8 ms·

Uber president says AI spending is getting 'harder to justify'

304 points by berlianta 5mo ago

chollida1 5mo ago
I do find it to be true that with coding agents the famous quote from Jurassic Park goes through my head multiple time a day "our scientists were so preoccupied with whether they could, they never stopped to ask if they should. I've now come to the realization that if I'm having an llm work constantly all day writing code for me i'm probably doing something wrong as I'm no longer focusing on the core issue itself. I may be in a minority here in that I write code to augment my self and not to ship to others so I can tell very quickly if I'm just gold platting something or if i'm actually delivering real value to my trading or risk management.
kshri24 5mo ago
I still get picked up by an Uber the same way. As an end user, nothing has changed for me. So I wonder what the heck were all those billions of AI tokens burnt on that they extinguished it in just 4 months into the year?
- fancyfredbot 5mo ago
  Apparently: * In App Hotel bookings in partnership with Expedia. * Travel Mode with suggestions on where to eat and visit when travelling. * Eats for the way - your driver picks up a takeaway for you to eat while they drive you to your destination. * Voice bookings using AI and speech to text. How did we ever live without them!
  - burkaman 5mo ago
    > Eats for the way - your driver picks up a takeaway for you to eat while they drive you to your destination. This seems like the kind of terrible idea that an LLM might have come up with. I'm pretty sure most drivers do not want people eating (especially a whole meal) in their car, and I can't imagine a lot of instances where you're calling an Uber and don't have time to get yourself food, but don't mind waiting an extra 10 minutes for the driver to detour, find parking, and wait for your food.
    - jmuguy 5mo ago
      Not to mention what anyone who's worked in an office with a shared kitchen can tell you - the smell getting into a car where an indeterminate amount of people have eaten different meals. Like climbing into a food court dumpster.
    - lukeschlather 5mo ago
      > I can't imagine a lot of instances where you're calling an Uber and don't have time to get yourself food Recently I got a car to take me to the train station and picked up food on the way. Seems pretty common to me. Of course, I didn't need or want it charged as a premium feature in the app.
      - newaccountman2 5mo ago
        I have never heard of someone doing that tbh, this is the first time.
        generalpf 5mo ago
        You can get any Uber driver to do it for you if you offer to buy them food too and do it off the books.
        newaccountman2 5mo ago
        I didn't say I doubted it was possible lol, just that I had never heard of anyone doing it.
        lukeschlather 5mo ago
        You just do a ride with two stops, one at the restaurant, and ask them to wait. It's not remotely clandestine or complicated.
  - newaccountman2 5mo ago
    Holy fuck, aside from the voice bookings, that's some useless shit to spend money building as far as both tokens and salaries go. Are they profitable yet lol
    - ryandrake 5mo ago
      This seems like the doom of all tech companies that hit a single kernel of a good idea, hire a big development team to build it, and then, once it's running well and making money, leadership looks around and sees this big body of developers, product managers, project managers, QA, and management tree, looking around for something else to do. Then, instead of saying, "Let's find the next big thing to do," they say, "Cram dozens more things into the thing that already works. Anything you can think of, spin up a team of 10 to bolt it onto the main product. Move things around to make everything fit. Run experiments on users to see if this new crap moves the metrics. A/B test to see what we should keep and what we should silently remove next update. Attach this other company's product that we just bought." In a few years, what do you end up with? The modern version of every single fucking app we use today.
    - smelendez 5mo ago
      Well, travel booking is one of those things every company wants to get involved with because it's just straight referral fees. I get advertisements to book travel through my phone company (T-Mobile US) and a slew of financial services companies. If it's easy enough to add to the app and sticks around for a while, it may well be profitable even if only a small percentage of customers use it or even realize it's available.
    - vanuatu 5mo ago
      they are very profitable now!
  - fg137 5mo ago
    For context, this is an interview where Uber CEO discussed these ideas: https://www.theverge.com/podcast/922909/dara-khosrowshahi-uber-drivers-ai-hotels-service https://www.theverge.com/podcast/922909/dara-khosrowshahi-ub... Can't say I am convinced.
- Aurornis 5mo ago
  This argument is funny because you could have said the same thing 4 years ago: Uber still picks you up just as it did years before that, so what did all those millions spent on developer salaries get them? Uber’s business is relentlessly confusing for people who think it’s a simple app to send an alert to a nearby driver to pick you up. Uber operates at a scale where there are no trivial problems because even small changes can impact hundred of thousands of customers. They can also justify spending time and money on new features that only 0.1% of customers might use because 0.1% of their customers is a very large number.
  - thewebguyd 5mo ago
    Uber also has to maintain thousands of region specific rules and features to be able to operate globally, and they do it all in the same app instead of having specific regional versions (which would be a terrible user experience for frequent travelers). That alone is a ton of work the end user will never see but is core to their operation.
  - kshri24 5mo ago
