Speaking during an interview on CNBC’s “Squawk on the Street” segment earlier this week, CEO of cybersecurity giant Palo Alto Networks Nikesh Arora implored the tech industry to lower the cost of AI.
During the segment, the chief executive argued that the cost to use large language models (LLMs) has to drop by 20 percent by 2027 — and 90 percent by 2028 — for the tech to be useful to enterprises.
“We need to see the pricing for AI come down,” Arora said.
He thinks AI is expensive NOW? We are in the trial period. Wait until the whole thing pops and then tell us how expensive it is.
“YOU lower YOUR profits so I can increase MY profits!”
You assume AI companies are making a profit. None of them are.
It’s very common in the tech industry for expenses to exceed revenues in the first years. Look at Amazon way back. That’s only one of the most famous examples. The difference between revenues and expenses is what I call a profit, regardless of whether that number is positive or negative.
Edit: Hey downvoters: I’m not the one who built the Amazon story, nor accounting. Sorry to be the one to break it to you but you can pour your bitterness elsewhere: https://en.wikipedia.org/wiki/Profit_(accounting)
“We need to see the pricing for AI come down,” Arora said.
As a CEO, you really should know that prices never come down. Prices only go up. Gotta generate that shareholder value.
But I’m a client!
So AI is losing money hand over fist, and the solution is for AI to lose even more money? Thank god our economy is on a sound footing.
The irony in this makes me happy.
- Replace workers with AI
- AI costs money
- CEOs demand lower costs for AI, so their decision to replace workers with AI doesn’t backfire…
Capitalism VS Capitalism
Who’s gonna win? Who knows!
Who’s gonna ultimately lose? Well, who gives a fuck, as long as they winnnn!
fuck him and not in a good way
I really, really hope that within 1 or 2 years there will be a chain of collapses of companies which adopted this shit.
People in those companies economies (and others globally to a lesser extent) will feel the economic fallout from that in one form or another
Those companies fired the workers and replaced them with AI already, so the benefit they bring to the broader economy is far smaller (might even be negative by now) and them dissapearing is far less likely to cause “economic fallout”.
Even though that’s what Neoliberal politicians have preached to us for decades now, companies aren’t inherently “good for the Economy” - they might, but then again they might not.
Plenty of companies out there add up to a negative to the Economy:
- Maybe because they have huge Negative Externalities (i.e. for example, emitting lots of Pollution)
- Maybe because they abuse dominant positions in Markets due to Barriers to Entry in a way that makes things actually worse for most people (reference: enshittification)
- Maybe because they’re mostly extracting wealth from the broader Economy through rentseeking rather than producing wealth (reference: most realestate investors)
- Maybe because they’re actually extrating more from the Economy than they put back in it (for example companies getting billions in subsidies to create literally a handful of jobs, or companies employing people with such low salaries that it’s only possible because said people also receive Social Security support)
- Maybe because almost all the wealth they produce does not end up in that Economy (for example, they’re using Tax Havens to avoid taxes and their owners pay tax abroad or even don’t pay any tax at all)
Companies aren’t there to benefit the Economy in any way form or shape, they’re there to benefit their owners. Some companies might happen to benefit the Economy, often because they have no other option (for example, they’re forced to employ people in order to actually operate and make money for the company owners, thus indirectly help the Economy) but almost invariably every single thing that helps the Economy is for a company “losing money” which would go to the company owners instead so they generally fight like crazy to actually reduce it: they try to spend less from suppliers, pay less to workers, pay less or no tax at all.
Helping the Economy almost always runs counter the one true goal for the existence of a company - maximizing shareholder profits.
Further, when a company dissapears it doesn’t mean that the Market need that they’re serving dissapears with them: in almost all the cases the need is still there after they’ve collapsed (unless they collapsed because the need itself doesn’t exist anymore) so existing companies grow or new companies pop-up to serve it.
It seems to me that companies that have replaced workers with AI are by far the most likely to by now not actually be helping the Economy, not even indirectly, and that their dissapearance might actually improve the Economy if only because their share of the Market might be taken over by companies with better far better and less wasteful management (and hence more efficient) and which employ more people, and hence which bring more benefits to the broader Economy.
I don’t disagree with any of you’re points. I guess I was more getting at the idea of the seemingly more ever present AI bubble collapse (which I am very much in favour of) will come with some pretty serious down sides for ordinary people (which I’d like to clarify is the fault of the AI industry at large).
