If an "AI" company can sell you access to software that will replace a $250k/year software engineer.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer uber has been able to increase prices b/c they pretty much killed off everyone, thank goodness for lyft. it's less clear to me how this will develop in AI … Google seems capable of staying around for the long haul, and certainly people are betting big on Anthropic and OpenAI, will they specialize in some way to find a silo, or will competition lead to someone dominating?
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer and then when there are no active software engineers anymore they'll charge 400k for it
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer and when this happens, all the experienced software engineers would already switch to woodworking and sheep breeding, so there would be no „let’s hire them back”.
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@preinheimer uuuh I might do surge pricing on my consulting hours. This needs a proprietary formula based on weather, caffeine intake, technical debt status of the client project, percentage of time spent in status meetings and moon phase
@tritone @preinheimer surge pricing for meetings is a GOOD idea
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@preinheimer uuuh I might do surge pricing on my consulting hours. This needs a proprietary formula based on weather, caffeine intake, technical debt status of the client project, percentage of time spent in status meetings and moon phase
@tritone @preinheimer WTFs/hr is a timeless metric.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
No, the AI company will charge even more than the salary of the replaced engineer because you also have to account for the financing cost of ripping out the AI dependency from your codebase.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
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@preinheimer uber has been able to increase prices b/c they pretty much killed off everyone, thank goodness for lyft. it's less clear to me how this will develop in AI … Google seems capable of staying around for the long haul, and certainly people are betting big on Anthropic and OpenAI, will they specialize in some way to find a silo, or will competition lead to someone dominating?
@jbigham @preinheimer it's also interesting to ponder that while we may think Uber won because of the user experience, the apps could have happened (and did), without the switch in employment model.
Ultimately the millions in VC money went in to lower prices to kill the private hire industry. Not to create a nice app. Not because the Uber model was better, but to make the Uber model the only option.
VC money established a cartel monopoly. The "tech" element is entirely incidental. -
@spriebsch @preinheimer And the first month for free.
And after you fired your developers and have everything running they will raise the price to 300k/year because they know your devs won't return.
@peter_slwk @spriebsch @preinheimer and LLMs hurt people learning the jobs... Also a form of lock in
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer@phpc.social except, realistically, they will charge more, because you can reduce "people overhead". Also, since they act as SPOS for these products, it will be the greatest form of "collective" bargaining imaginable.
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@adavid @spriebsch @preinheimer And we're still in the early phase of @pluralistic's enshittification cycle with AI.
The likes of Anthropic, OpenAI, Google, and Microsoft are still locking users and businesses into their platforms.
Tokens are being given away for free, even to people who don't want them.
The real rentseeking fun begins once everyone's locked into a platform.
For example, Imagine a world where most businesses run software created using Claude Code completely unchecked.
What's to stop Anthropic from pushing out a future update of Claude Code that routinely generates code that relies on Anthropic's proprietary APIs to work?
What's to stop Microsoft from pushing out a future update of Copilot that only works with customer data stored in Dynamics?
What's to stop Google from pushing out an update to Gemini where all the generated code is exclusively hosted in Google Cloud?
Why, suddenly you're not just paying for an AI tool that costs the equivalent of a developer's salary.
But also, if you ever stop paying the monthly rent, then your access to the proprietary APIs ends and all your software breaks. Or you lose access to your customer records. Or all the code you've ever generated, stored on the affiliated cloud platform, vanishes.
And beyond coding, there's many other ways these platforms could be enshittified for profit.
For example, if millions of people trust LLMs to manage their daily lives, then suddenly making sure AI agents answer a question like "What should I have for lunch today" with "a Big Mac" is worth billions of dollars to McDonald's.
Worst of all, if the cost of building out all the data centres and infrastructure is in the trillions, it limits the market to just a handful of players.
And any online platforms that use their APIs will have to pay an economic rent of their choosing.
I'm sure there's many other ways they're planning to use this to extract profits and build power.
That's why investors are willing to pour trillions into this thing.
It's not because they believe AGI is just around the corner.
It's because they believe that if enough people and businesses get locked in, they get to put a tax on everything.@aj @adavid @spriebsch @preinheimer @pluralistic And just imagine if the jurisdiction where all of these companies happen to be located elect some geriatric demented narcissist pedophile multiply convicted criminal that decides he wants to fuck up your entire economy, for any reason - or no reason at all - and puts economic or technology sanctions on your entire country…
It doesn’t just stop you from building new things, it destroys everything you’ve ever built with the flick of a switch.
