.
  - ForHackernews 7mo ago
    It absolutely diminishes the AI Doom story, but it also diminishes the AI Will Be The Golden Goose story, they are two sides of the same coin. The AI companies can only capture that surplus if there are not competitive substitutes available. In the same way that Amazon gets rich taking ElasticSearch for free and charging for hosting, Amazon will take free models and charge to host them. The companies building frontier models have massive R&D costs and no moat.
    - jvanderbot 7mo ago
      I'd say 20% productivity growth with no increased salaries is a golden goose. This comes from offloading 20% to AI as discussed, and still working same hours. It ignores transaction costs, incomplete rollout, but is a ceiling for long term growth in AI-friendly sectors.
      - ForHackernews 7mo ago
        I feel like we're talking past each other: a magic 20% productivity boost (or 100%, or 500%) for your company is worth nothing if your competitors all get the same magic dust.
w10-1 7mo ago
The replace-work TAM is overstated because it fails to address transaction costs, which are astronomical when refactoring work and dislodging stakeholders with sunk costs. Coding is now the leading app for AI now because it had already been factored to support division of labor, outsourcing, and remote work. It's also understated, because the real value of AI is not in replacing work, but making new products possible either because it's finally cheap enough to make them, or because -- AI.
dzonga 7mo ago
very apt analogy - same as your other one LLMs are similar to CNC machines. Given the state of AI (LLMs) - they still need a very human (skilled driver) to operate

jjtheblunt 7mo ago

"TAM" = ?

ianm218 7mo ago
Total addressable market
deleted 7mo ago
[deleted]
istjohn 7mo ago
Total addressable market
ForHackernews 7mo ago
Total addressable market. Frequently seen as a big fun number in pitch decks. "The TAM for our new Coca-Cola killer is $1.6T: all humans who imbibe liquids on a regular basis. You simply MUST invest."
- Esophagus4 7mo ago
  Think it might’ve been zero to one which said you know a pitch is bad when you hear “if we can get just 1% of this massive market…”
jjtheblunt 7mo ago
( thanks, all )

UncleMeat 7mo ago

The bosses already hate their workers and are mad that they have to pay them a cent. Would they really accept paying another 10% on their wages to make their workers 10% more productive? When there is significant active competition between the providers of core models and huge pressure to reduce prices?

vannevar 7mo ago
In the US, since the 1970s virtually all technologically-driven productivity gains have been captured by the top 10% (who own 90% of all public equity). (See, e.g., https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/ .) So no, little or none of the AI productivity gains will go to workers, barring significant changes in public policy like universal basic income and the massive tax increases necessary to implement it.
- jvanderbot 7mo ago
  What productivity gains should go to the workers? I'm happy to collect my current salary + the usual raises to date, in exchange for transitioning my job to increasing amounts of AI use if required. If I lived like people in the 1970s I could have retired after 10-20 years in the industry, easily. Sooner if I prioritized money. My standard of living has grown immensely to the current level which I'm happy to maintain. I formerly shared a 3 bedroom leaky house with 5 dudes by the train tracks. Do the productivity gains from stack overflow "belong" to the workers? Do the productivity gains from better google search or wikipedia? If I want to charge by the product instead of hour - I can leave and start consulting or contracting. How should those productivity gains go to employees? I own equity in this company, and most others I have formerly worked for. I have free access to public equity markets, tax subsidized 401k and IRA plans which have historically enriched 100s of millions. I've been through layoffs where I didn't have to take a day of reduced salary or unemployment because of severances nor did I experience a single day of health care coverage lapse b/c of same, or b/c of spouse's insurance or public marketplace. My situation is not unique to software engineers in the USA. The public market, cheap/subsidized retirement plans + equity bonuses have effectively seized a good portion of the means of production for the workers, allowing consistent enrichment from expansion of industry. And corporate america for all it's evils has produced the entirety of the social safety net that I've used after I graduated, and that is while changing jobs basically whenever I wanted (plus one time I didn't) Guys, I don't see it yet. Maybe I'm dumb, but it's not here yet and there is a case to be optimistic that everyone is ignoring. Prepare for the worst, but once prepared, banish it from your mind.

ForHackernews 7mo ago

Your math is missing the fact that Apple products are differentiated from their competitors. If AI becomes a ubiquitous commodity, it's not worth 300B/y. Potable water is far more important than AI or iPads ever will be, but the world's most valuable water company only does about 5B/year in revenue: https://en.wikipedia.org/wiki/American_Water_Works https://en.wikipedia.org/wiki/American_Water_Works

jvanderbot 7mo ago
The point is that the market is big, and capturing a small part of it would make these companies wildly successful; and there's no need to make unemployment inevitable - I think this diminishes the AI Doom story quite a bit.
- ForHackernews 7mo ago
  It absolutely diminishes the AI Doom story, but it also diminishes the AI Will Be The Golden Goose story, they are two sides of the same coin. The AI companies can only capture that surplus if there are not competitive substitutes available. In the same way that Amazon gets rich taking ElasticSearch for free and charging for hosting, Amazon will take free models and charge to host them. The companies building frontier models have massive R&D costs and no moat.
  - jvanderbot 7mo ago
    I'd say 20% productivity growth with no increased salaries is a golden goose. This comes from offloading 20% to AI as discussed, and still working same hours. It ignores transaction costs, incomplete rollout, but is a ceiling for long term growth in AI-friendly sectors.
    - ForHackernews 7mo ago
      I feel like we're talking past each other: a magic 20% productivity boost (or 100%, or 500%) for your company is worth nothing if your competitors all get the same magic dust.

w10-1 7mo ago

The replace-work TAM is overstated because it fails to address transaction costs, which are astronomical when refactoring work and dislodging stakeholders with sunk costs. Coding is now the leading app for AI now because it had already been factored to support division of labor, outsourcing, and remote work. It's also understated, because the real value of AI is not in replacing work, but making new products possible either because it's finally cheap enough to make them, or because -- AI.

dzonga 7mo ago

very apt analogy - same as your other one LLMs are similar to CNC machines. Given the state of AI (LLMs) - they still need a very human (skilled driver) to operate