    This is not just me saying it. The Uber president himself says it in the article. > so what did all those millions spent on developer salaries get them? There was no doubt about what these developer salaries got them. It was to keep Uber stable and running in thousands of jurisdictions with varying rules/regulations. The idea of using AI was (I hope) not just to replace developers for this purpose but to also ship features/products beyond what was already being offered. It has however not panned out as these CEOs/execs thought it would. > They can also justify spending time and money on new features that only 0.1% of customers might use because 0.1% of their customers is a very large number. And what are those features exactly? Because even the President of Uber doesn't seem to know: "“That link is not there yet, right? I think maybe implicitly there is more that is getting shipped, but it’s very hard to draw a line between one of those stats and, ‘Okay, now we’re actually producing 25 percent more useful consumer features,’” said Macdonald." The budget allocated to AI for the year has been wiped out in 4 months.
- tayo42 5mo ago
  There's probably tons of backend projects going on, expanding in countries, payments, complying with regulations, effeciency and reliability projects. They also do food delivery. There's a whole engineering team to support
deaton 5mo ago
Goodhart's law strikes again. Stop giving your engineers token-burning quotas or they'll burn tokens.
- dangus 5mo ago
  I really don’t understand on the customer side of B2B why so many companies actively encouraged AI tooling costs. I can understand it from the side of the companies selling tokens and AI hardware. I don’t understand the race to spend more on internal tools. I’ve been sitting around waiting for my company to buy a number of necessary bits of tools. They cheap out on every solution imaginable. Datadog is too expensive, let’s buy a cheap solution that costs us months of setup time. Configuration management is too expensive, let’s use the free version with no audit trail or dashboard. But everyone…in the entire company…gets multiple AI tool subscriptions. I don’t remember investors being this stupid at any other point. I don’t recall investors pressuring my company to use blockchain or NFTs.
  - xingped 5mo ago
    Nothing that C-execs and management advocates for has made any sense for a long time now. If this is the first you're starting to question it all, I must ask what rock you're sleeping under because I desperately need a really good nap...
    - dangus 5mo ago
      I knew they were stupid, I just didn’t know it got way down to this level
      - hilariously 5mo ago
        Strategy - just doing what your friends on the golf course are doing. The number of times I have been told "oh I talked to so and so and they are having SUCH a good time using X" and then three years later "oh I talked to so and so and they got rid of X as soon as they could, we should switch!"
xnx 5mo ago
Dupe: https://news.ycombinator.com/item?id=48268871 https://news.ycombinator.com/item?id=48268871
- berlianta 5mo ago
  go ahead
sbmthakur 5mo ago
Affordable inference will be around longer if more Big tech companies cap their AI sending.
Mistletoe 5mo ago
It feels like maybe the wheels are starting to fall off the AI hype train. I expect complete collapse once people start figuring out that the numbers on all this don’t make sense. I’m looking for investment portfolios that will weather that storm. If you are reading this and have a similar curiosity, this is a great place to start. https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/ https://portfoliocharts.com/2021/12/16/three-secret-ingredie...
- rtkwe 5mo ago
  I've been thinking that for years about various sources and the bubble stubbornly refuses to pop on a convenient timeline so I'm falling back on the adage "time in the market beats trying to time the market". Index funds and chill is much more relaxed than trying to determine who's actually going to survive the AI bubble popping.
  - DesiLurker 5mo ago
    this is the reason I refuse to budge from my index portfolio besides small 'play money' ventures. My investing philosophy is basically by the time it hits wire you dont know what portion of it factored in. especially in age of AI and automation IMO alpha will vanish faster as anyone can code up eqv of a bloomberg terminal themselves. So all thats left is how do you manage downturns, when market heads down 30% but your handpicked stocks go down 60% you need to have enough wherewithal to hold through bad times. this is where true test of faith comes, I believe I would be cowardly and sell out at wrong time. So its best to just hold index and market sort the bloodbath out itself.
    - rtkwe 4mo ago
      Yeah I don't have the time or the patience to try to pick and think about long term choices beyond some sector or tailored mutual funds/ETFs. Doesn't help my job comes with pretty heavy trade restrictions so I have to get pre-approval for individual stock trades AND surrender any profits on sells less than 60 days after buying. Honestly probably wouldn't do much even without those restrictions but it completely kills it for me.
ex-aws-dude 5mo ago
What has been the end result of all the tokens companies are burning? Where does it show up in quarterly results? I can’t see how it’s sustainable just based on “this feels more productive”
- zitterbewegung 5mo ago
  Advancement in AI research seems to be the only thing at this point.
- bitwize 5mo ago
  > Where does it show up in quarterly results? Standard answer is "companies that are not seeing significant gains from AI just aren't AI-ing hard enough, trust me bro".
- gizajob 5mo ago
  In the big red number shown after revenue where profits used to be.
- joenot443 5mo ago
  A friend of mine added some pretty extensive iOS UI tests to a keystone feature hit by millions every month. They'd been kicking the can down the road for years, trying to fit it in their roadmap, and with Claude running overnight they were able to bang out the whole suite in a week. I'm not sure how it would show up in quarterly results.
  - dotancohen 5mo ago
    > I'm not sure how it would show up in quarterly results. Technical debt is famously difficult to express in either layman's terms or financial terms.