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@adavid @spriebsch @preinheimer And we're still in the early phase of @pluralistic's enshittification cycle with AI.
The likes of Anthropic, OpenAI, Google, and Microsoft are still locking users and businesses into their platforms.
Tokens are being given away for free, even to people who don't want them.
The real rentseeking fun begins once everyone's locked into a platform.
For example, Imagine a world where most businesses run software created using Claude Code completely unchecked.
What's to stop Anthropic from pushing out a future update of Claude Code that routinely generates code that relies on Anthropic's proprietary APIs to work?
What's to stop Microsoft from pushing out a future update of Copilot that only works with customer data stored in Dynamics?
What's to stop Google from pushing out an update to Gemini where all the generated code is exclusively hosted in Google Cloud?
Why, suddenly you're not just paying for an AI tool that costs the equivalent of a developer's salary.
But also, if you ever stop paying the monthly rent, then your access to the proprietary APIs ends and all your software breaks. Or you lose access to your customer records. Or all the code you've ever generated, stored on the affiliated cloud platform, vanishes.
And beyond coding, there's many other ways these platforms could be enshittified for profit.
For example, if millions of people trust LLMs to manage their daily lives, then suddenly making sure AI agents answer a question like "What should I have for lunch today" with "a Big Mac" is worth billions of dollars to McDonald's.
Worst of all, if the cost of building out all the data centres and infrastructure is in the trillions, it limits the market to just a handful of players.
And any online platforms that use their APIs will have to pay an economic rent of their choosing.
I'm sure there's many other ways they're planning to use this to extract profits and build power.
That's why investors are willing to pour trillions into this thing.
It's not because they believe AGI is just around the corner.
It's because they believe that if enough people and businesses get locked in, they get to put a tax on everything.@aj @adavid @spriebsch @preinheimer @pluralistic reading this made me consider that softwarr-as-a-service might be optimized so you don't have to (or get to) see the code... just iterate prompts and access the result via their cloud. auto fix/update/cve remediation is all built in to the premium package. Maybe evolving to app/platform/business-as-a-service engulfing customer data, ecom, fulfillment.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer
Konosuke Matsushita -
@jbigham @preinheimer it's also interesting to ponder that while we may think Uber won because of the user experience, the apps could have happened (and did), without the switch in employment model.
Ultimately the millions in VC money went in to lower prices to kill the private hire industry. Not to create a nice app. Not because the Uber model was better, but to make the Uber model the only option.
VC money established a cartel monopoly. The "tech" element is entirely incidental.@tmcfarlane @jbigham I loved Hailo, which offered real taxis with the app experience. I think they had a hard time competing with companies paying below living wage if you calculated wear and tear on your car.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer common scam technique, make the scamee think they're the scammer
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer
was about to mention it will not cost 249k $ but 249999$ - until i came to the last sentence, so yes it really will be 259999$ -
@tmcfarlane @jbigham I loved Hailo, which offered real taxis with the app experience. I think they had a hard time competing with companies paying below living wage if you calculated wear and tear on your car.
@preinheimer @jbigham there were a handful of taxi firms in london that seemed to use an app (I suspect white boxed from Hailo). Most of those now seem to have shifted to the "on-demand" marketplace model (no permanent crew, just putting jobs up on the app).
Taxis are completely awful now. If you book one 2 days in advance, they don't tender the job until 10 mins before your booked time, and more often than not, you don't get a driver on time.
Zero point in booking in advance. -
If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer
You forgot the part where they gradually (or immediately) lock you into their ecosystem so it's exponentially more expensive to revert back to that engineer you fired. -
If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer I tried pointing this out at a local digital meetup group towards the end of last year. I was the only woman in the room, and none of the men there believed this would be the end game when it comes to pricing.
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@preinheimer I tried pointing this out at a local digital meetup group towards the end of last year. I was the only woman in the room, and none of the men there believed this would be the end game when it comes to pricing.
@emkingma ugh. OpenAI will lose 14 billion dollars this year, they’re going to want that money back 100 fold.
Where do people think that money is going to come from?