I guess I get a bit puzzled when people cheer on the popping of said bubble because I can’t see good things happening.
Economically, the “AI” to where most investment money went to - LLMs - has turned out to be one big value destroying ponzi scheme, hence removing it from the Economy will in overall improve the Economy because things are actually more efficiently done without it than with it.
The area were LLMs shine is entertainement, and in overall Economic terms entertainment can be a good thing or a bad thing - on one side it’s a use of time that is not economically productive when said time could instead have been used for productive activities, on the other hand it can indirectly boost other Economic activities because humans work better when they’re more relaxed and satisfied. From a lot of what we’re seeing, LLMs not only are misused to do work whilst in fact being entertainment (for example, CEOs using LLMs for “research” because it’s the ultimate “Bootlicker Yes man” even though its highly unreliable as a research tool, thus leading to a higher rate of bad management decisions) but it also seems to reduce independent thinking capabilities of its regular users.
The second biggest sink of investment money in what is now called “AI” is Generative AI. This comes with job losses and a fall in quality (but it’s in areas which don’t directly create wealth, hence the Economic impact of that loss in quality is lower). Ultimatelly, the reversion of this area of “AI” being “good for the Economy” or “bad for the Economy” boils down to what one thinks is a “good Economy” - if one sees inherent Economic value in Art for itself, then a fall in the quality of Art and a reduction in the capabilty of producing trully novel Art (which AIs can’t do since their models make the initial random noise which is the basis of their output coalesce towards what’s statistically closest to that which they have been fed, which by definition must already exist), then a reversion in the use of Generative AI would be an undoubtoubly good thing, otherwise it really depends on the Economic impact of the job losses due to Generative AI versus the gains in speed of production (though with a lowering in quality) of using Generative AI.
As for the rest, yeah, there is a ton of what’s called “AI” - let’s just use the old terms for it, Machine Learning, aka ML - which does create Economic value which wasn’t being created before and if it was lost then there would be a loss of overall Economic value.
This latest kind has by far received the least amount of investment money in this bubble, so this bubble popping and reversing would have very little Economic impact via this pathway.
Anyway, my point is that, as time went by and as the limits and capabilities of the Technology were discovered, it turned out most of the investment money into “AI” went into malinvestments which destroy overall Economic value (but can make a few people extremelly rich, hence why the money went there since they each economic actor only care about themselves, not about the whole Economy), and structural economic shifts to support said mainvestment just spread those economic malallocation further into the broader Economy. This “AI” economic tissue is akin to a cancer in an otherwise healthy body - a self-propagating bad mutation that extracts nourisment from the rest of the body, expanding to extract ever more nourisment whilst destroying the healthy parts - so excising it in it’s totallity is not just a good thing but actually a requirement to restore a healthy Economy, and we should not fall into the trap of simplistically thinking of it as “part of the body” when in reality it’s a previously healthy part of the body which underwent a carcinogenic mutation that turned it into a parasite that will eventually kill its host.
In simple terms, the harm and hence the damage is already done, and stopping and excissing it from the Economy now would not be the “harming of the Economy” (because that’s already done), it would actually be the damage control necessary to save the Economy from suffocating due to excessive malallocation of resources.
Layoffs. Massive layoffs. C suite will get massive bonuses to celebrate.
How do I benefit from a massive corporation making a lot of money for shareholders when I don’t have any shares and don’t work there because they already replaced all of us with AI?
You won’t, that’s my point. The shitty system that we live in means that when a ton of companies crash at the same time ordinary people feel the negative economic effects. This what I meant as fallout.
How? What positive effect were they providing in the first place that I would lose.
They weren’t providing any. But the share price on the US stock exchange for most of the big AI companies have been inflated through shoddy business practices, but they make up for an insane amount of the current trading of said stock market. When the bubble bursts and the market loses confidence the economy will contract and we hit recession or even worse depression. Much like the dot-com bubble or the financial crisis.
Wasn’t that companies that hired people though, rather than bot farms
“We are dangerously close to needing to consider the idea of near record profits as opposed to record profits… This is like 9/11 + that flood in the bible + when your Wi-Fi doesn’t fully go out, but it’s on/off again all day and it’s like torture, you know?”
AI: “The best I can do is offer you a substandard “worker”, but it’ll cost you more.”
They can’t.
Foreal
Help a bro out to fire his employees so he can be a billionaire.