    - PearlRiver 5mo ago
      Everything can be expressed in financial terms- it is one of the guiding principles of the universe. Anyone who thinks they are above or beyond it will rue the day.
nlawalker 5mo ago
I never took tokenmaxxing to be about improving productivity directly; mundane feature work that comes out of it is just a side effect. I always saw it as a race between these big tech companies to get a generational advantage by being the one to discover the way of the future, with respect to harnessing AI to actually and truly automate software development. EDIT: whoa, I used "way of the future" as a reference to Howard Hughes in "The Aviator", not this Way of the Future religious organization thing I just stumbled on; no intended reference there.
- layer8 5mo ago
  To the extent that figuring out the true automation will lead to layoffs, that knowledge will quickly spread as the laid-off knowledge workers are available for hiring.
- infecto 5mo ago
  Agree and I have wondered behind close doors if this is not the mental model. You need to spend money to see what is working this was simply a way to see that.
- lazide 5mo ago
  Eh, I also saw it as a rather blatant attempt to undermine the bargaining power of the Software Engineer (which had grown to insane proportions over the years) - both in working conditions and raw cash money. In many cases it really didn’t/doesn’t matter if the AI automation actually works, just that people think it could - and hence leave money on the table.
  - lenerdenator 5mo ago
    > insane Not sure if you mean this in a good or bad way.
    - lazide 5mo ago
      Good/bad entirely depends on if you are management/shareholders, or the engineer in question. It was pretty nuts either way though eh? End of an era
dwa3592 5mo ago
I am not sure how uber is operating internally around the use of tokens but if they actually shipped features faster than before then it is still a win. if they learn that users don't want these features or want a different version of it; they have learned this new knowledge faster than they would have if they manually coded those features, which means in principle you should be able to iterate faster. but this will collide with creative ceiling that humans exhibit in a span of time and on top of that uber is prioritizing spending money on tokens over humans which seems like a mistake. you need humans for creativity.
- kllrnohj 5mo ago
  I used Uber for the first time in like 8 years recently, and near as I can tell it's the exact same thing it was. What features are they even adding at all much less that anyone cares about? You ask for a ride to a place, a driver shows up, money is exchanged - the end? Sometimes things are actually just finished. They don't need to treadmill.
  - datadrivenangel 5mo ago
    They have to make it easier for ubereats orders to have parts of their bill attached to a corporate card and half attached to someone's personal card and be able to split the invoices!
- surgical_fire 5mo ago
  > if they actually shipped features faster than before then it is still a win Depends on the cost
- redhale 5mo ago
  This is "Feature Factory" thinking, and it is usually not ideal. Feature count is a poor metric to optimize against. Instead, ROI and delivered customer value should be the focus of product development investments.
louiereederson 5mo ago
Anthropic's annualized run rate is >$40b according to outside reporting. AWS hit that by Q4 2019. There were still debates on public cloud vs on prem at that time, but by late 2019 public cloud had facilitated the creation or adoption of entire categories of software within SaaS and PaaS, not to mention consumer internet businesses like Uber and Airbnb. The net impact of AI coding tools is far more ambiguous in comparison. The profitability comparison is fraught but worth noting that by then AWS was already extremely profitable.
- testbjjl 5mo ago
  Amazon was AWS first customer. I sometimes feel if the AI companies promises of their models replacing all SWE, they would be a top 3 product/service in any number of businesses and not selling shovels to miners.
  - electroly 5mo ago
    > Amazon was AWS first customer It wasn't. The retail business took years to move to AWS. They could not even be described as early adopters of AWS.
  - marrone12 5mo ago
    But they do use their models internally quite a bit. Claude code head talks about how he doesn't write any code himself anymore and just uses agents to do everything. So they are using it themselves.
  - alfiedotwtf 5mo ago
    ”AI models will replace software developed in 6 months” — CEO of Anthropic, the employer of over 2000 developers, over 6 months ago
- johnbarron 5mo ago
  Anthropic will not have as many husbands as they think by next year: https://xkcd.com/605/ https://xkcd.com/605/
- ozozozd 5mo ago
shay_ker 5mo ago
hot take: token spend can be used a honey pot, especially when compared to what you deliver. spend accordingly!
rowanseymour 5mo ago
Now feels like a very good time to be a small team of experienced developers who can largely work on stuff by themselves and not a corporation of hundreds of developers of varying abilities all now trying to show how much code they can generate and how many tokens they can burn.
- dylan604 5mo ago
  Even small teams are not immune from the AI push. I work in a small <10 people with 3 devs. I'm the only one not using AI while receiving push that I'm a problem for not. To the point, VP of company says if we don't all start using AI we'll be out of business because other people will. :face-palm:
  - niwtsol 5mo ago
    You don't use AI at all? What is your main justification for not?
    - pesus 5mo ago
      Seems like you should have a justification for introducing a new tool instead, no? There are thousands of other tools they're also not using, but we're not asking about those.
    - nitwit005 5mo ago
