4 ms·

This may just be a classic case of Jevons paradox: https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox In short, better h

by jrflo 2mo ago

This may just be a classic case of Jevons paradox: https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox In short, better hardware will drive down token cost in the near-term, but will drive up the demand for tokens as it gets cheap enough for other sectors to start to use it heavily. It comes from steam engines where economists originally thought that coal demand would plummet with more efficient engines, but it actually just meant that we found more uses for steam engines.

kilroy123 2mo ago
This is exactly what I see happening now. Codex keeps doing these usage resets. What do I do? Burn even more tokens than ever before. I know I'm not the only one.
- CapsAdmin 2mo ago
  Is this a normal thing now? I remember seeing this talked about as a surprising thing, but now I'm seeing posts about this as if it's normal. (I switched to using local models as usage limits, api instability and the concept of paying per token stresses me out)
anthonypasq 2mo ago
the total cost spent on tokens may go up, but i just cant imagine per token costs going up
- jrflo 2mo ago
  Depends on compute capacity. If we become supply constrained on tokens, then prices will necessarily go up.
  - anthonypasq 2mo ago
    no they dont because inference stacks are getting more efficient and models are getting more intelligent per parameter.
    - vlovich123 2mo ago
      I would posit there’s no way in hell they’re getting sufficiently cheaper on a short enough time frame vs how much demand is sky rocketing. AI companies are seeing quarterly doubling of revenue if not more.
goodmythical 2mo ago
[flagged]
- theobreuerweil 2mo ago
  [dead]
- senordevnyc 2mo ago
  There is something counter-intuitive about the idea that making an engine that accomplishes the same amount of work with half the fuel will result in MORE fuel usage overall. You might expect it to be the same, or decline slightly, but the paradoxical element is that overall consumption goes up. And you can say of course, it's so obvious, how could a dumdum not see that! But then there are lots of examples of things where increased efficiency results in less usage overall, because demand is inelastic, etc. Jevon's paradox doesn't apply to everything. I don't think we know yet what is going to happen as software development gets much cheaper. If in ten years we can produce software 1000x more cost effectively, will we need fewer software engineers, the same, or more? Guess we'll see!
  - Imustaskforhelp 2mo ago
    > I don't think we know yet what is going to happen as software development gets much cheaper. If in ten years we can produce software 1000x more cost effectively, will we need fewer software engineers, the same, or more? Guess we'll see! Adding onto it, I feel as if this relates to some points regarding predictions of future in general. It is easier for us to look from the future to the past and think that it must be very obvious (as you also mention) but its also very counter-intuitive at the same time and there are just so so much nuance about basically any situation within it that its hard to really capture it all, and even then, be prepared for surprises and counter-intuitiveness. I really like the Peter Drucker quote about it. “The only thing we know about the future is that it will surprise us.” — Peter Drucker and, “The future is fundamentally different from the past.” — Frank Knight, Risk, Uncertainty and Profit (1921)
sobellian 2mo ago
If we are applying Jevons paradox to this then the unit being consumed is not tokens but the inputs for token production - power, capex, something else. To draw an analogy to the steam engine, coal:electricity::mechanical-work:tokens. Jevons paradox does not talk about mechanical work becoming cheaper in the short term setting up a sort of rubber band of demand creating spiking prices for mechanical work. Compared to the renaissance, mechanical work was much cheaper throughout the industrial revolution and remains cheaper to this day. We can still definitely say that the easier it is to produce tokens, the cheaper they will be.
- vlovich123 2mo ago
  All Jevon’s paradox says is that as a resource becomes cheaper total consumption of that resource increases. It applies equally well to the inputs of token production as it does to the tokens themselves. The former would describe the effect the sellers into AI companies see (energy, GPU chips, RAM etc - if they lower their prices they’ll have more overall consumption) while the latter describes what the AI companies see with their customers (if they lower token prices consumers will use more tokens overall).
  - sobellian 2mo ago
    Jevons paradox states it might increase. It is not an ironclad law and there are many many cases where increasing efficiency wrt. a certain resource really will decrease the total consumption of that resource. Yes tokens are an input themselves, but this thread is discussing hardware that is more efficient at generating tokens. To increase the efficiency by which tokens are converted into some other product would require innovation in some other area - harnesses, the models themselves, better skill from the prompters, etc.
altmanaltman 2mo ago
I think you're reducing a very complex thing (the global economy) into a very simplistic model (Jevons' paradox) and thinking both are the same thing. This has no predictive power or rigor. You're just wishing things would happen as they did before, without considering that conditions and situations change significantly, and instead of Jevon's paradox, we look back at today 50 years from now and talk about Jensen's paradox. This doesn't mean the concept is BS, but one single concept cannot explain away everything in such a system.
holoduke 2mo ago
That's when demand is higher than capacity. Now imagine places like Gigalab and Chinese labs are online and able to produce significant percentage of chips. That could cause real surge in prices.
cactusplant7374 2mo ago
It is incredibly cheap now. What sectors are you thinking of?

by jrflo 2mo ago

kilroy123 2mo ago

This is exactly what I see happening now. Codex keeps doing these usage resets. What do I do? Burn even more tokens than ever before. I know I'm not the only one.

