Comment by dkdcdev
2 days ago
at their scale they could also just run a large on-premise or rented (basically still cloud, but cheaper) GPU cluster and run through that. fixed costs, even license a SOTA model’s weights if you’d like
2 days ago
at their scale they could also just run a large on-premise or rented (basically still cloud, but cheaper) GPU cluster and run through that. fixed costs, even license a SOTA model’s weights if you’d like
The problem isn't really Uber, Microsoft or Nvidia, it's all the smaller none IT companies that also have developers on staff. They are screwed. $1500 per seat per month is just way to expensive, but they also can't afford to build and maintain their own on-premise solution. If Microsoft can't afford to run CoPilot for their own developer, what chance does any of their customers stand?
If the large, well founded IT companies in the world believes the current AI cost is to high, then Anthropic, OpenAI and CoPilot have no actual customer base. AI is then relegated to very profitable niche business, but that can't fund the R&D for the models.
It's an extra 18k a year for developer tools when they're paying how much a year per developer? Having software developers at all isn't cheap.
Also, I don't believe you need to spend $1500 a month on a coding agent if you optimize usage at all.
In Latvia, the net salary for a Java dev is around 1729 - 4314 EUR, based on https://www.algas.lv/algu-informacija/informacijas-tehnologi... (crowd sourced data)
For the employer those employees cost between 2945 - 7736 EUR per month based on https://kalkulatori.lv/lv/algas-kalkulators (income and social taxes).
So on the lower end that's (1500 USD ~ 1300 EUR) close to half the total expenses of such a developer, on the high end here around 15-20%. That's quite significant, depends on whether their productivity also improves (if that's what the orgs care about).
And we’re not even the country with the worst pay out there, but pay the same for tokens, cause regional pricing isn’t a thing!
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$18k a year is a non starter in most companies. Ive seen companies balk at Intellij.
That depends on where you are. $18K is the equivalent of paying around 15% more for your developer.
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There's models for every price point. What was SOTA and stupid expensive to run a year ago is a cheap flash model today.
Why are smaller non-IT companies "screwed" because they can't pay out the nose for their developers' AI usage? They're non-IT companies, developers are presumably not on their critical path, or not their bottleneck. Developers can keep on writing code the old way, or doing it with a more reasonable AI spend. I don't see how this "screws" any company.
That was badly worded on my part, my intend was to indicate that there was no way they can or will pay $1500 per month per seat.
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> even license a SOTA model’s weights if you’d like
Yeah, I bet all labs releasing SOTA models are more than happy to remove the main way they make money and let you run it locally, especially if you're a big spender like Uber who seems very willing to throw money into the sea as an experiment.
That's going to stop eventually, and I think at that point we're going to see business models more like the major CAD providers.
I don't think they'll have a choice, open weights models are not far behind. At some point it's essentially a commodity game
they also already do this…
Anthropic and OpenAI license to the public clouds. Google reportedly licenses to Apple. licensing to Fortune 100 companies running on their own infra is an obvious next step
it is a race to the bottom and I’m not sure the labs win that race. we’ll see!
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