      I'd definitely say IntelliJ improved my productivity. No one cared. If anything, management viewed it as a nuisance as they had to deal with the license. Now there is demands to justify not using AI like this, but people don't care about details. Which AI tool I use apparently doesn't matter at all, even if there are presumably productivity differences between them. Edit: typo
    - dylan604 5mo ago
      I don't like outsourcing learning and prefer to do the actual learning. Just like taking notes via recorder vs writing them down during a lecture causes you to not remember the information as well. Allowing something else to create your code tends to mean you're not going to remember/know the how/why it works and you just accept it works and moves on. Eventually you don't know how any of it works and you're totally dead in the water without the LLM. My understanding of the code I write is much more valuable than some arbitrary deadline that means nothing
juancn 5mo ago
There's also the issue that in any large-ish org, code production is hardly ever the bottleneck.
- jolt42 5mo ago
  I like the qualification of "large-ish". When someone says code is not the bottleneck, I assume they work for a large company. To be fair, at a start-up developers think they code at least 4 hours a day, but it never averages that either.
deleted 5mo ago
[deleted]
DesiLurker 5mo ago
I actually think Chinese models have already popped the bubble, we just dont see it yet. the only way to justify AI IPO market cap is basically if they get to hold most sw industry code hostage and then token-flate budgets to collect AI tax. short of that AI expense would very quickly mean revert to model + some margin. this means the moat for AI 'trillion club' is gone. In fact AI virtually guarantees that there is no execution-moat left anywhere, definitely not in code or that engineer with knowledge about that obscure mechanism. without the moat most of the sw ecossytem's margins would shrink (as they should). Ironically enough the only moat left would be what you can buy from Washington.
- seiwj 5mo ago
  Agreed. We have to wait a whole year (sigh) since firms generally wait a whole financial year to do critical reviews
lenerdenator 5mo ago
My concern here is that they'll mix two things: 1) workforce reduction 2) AI spend (reduce tokenmaxing) They'll expect fewer people to do more with even less, while "more" is continuously increasing. When I say "more", I mean that the deluge that engineering teams deal with comes from two sources: 1) the business side of companies - marketing, sales, solutions teams, etc. 2) outside actors, mainly security threats The first source can now move to generate work for engineering faster than ever. They expect the nerds to do what they're told and get the features out now. The more features, the better the product, right? The saving grace here is that they're bound by the same management concerns that engineering has. There's only so much money that they themselves can throw at generating more work for engineering teams, and that might also come under scrutiny from management, so that acts as a brake. The second source has no such brake, especially not with security threats. Either there's good money to be made by holding company data hostage, or there's an endless supply of resources (read: nation-state resources) dedicated to the effort to attack the company's digital assets. And of course, they're using AI to enable this, just without the "but what about the shareholders!?" handwringing. If you aren't very, very careful with your token cutting, you're going to put yourself at a disadvantage against that second group.
cdrnsf 5mo ago
This doesn't account for the fact that review is still a bottleneck, engineers understand much less of the code they're shipping and there'll likely be tech debt they'll have to unwind in the future.
expedition32 5mo ago
You don't need justification to spend other people's money! Nobody's going to jail.
heathrow83829 5mo ago
Didn't google say that AI had increased their company's productivity by 10%? if that's the case, then how can they justify spending 50% to 100% of wages on it?
jimkleiber 5mo ago
I wish they would spend some of that on the help/support function within their apps. Whenever I have a problem on Uber, it feels like a never-ending maze to figure out how to get any support, and I consider myself versed in navigating unseemly UI, I can only imagine how much it might frustrate people who struggle navigating apps. Any idea why their help function seems to impenetrable and if AI might help with it?
- redhale 5mo ago
  I think this is clearly be design. They don't want to provide support, they want you to give up and let your issue go.
  - jimkleiber 5mo ago
    It might be. It also lets my loyalty go slowly by slowly. Monopolies work until they collapse. If you can't tell, it frustrates me so much. I wonder how the internal culture of Uber changed when it went from almost zero interest rates to now trying to make lots of profit. My friend said he realized Uber can just rely on a steady stream of people either growing up or getting laid off and trying to make a quick buck, so they can treat their drivers poorly as well. I'm not sure what's happening, just know support may be a lot simpler and cheaper to address than nothing, or at least in the medium to long term, but maybe not?
bmitc 5mo ago
And here we are.
trappedot 5mo ago
[flagged]
meerita 5mo ago
I wonder how hard would be spend maybe 50% of that budget and build a farm of GPUs to run the models locally. I guess it would be a lot of work, but it would be interesting to see how it compares in terms of performance and cost.
gamblor956 5mo ago
Outside of tech, most companies have already begun pulling back and cancelling their AI spend. (The trend actually started last year.) Most of the time, the tasks that AI would take over aren't the bottleneck in the business process, so having AI do something faster isn't very useful. It's definitely not useful enough to justify spending more than two digits a month on a recurring subscription, but the price point at which AI is a viable product is far below the price point necessary to sustain even a single AI company.
willXare 5mo ago
[flagged]