CapsAdmin 2mo ago
Is this a normal thing now? I remember seeing this talked about as a surprising thing, but now I'm seeing posts about this as if it's normal. (I switched to using local models as usage limits, api instability and the concept of paying per token stresses me out)

anthonypasq 2mo ago

the total cost spent on tokens may go up, but i just cant imagine per token costs going up

jrflo 2mo ago
Depends on compute capacity. If we become supply constrained on tokens, then prices will necessarily go up.
- anthonypasq 2mo ago
  no they dont because inference stacks are getting more efficient and models are getting more intelligent per parameter.
  - vlovich123 2mo ago
    I would posit there’s no way in hell they’re getting sufficiently cheaper on a short enough time frame vs how much demand is sky rocketing. AI companies are seeing quarterly doubling of revenue if not more.

goodmythical 2mo ago

[flagged]

theobreuerweil 2mo ago
[dead]
senordevnyc 2mo ago
There is something counter-intuitive about the idea that making an engine that accomplishes the same amount of work with half the fuel will result in MORE fuel usage overall. You might expect it to be the same, or decline slightly, but the paradoxical element is that overall consumption goes up. And you can say of course, it's so obvious, how could a dumdum not see that! But then there are lots of examples of things where increased efficiency results in less usage overall, because demand is inelastic, etc. Jevon's paradox doesn't apply to everything. I don't think we know yet what is going to happen as software development gets much cheaper. If in ten years we can produce software 1000x more cost effectively, will we need fewer software engineers, the same, or more? Guess we'll see!
- Imustaskforhelp 2mo ago
  > I don't think we know yet what is going to happen as software development gets much cheaper. If in ten years we can produce software 1000x more cost effectively, will we need fewer software engineers, the same, or more? Guess we'll see! Adding onto it, I feel as if this relates to some points regarding predictions of future in general. It is easier for us to look from the future to the past and think that it must be very obvious (as you also mention) but its also very counter-intuitive at the same time and there are just so so much nuance about basically any situation within it that its hard to really capture it all, and even then, be prepared for surprises and counter-intuitiveness. I really like the Peter Drucker quote about it. “The only thing we know about the future is that it will surprise us.” — Peter Drucker and, “The future is fundamentally different from the past.” — Frank Knight, Risk, Uncertainty and Profit (1921)

sobellian 2mo ago

If we are applying Jevons paradox to this then the unit being consumed is not tokens but the inputs for token production - power, capex, something else. To draw an analogy to the steam engine, coal:electricity::mechanical-work:tokens. Jevons paradox does not talk about mechanical work becoming cheaper in the short term setting up a sort of rubber band of demand creating spiking prices for mechanical work. Compared to the renaissance, mechanical work was much cheaper throughout the industrial revolution and remains cheaper to this day. We can still definitely say that the easier it is to produce tokens, the cheaper they will be.

vlovich123 2mo ago
All Jevon’s paradox says is that as a resource becomes cheaper total consumption of that resource increases. It applies equally well to the inputs of token production as it does to the tokens themselves. The former would describe the effect the sellers into AI companies see (energy, GPU chips, RAM etc - if they lower their prices they’ll have more overall consumption) while the latter describes what the AI companies see with their customers (if they lower token prices consumers will use more tokens overall).
- sobellian 2mo ago
  Jevons paradox states it might increase. It is not an ironclad law and there are many many cases where increasing efficiency wrt. a certain resource really will decrease the total consumption of that resource. Yes tokens are an input themselves, but this thread is discussing hardware that is more efficient at generating tokens. To increase the efficiency by which tokens are converted into some other product would require innovation in some other area - harnesses, the models themselves, better skill from the prompters, etc.

altmanaltman 2mo ago

I think you're reducing a very complex thing (the global economy) into a very simplistic model (Jevons' paradox) and thinking both are the same thing. This has no predictive power or rigor. You're just wishing things would happen as they did before, without considering that conditions and situations change significantly, and instead of Jevon's paradox, we look back at today 50 years from now and talk about Jensen's paradox. This doesn't mean the concept is BS, but one single concept cannot explain away everything in such a system.

holoduke 2mo ago

That's when demand is higher than capacity. Now imagine places like Gigalab and Chinese labs are online and able to produce significant percentage of chips. That could cause real surge in prices.

cactusplant7374 2mo ago

It is incredibly cheap now. What sectors are you thinking of?