British workers are spending close to £1 billion a year from their own pockets on generative AI (GenAI) tools they use for work, according to major new research from Deloitte UK.
I wasn’t really disputing the numbers per se (although I do actually find it hard to believe 17% of workers pay for AI subscriptions…) but more wondering about, given that their combined revenues are somewhere around 50 billion USD, what the consequences of such a large fraction of that coming from heavily subsidised consumer use would be.
Yeah, the business model is not sustainable. They’re playing with funny money for now. There are only a few ways for them to make real money: raise prices a ton, scale back model sizes, and focus on government/military contracts (i.e. steal from taxpayers).
Oh, and enshittify. Enshittify like no one’s ever enshittified before.
They’re already starting, on all fronts.
OpenAI is raising prices like mad this year, and imposing stricter usage limits. They just basically cut the value of their $200/month plan in half while introducing a new $500/month plan. API costs also doubled for some models back in May.
Recently there was an article saying how AI costs are falling by 13x per year: https://archive.is/U0Fju . So as time goes on, they’ll likely be able to offer “similar” levels of performance for drastically lower costs, and just pocket the difference.
Today’s smaller models compare favorably with the biggest models from 2-3 years ago. ChatGPT 3.5 was a “big deal” in 2024, and now you can run a model that performs better on a decent laptop or even a high-end smartphone, basically for free. Small open models keep improving at a steady rate.
They’re indirectly jacking up prices of electronics so much that consumer-level hardware is basically frozen in time, and in some cases even regressing. Look at Microsoft re-introducing 8GB Surface laptops after spending so much marketing money telling people they had to go up to a minimum of 16GB. If I re-built my PC today with the same specs, it would cost about double what I paid a few years ago. So maybe people actually won’t be able to run anything on their own hardware in the near future. Like Uber and AirBNB and Amazon before them, they could start to look comparatively better than the alternatives by destroying the entire fucking market around them. I don’t know how long that will hold though. It can’t stay like this forever…right? Right?!?
I wasn’t really disputing the numbers per se (although I do actually find it hard to believe 17% of workers pay for AI subscriptions…) but more wondering about, given that their combined revenues are somewhere around 50 billion USD, what the consequences of such a large fraction of that coming from heavily subsidised consumer use would be.
Yeah, the business model is not sustainable. They’re playing with funny money for now. There are only a few ways for them to make real money: raise prices a ton, scale back model sizes, and focus on government/military contracts (i.e. steal from taxpayers).
Oh, and enshittify. Enshittify like no one’s ever enshittified before.
They’re already starting, on all fronts.
OpenAI is raising prices like mad this year, and imposing stricter usage limits. They just basically cut the value of their $200/month plan in half while introducing a new $500/month plan. API costs also doubled for some models back in May.
Recently there was an article saying how AI costs are falling by 13x per year: https://archive.is/U0Fju . So as time goes on, they’ll likely be able to offer “similar” levels of performance for drastically lower costs, and just pocket the difference.
Today’s smaller models compare favorably with the biggest models from 2-3 years ago. ChatGPT 3.5 was a “big deal” in 2024, and now you can run a model that performs better on a decent laptop or even a high-end smartphone, basically for free. Small open models keep improving at a steady rate.
They’re indirectly jacking up prices of electronics so much that consumer-level hardware is basically frozen in time, and in some cases even regressing. Look at Microsoft re-introducing 8GB Surface laptops after spending so much marketing money telling people they had to go up to a minimum of 16GB. If I re-built my PC today with the same specs, it would cost about double what I paid a few years ago. So maybe people actually won’t be able to run anything on their own hardware in the near future. Like Uber and AirBNB and Amazon before them, they could start to look comparatively better than the alternatives by destroying the entire fucking market around them. I don’t know how long that will hold though. It can’t stay like this forever…right? Right?!?