304 points by berlianta 5mo ago

I do find it to be true that with coding agents the famous quote from Jurassic Park goes through my head multiple time a day "our scientists were so preoccupied with whether they could, they never stopped to ask if they should. I've now come to the realization that if I'm having an llm work constantly all day writing code for me i'm probably doing something wrong as I'm no longer focusing on the core issue itself. I may be in a minority here in that I write code to augment my self and not to ship to others so I can tell very quickly if I'm just gold platting something or if i'm actually delivering real value to my trading or risk management.

kshri24 5mo ago

I still get picked up by an Uber the same way. As an end user, nothing has changed for me. So I wonder what the heck were all those billions of AI tokens burnt on that they extinguished it in just 4 months into the year?

fancyfredbot 5mo ago
Apparently: * In App Hotel bookings in partnership with Expedia. * Travel Mode with suggestions on where to eat and visit when travelling. * Eats for the way - your driver picks up a takeaway for you to eat while they drive you to your destination. * Voice bookings using AI and speech to text. How did we ever live without them!
- burkaman 5mo ago
  > Eats for the way - your driver picks up a takeaway for you to eat while they drive you to your destination. This seems like the kind of terrible idea that an LLM might have come up with. I'm pretty sure most drivers do not want people eating (especially a whole meal) in their car, and I can't imagine a lot of instances where you're calling an Uber and don't have time to get yourself food, but don't mind waiting an extra 10 minutes for the driver to detour, find parking, and wait for your food.
  - jmuguy 5mo ago
    Not to mention what anyone who's worked in an office with a shared kitchen can tell you - the smell getting into a car where an indeterminate amount of people have eaten different meals. Like climbing into a food court dumpster.
  - lukeschlather 5mo ago
    > I can't imagine a lot of instances where you're calling an Uber and don't have time to get yourself food Recently I got a car to take me to the train station and picked up food on the way. Seems pretty common to me. Of course, I didn't need or want it charged as a premium feature in the app.
    - newaccountman2 5mo ago
      I have never heard of someone doing that tbh, this is the first time.
      - generalpf 5mo ago
        You can get any Uber driver to do it for you if you offer to buy them food too and do it off the books.
        newaccountman2 5mo ago
        I didn't say I doubted it was possible lol, just that I had never heard of anyone doing it.
        lukeschlather 5mo ago
        You just do a ride with two stops, one at the restaurant, and ask them to wait. It's not remotely clandestine or complicated.
- newaccountman2 5mo ago
  Holy fuck, aside from the voice bookings, that's some useless shit to spend money building as far as both tokens and salaries go. Are they profitable yet lol
  - ryandrake 5mo ago
    This seems like the doom of all tech companies that hit a single kernel of a good idea, hire a big development team to build it, and then, once it's running well and making money, leadership looks around and sees this big body of developers, product managers, project managers, QA, and management tree, looking around for something else to do. Then, instead of saying, "Let's find the next big thing to do," they say, "Cram dozens more things into the thing that already works. Anything you can think of, spin up a team of 10 to bolt it onto the main product. Move things around to make everything fit. Run experiments on users to see if this new crap moves the metrics. A/B test to see what we should keep and what we should silently remove next update. Attach this other company's product that we just bought." In a few years, what do you end up with? The modern version of every single fucking app we use today.
  - smelendez 5mo ago
    Well, travel booking is one of those things every company wants to get involved with because it's just straight referral fees. I get advertisements to book travel through my phone company (T-Mobile US) and a slew of financial services companies. If it's easy enough to add to the app and sticks around for a while, it may well be profitable even if only a small percentage of customers use it or even realize it's available.
  - vanuatu 5mo ago
    they are very profitable now!
- fg137 5mo ago
  For context, this is an interview where Uber CEO discussed these ideas: https://www.theverge.com/podcast/922909/dara-khosrowshahi-uber-drivers-ai-hotels-service https://www.theverge.com/podcast/922909/dara-khosrowshahi-ub... Can't say I am convinced.
Aurornis 5mo ago
This argument is funny because you could have said the same thing 4 years ago: Uber still picks you up just as it did years before that, so what did all those millions spent on developer salaries get them? Uber’s business is relentlessly confusing for people who think it’s a simple app to send an alert to a nearby driver to pick you up. Uber operates at a scale where there are no trivial problems because even small changes can impact hundred of thousands of customers. They can also justify spending time and money on new features that only 0.1% of customers might use because 0.1% of their customers is a very large number.
- thewebguyd 5mo ago
  Uber also has to maintain thousands of region specific rules and features to be able to operate globally, and they do it all in the same app instead of having specific regional versions (which would be a terrible user experience for frequent travelers). That alone is a ton of work the end user will never see but is core to their operation.
- kshri24 5mo ago
  This is not just me saying it. The Uber president himself says it in the article. > so what did all those millions spent on developer salaries get them? There was no doubt about what these developer salaries got them. It was to keep Uber stable and running in thousands of jurisdictions with varying rules/regulations. The idea of using AI was (I hope) not just to replace developers for this purpose but to also ship features/products beyond what was already being offered. It has however not panned out as these CEOs/execs thought it would. > They can also justify spending time and money on new features that only 0.1% of customers might use because 0.1% of their customers is a very large number. And what are those features exactly? Because even the President of Uber doesn't seem to know: "“That link is not there yet, right? I think maybe implicitly there is more that is getting shipped, but it’s very hard to draw a line between one of those stats and, ‘Okay, now we’re actually producing 25 percent more useful consumer features,’” said Macdonald." The budget allocated to AI for the year has been wiped out in 4 months.
tayo42 5mo ago
There's probably tons of backend projects going on, expanding in countries, payments, complying with regulations, effeciency and reliability projects. They also do food delivery. There's a whole engineering team to support

