Comment by crazygringo
18 days ago
Yup. If you follow the links to the original JP Morgan quote, it's not crazy:
> Big picture, to drive a 10% return on our modeled AI investments through 2030 would require ~$650 billion of annual revenue into perpetuity, which is an astonishingly large number. But for context, that equates to 58bp of global GDP, or $34.72/month from every current iPhone user...
> or $34.72/month from every current iPhone user...
As a current iPhone user, I'm not signing up for that especially if it is on top of the monthly cell service fee.
I do realize though that you were trying to provide useful context.
But think about it this way: something simple like Slack charges $9/month/person and companies already pay that on many behalf. How hard would it be to imagine all those same companies (and lots more) would pay $30/month/employee for something something AI? Generating an extra $400 per year in value, per employee, isn't that much extra.
$35/iPhone user is not “per corporate white collar worker”.
Think outside the coastal high paid SWE bubble and realize vast swathes of people use 5 year old phones on a $25/phone family mobile plan.
Retirees, youth, blue collar, lots of people who don’t want/need AI or wouldn’t fork out $140 for their family of 4 to access it.
$35/head is a pretty high bar if you compare to per capita total streaming subscriptions across music and movies across all providers for example.
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> Generating an extra $400 per year in value, per employee, isn't that much extra.
I agree, and would add that it’s contributing to inflation in hard assets.
Basically:
* it’s a safe bet that labor will have lower value in 2031 than it has today
* if you have a billion to spend, and you agree, you will be inclined to put your wealth into hard assets, because AI depends on them
In a really abstract way, the world is not responsible for feeding a new class of workers: robots.
And robots consume electricity, water, space, and generate heat.
Which is why those sectors are feeling the affects of supply and demand.
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Most people in the economy do not use Slack. That tool may be most beneficial to those people who stand to lose jobs to AI displacement. Maybe after everyone is pink-slipped for an LLM or AI chatbot tool the total cost to the employer is reduced enough that they are willing to spend part of the money they saved eliminating warm bodies on AI tools and willing to pay a higher per employee price.
I think with a smaller employee pool though it is unlikely that it all evens out without the AI providers holding the users hostage for quarterly profits' sake.
That AI will have to be significantly preferable to the baseline of open models running on cheap third-party inference providers, or even on-prem. This is a bit of a challenge for the big proprietary firms.
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They will pay it but lay off the number of employees needed to balance it out, and just expect the remaining ones to make up for it with their new AI subscriptions.
A lot of iPhone users will be given a subscription via their job. If they still have a job at that point.
This is true though I think even if the employer provides all this on a per employee basis, the number of eligible employees, after everyone who stands to lose a job because of a shift to AI tools, will be low enough that each employee will need to add a lot of value for this to be worth it to an employer so the stated number is probably way too low. Ordinary people may just migrate from Apple products to something that is more affordable or, in the extreme case, walk away from the whole surveillance economy. Those people would not buy into any of this.
Why are they not getting the iPhones paid by employers now?
It could be priced into your appstore purchases like apple 30% cut is and you wouldn't notice.
This is true but unfortunately for Apple I don't buy anything from the app store except for a minimal iCloud subscription for temporary photo storage. I am in the process of unwinding that subscription in favor of local storage and periodic sync. I haven't been diligent about syncing things in the past so I did buy a subscription for photo storage to avoid losing photos. I know that lots of people buy apps for all kinds of things. I'm not one of those people though.
Why you even said you wouldn’t subscribe? It’s not relevant in the slightest.
That's about an extra iPhone every 3-4 years.
$650bb / ($34.72 * 12 months) = 1.56 billion users.
That's far larger than the population of the USA (unclear to me if that 650bb number is global or USA only) but by sheer scale this is assuming that these companies can collect that fee from a global customer base - including users in developing economies, EU, China, etc. and after the middleman fees are accounted for.
The comments in this thread seem to be thinking within the context of 'the poorest in their nation'. This calculation assumes collecting this fee from among 'the poorest in the world'.
Sure, 1.56bb users could also be interpreted as 'the wealthiest 20% of the world'. But the tail is especially long on this curve given how wealth is concentrated in a small percentage of the global population (1% of users have 50% of wealth).
Microsoft, Google, Apple, Amazon, Nvidia, etc have been able to collect large amounts of revenue from a global customer base so I don't think the assumption was that unreasonable.
Obviously, China will protect its homegrown AI industry. Current geopolitics trending towards US decoupling in Europe might slow it. But under the old status quo, US AI would have been rapidly adopted in the EU (and it still might. It depends greatly on how much of the Trump Doctrine outlasts the current administration).
Developing countries eventually adopt new technologies. First they adopted personal computers and became customers of Microsoft, then they adopted the Internet and became customers of Google, they adopted smartphones and became customers of Apple. Eventually they will adopt AI and become customers of someone. The question is whether it will be US tech or Chinese tech.
Personally I would be astonished if LLMs percolating through the global economy doesn’t give a 50bp bump from here on out.
Even if scaling hit a wall, commoditizing what we have now would do it. We have so much scaffolding and organizational overhang with the current models, it’s crazy.
Agreed. Applying the intelligence we already have more broadly will have a huge impact. That's been true for a while now, and it keeps getting more true as models keep getting better.