Wait, the brain-dead tactics of “fire humans, use llms” is proving to be more costly than “ignore llms”? Wow, what a surprise
The plan has always been scamming business owners to be dependent on them then raise the price
Agree. Pretty damn obvious that
Prices for services like this do not ever decrease. By 2028, costs will likely be double what they are now.
More than that. At the current discount prices, LLM providers bleed money like mad. They will run out of cash soon if they don’t raise the prices to profitable levels. Just double won’t cover it.
Which will lead to most customers dropping the LLM services stat. Which in turn will force the LLM providers to up their prices even more…
When my last employer opened up a publicly available chatbot they asked us not to test it because of how much it costs. It was a sales bot, we had recently had the company decimated by redundancies.
A common act of protest was to abuse the public chatbot from a non work device.
The last 50 years has shown that the new model is to get a sector of the economy or consumers dependent on a service then once the competition has faded away, jack up the price. Competition either never shows up or collaborates on pricing.
Depends entirely on whether or not Moore’s law has hit a physical limit yet.
If we’re still doubling computational every X years for the same cost, we’d be able to see same models cheaper. If we’re however finally hitting physical limits, then yeah. It won’t be cheaper and we can’t just smash more context in it like there’s no tomorrow.
Then the most likely breakthrough would have to be DNA storage (tri point storage, rather than bi point storage) and then we’d need fast read/write to DNA storage. As that’d theoretically allow for more context for the LLMs, context is the biggest bottleneck
Moore’s law has been dead for more than a decade by now
Sort of, we still get improvements but they are a fraction of what they used to be
This is if Chinese isn’t capable of replacing graphic cards.
Ha! Wait until they charge the actual costs and profits! You wish you had not kicked out you most valuable employees…
Here’s hoping at least some of those laid off band together and start non-AI competitors that blow their former employers out of the water…
Not even once did he think whether it was useful or not. We really need to replace CEOs, managers, and the whole C-suite with LLMs, that would be useful for once! And at $20/month, it’s a bargain and you can redistribute the money to people who really work.
Nah. Ai also trained on ceo actions, so I’d say it would result in eviler mecha ceo driving the ship drunker than usual
We don’t train then on ceo actions. We train them to run a company for the betterment of society, it’s people, the employees and its survival.
That requires making decisions, which LLMs can’t do. They can only emulate decision-making
I thin you overestimate the value of CEOs.
Not really, we’re talking about running companies for the betterment of society, which CEOs don’t do, so it’s not implied that they would be capable of the thing that I mentioned would be required to do that
Also, they do make decisions. Almost exclusively bad decisions, because they’re out of touch with the real world and the lived experiences of ordinary people, and they don’t care about right and wrong, and their only concern is “line go up.” But even bad decisions are still decisions.
LLMs literally cannot make decisions, good or bad, because that’s fundamentally not a capability it possesses. If you ask it to make a decision it will hallucinate something based on any irrelevant details it finds in its context window. It can’t perform cognitive reasoning, or weigh pros and cons, or consider secondary and tertiary effects.
Woosh
You need actual examples of a company working for the betterment of society to train the AI though.
So use the workers, not the ceo. We 're firing all those bad employees.
If they were actually firing bad employees then they would start with the executives. The whole AI thing is largely a reflection of what executives think work is, where you just need to prompt your employees better to get better results
I always think that’s the reason of AI overconfidence.
Look at it this way: if AI was my boss, got a lots of things kinda wrong and some things totally wrong, I’d just ignore the bs and do my job the way things actually work.
So from employee perspective, CEOs are easy to replace because they just assign work to be done. Because that’s the easy part and if you give wrong instructions, someone with actual intelligence and actual hands would eventually do it right.
Flip the coin, and get someone that knows their stuff and let them assign work to incompetent people and or AI, and what do you get? Slop.
That’s what I said/meant.
But if we train them on the average co-op you’ll get drama instead :/
He sort of did with executive double speak: he said two things by implying the cost wasn’t worth it. To justify the poor quality the price has to drop by 90%. That’s shareholder speak for “this is not profitable and not worth the debt exposure”.
Just drop the price by 90% in a year and a half while already hemorrhaging money, no biggie. haha.
If these stupid fucks didn’t have the ability to affect my life this would be so, so funny. It’s still pretty funny even so.
Isn’t it gallows’ humour at some point? Shit’s fucked, have a laugh at it if nothing else.
I’ll watch their world burn from the safety of my illegal homeless camp.