deaton 5mo ago

Goodhart's law strikes again. Stop giving your engineers token-burning quotas or they'll burn tokens.

dangus 5mo ago
I really don’t understand on the customer side of B2B why so many companies actively encouraged AI tooling costs. I can understand it from the side of the companies selling tokens and AI hardware. I don’t understand the race to spend more on internal tools. I’ve been sitting around waiting for my company to buy a number of necessary bits of tools. They cheap out on every solution imaginable. Datadog is too expensive, let’s buy a cheap solution that costs us months of setup time. Configuration management is too expensive, let’s use the free version with no audit trail or dashboard. But everyone…in the entire company…gets multiple AI tool subscriptions. I don’t remember investors being this stupid at any other point. I don’t recall investors pressuring my company to use blockchain or NFTs.
- xingped 5mo ago
  Nothing that C-execs and management advocates for has made any sense for a long time now. If this is the first you're starting to question it all, I must ask what rock you're sleeping under because I desperately need a really good nap...
  - dangus 5mo ago
    I knew they were stupid, I just didn’t know it got way down to this level
    - hilariously 5mo ago
      Strategy - just doing what your friends on the golf course are doing. The number of times I have been told "oh I talked to so and so and they are having SUCH a good time using X" and then three years later "oh I talked to so and so and they got rid of X as soon as they could, we should switch!"

xnx 5mo ago

Dupe: https://news.ycombinator.com/item?id=48268871 https://news.ycombinator.com/item?id=48268871

berlianta 5mo ago
go ahead

sbmthakur 5mo ago

Affordable inference will be around longer if more Big tech companies cap their AI sending.

Mistletoe 5mo ago

It feels like maybe the wheels are starting to fall off the AI hype train. I expect complete collapse once people start figuring out that the numbers on all this don’t make sense. I’m looking for investment portfolios that will weather that storm. If you are reading this and have a similar curiosity, this is a great place to start. https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/ https://portfoliocharts.com/2021/12/16/three-secret-ingredie...

rtkwe 5mo ago
I've been thinking that for years about various sources and the bubble stubbornly refuses to pop on a convenient timeline so I'm falling back on the adage "time in the market beats trying to time the market". Index funds and chill is much more relaxed than trying to determine who's actually going to survive the AI bubble popping.
- DesiLurker 5mo ago
  this is the reason I refuse to budge from my index portfolio besides small 'play money' ventures. My investing philosophy is basically by the time it hits wire you dont know what portion of it factored in. especially in age of AI and automation IMO alpha will vanish faster as anyone can code up eqv of a bloomberg terminal themselves. So all thats left is how do you manage downturns, when market heads down 30% but your handpicked stocks go down 60% you need to have enough wherewithal to hold through bad times. this is where true test of faith comes, I believe I would be cowardly and sell out at wrong time. So its best to just hold index and market sort the bloodbath out itself.
  - rtkwe 4mo ago
    Yeah I don't have the time or the patience to try to pick and think about long term choices beyond some sector or tailored mutual funds/ETFs. Doesn't help my job comes with pretty heavy trade restrictions so I have to get pre-approval for individual stock trades AND surrender any profits on sells less than 60 days after buying. Honestly probably wouldn't do much even without those restrictions but it completely kills it for me.

ex-aws-dude 5mo ago

What has been the end result of all the tokens companies are burning? Where does it show up in quarterly results? I can’t see how it’s sustainable just based on “this feels more productive”

zitterbewegung 5mo ago
Advancement in AI research seems to be the only thing at this point.
bitwize 5mo ago
> Where does it show up in quarterly results? Standard answer is "companies that are not seeing significant gains from AI just aren't AI-ing hard enough, trust me bro".
gizajob 5mo ago
In the big red number shown after revenue where profits used to be.
joenot443 5mo ago
A friend of mine added some pretty extensive iOS UI tests to a keystone feature hit by millions every month. They'd been kicking the can down the road for years, trying to fit it in their roadmap, and with Claude running overnight they were able to bang out the whole suite in a week. I'm not sure how it would show up in quarterly results.
- dotancohen 5mo ago
  > I'm not sure how it would show up in quarterly results. Technical debt is famously difficult to express in either layman's terms or financial terms.
  - PearlRiver 5mo ago
    Everything can be expressed in financial terms- it is one of the guiding principles of the universe. Anyone who thinks they are above or beyond it will rue the day.

nlawalker 5mo ago

I never took tokenmaxxing to be about improving productivity directly; mundane feature work that comes out of it is just a side effect. I always saw it as a race between these big tech companies to get a generational advantage by being the one to discover the way of the future, with respect to harnessing AI to actually and truly automate software development. EDIT: whoa, I used "way of the future" as a reference to Howard Hughes in "The Aviator", not this Way of the Future religious organization thing I just stumbled on; no intended reference there.

layer8 5mo ago
To the extent that figuring out the true automation will lead to layoffs, that knowledge will quickly spread as the laid-off knowledge workers are available for hiring.
infecto 5mo ago
Agree and I have wondered behind close doors if this is not the mental model. You need to spend money to see what is working this was simply a way to see that.
lazide 5mo ago
Eh, I also saw it as a rather blatant attempt to undermine the bargaining power of the Software Engineer (which had grown to insane proportions over the years) - both in working conditions and raw cash money. In many cases it really didn’t/doesn’t matter if the AI automation actually works, just that people think it could - and hence leave money on the table.
- lenerdenator 5mo ago
  > insane Not sure if you mean this in a good or bad way.
  - lazide 5mo ago
    Good/bad entirely depends on if you are management/shareholders, or the engineer in question. It was pretty nuts either way though eh? End of an era

dwa3592 5mo ago

I am not sure how uber is operating internally around the use of tokens but if they actually shipped features faster than before then it is still a win. if they learn that users don't want these features or want a different version of it; they have learned this new knowledge faster than they would have if they manually coded those features, which means in principle you should be able to iterate faster. but this will collide with creative ceiling that humans exhibit in a span of time and on top of that uber is prioritizing spending money on tokens over humans which seems like a mistake. you need humans for creativity.

kllrnohj 5mo ago
I used Uber for the first time in like 8 years recently, and near as I can tell it's the exact same thing it was. What features are they even adding at all much less that anyone cares about? You ask for a ride to a place, a driver shows up, money is exchanged - the end? Sometimes things are actually just finished. They don't need to treadmill.
- datadrivenangel 5mo ago
  They have to make it easier for ubereats orders to have parts of their bill attached to a corporate card and half attached to someone's personal card and be able to split the invoices!
surgical_fire 5mo ago
> if they actually shipped features faster than before then it is still a win Depends on the cost
redhale 5mo ago
This is "Feature Factory" thinking, and it is usually not ideal. Feature count is a poor metric to optimize against. Instead, ROI and delivered customer value should be the focus of product development investments.

louiereederson 5mo ago

Anthropic's annualized run rate is >$40b according to outside reporting. AWS hit that by Q4 2019. There were still debates on public cloud vs on prem at that time, but by late 2019 public cloud had facilitated the creation or adoption of entire categories of software within SaaS and PaaS, not to mention consumer internet businesses like Uber and Airbnb. The net impact of AI coding tools is far more ambiguous in comparison. The profitability comparison is fraught but worth noting that by then AWS was already extremely profitable.

testbjjl 5mo ago
Amazon was AWS first customer. I sometimes feel if the AI companies promises of their models replacing all SWE, they would be a top 3 product/service in any number of businesses and not selling shovels to miners.
- electroly 5mo ago
  > Amazon was AWS first customer It wasn't. The retail business took years to move to AWS. They could not even be described as early adopters of AWS.
- marrone12 5mo ago
  But they do use their models internally quite a bit. Claude code head talks about how he doesn't write any code himself anymore and just uses agents to do everything. So they are using it themselves.
- alfiedotwtf 5mo ago
  ”AI models will replace software developed in 6 months” — CEO of Anthropic, the employer of over 2000 developers, over 6 months ago
johnbarron 5mo ago
Anthropic will not have as many husbands as they think by next year: https://xkcd.com/605/ https://xkcd.com/605/
ozozozd 5mo ago

shay_ker 5mo ago

hot take: token spend can be used a honey pot, especially when compared to what you deliver. spend accordingly!

rowanseymour 5mo ago

Now feels like a very good time to be a small team of experienced developers who can largely work on stuff by themselves and not a corporation of hundreds of developers of varying abilities all now trying to show how much code they can generate and how many tokens they can burn.

dylan604 5mo ago
Even small teams are not immune from the AI push. I work in a small <10 people with 3 devs. I'm the only one not using AI while receiving push that I'm a problem for not. To the point, VP of company says if we don't all start using AI we'll be out of business because other people will. :face-palm:
- niwtsol 5mo ago
  You don't use AI at all? What is your main justification for not?
  - pesus 5mo ago
    Seems like you should have a justification for introducing a new tool instead, no? There are thousands of other tools they're also not using, but we're not asking about those.
  - nitwit005 5mo ago
    I'd definitely say IntelliJ improved my productivity. No one cared. If anything, management viewed it as a nuisance as they had to deal with the license. Now there is demands to justify not using AI like this, but people don't care about details. Which AI tool I use apparently doesn't matter at all, even if there are presumably productivity differences between them. Edit: typo
  - dylan604 5mo ago
    I don't like outsourcing learning and prefer to do the actual learning. Just like taking notes via recorder vs writing them down during a lecture causes you to not remember the information as well. Allowing something else to create your code tends to mean you're not going to remember/know the how/why it works and you just accept it works and moves on. Eventually you don't know how any of it works and you're totally dead in the water without the LLM. My understanding of the code I write is much more valuable than some arbitrary deadline that means nothing

juancn 5mo ago

There's also the issue that in any large-ish org, code production is hardly ever the bottleneck.

jolt42 5mo ago
I like the qualification of "large-ish". When someone says code is not the bottleneck, I assume they work for a large company. To be fair, at a start-up developers think they code at least 4 hours a day, but it never averages that either.

deleted 5mo ago

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DesiLurker 5mo ago

I actually think Chinese models have already popped the bubble, we just dont see it yet. the only way to justify AI IPO market cap is basically if they get to hold most sw industry code hostage and then token-flate budgets to collect AI tax. short of that AI expense would very quickly mean revert to model + some margin. this means the moat for AI 'trillion club' is gone. In fact AI virtually guarantees that there is no execution-moat left anywhere, definitely not in code or that engineer with knowledge about that obscure mechanism. without the moat most of the sw ecossytem's margins would shrink (as they should). Ironically enough the only moat left would be what you can buy from Washington.

seiwj 5mo ago
Agreed. We have to wait a whole year (sigh) since firms generally wait a whole financial year to do critical reviews

lenerdenator 5mo ago

My concern here is that they'll mix two things: 1) workforce reduction 2) AI spend (reduce tokenmaxing) They'll expect fewer people to do more with even less, while "more" is continuously increasing. When I say "more", I mean that the deluge that engineering teams deal with comes from two sources: 1) the business side of companies - marketing, sales, solutions teams, etc. 2) outside actors, mainly security threats The first source can now move to generate work for engineering faster than ever. They expect the nerds to do what they're told and get the features out now. The more features, the better the product, right? The saving grace here is that they're bound by the same management concerns that engineering has. There's only so much money that they themselves can throw at generating more work for engineering teams, and that might also come under scrutiny from management, so that acts as a brake. The second source has no such brake, especially not with security threats. Either there's good money to be made by holding company data hostage, or there's an endless supply of resources (read: nation-state resources) dedicated to the effort to attack the company's digital assets. And of course, they're using AI to enable this, just without the "but what about the shareholders!?" handwringing. If you aren't very, very careful with your token cutting, you're going to put yourself at a disadvantage against that second group.

cdrnsf 5mo ago

This doesn't account for the fact that review is still a bottleneck, engineers understand much less of the code they're shipping and there'll likely be tech debt they'll have to unwind in the future.

expedition32 5mo ago

You don't need justification to spend other people's money! Nobody's going to jail.

heathrow83829 5mo ago

Didn't google say that AI had increased their company's productivity by 10%? if that's the case, then how can they justify spending 50% to 100% of wages on it?

jimkleiber 5mo ago

I wish they would spend some of that on the help/support function within their apps. Whenever I have a problem on Uber, it feels like a never-ending maze to figure out how to get any support, and I consider myself versed in navigating unseemly UI, I can only imagine how much it might frustrate people who struggle navigating apps. Any idea why their help function seems to impenetrable and if AI might help with it?

redhale 5mo ago
I think this is clearly be design. They don't want to provide support, they want you to give up and let your issue go.
- jimkleiber 5mo ago
  It might be. It also lets my loyalty go slowly by slowly. Monopolies work until they collapse. If you can't tell, it frustrates me so much. I wonder how the internal culture of Uber changed when it went from almost zero interest rates to now trying to make lots of profit. My friend said he realized Uber can just rely on a steady stream of people either growing up or getting laid off and trying to make a quick buck, so they can treat their drivers poorly as well. I'm not sure what's happening, just know support may be a lot simpler and cheaper to address than nothing, or at least in the medium to long term, but maybe not?

bmitc 5mo ago

And here we are.

trappedot 5mo ago

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meerita 5mo ago

I wonder how hard would be spend maybe 50% of that budget and build a farm of GPUs to run the models locally. I guess it would be a lot of work, but it would be interesting to see how it compares in terms of performance and cost.

gamblor956 5mo ago

Outside of tech, most companies have already begun pulling back and cancelling their AI spend. (The trend actually started last year.) Most of the time, the tasks that AI would take over aren't the bottleneck in the business process, so having AI do something faster isn't very useful. It's definitely not useful enough to justify spending more than two digits a month on a recurring subscription, but the price point at which AI is a viable product is far below the price point necessary to sustain even a single AI company.

willXare 5mo ago

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