alt Hacker News> That is no longer a helpful tool... it costs like ~15% of an actual dev.
The full cost of each employee is more than their salary. The common estimate is 1.4X their salary due to all of the employer-paid taxes, benefits, and other things.
So even $2K/month of token costs would only be around 10% of the cost of a mid-range developer cost.
It doesn't have to increase productivity much to justify the cost.
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The arithmetic is a little different in every country because of local rates of pay and taxation but it's worth remembering that in most of the world except for the richer parts of the US developers do not get paid what those US developers have been making in recent years. There are a few exceptions but the norm is several times less even in major economies in Europe or Asia.
Another challenge for US tech companies is that - if you'll forgive the bluntness - their "brand" is now toxic in most of the world. Almost everyone is trying to distance themselves from US tech as fast as they can. Governments and big businesses are starting to invest seriously in alternative solutions and local resources. It will happen over time but I don't see much the US tech companies or the US government can do to stop the train now the wheels are turning.
So there's a serious risk for US tech companies now of a double whammy where their already relatively high R&D costs increase even further and yet they're also facing much stronger competition in international markets or maybe even excluded from some of those markets entirely.
If we also reach the seemingly inevitable point that "capable enough" LLMs can run locally - or at least as a private resource provided internally by large organisations - there is very little moat left to protect not only US Big Tech whose stocks have been heavily driven by expected returns from AI but the whole US tech industry that is banking on productivity gains from that AI tech. Then they also won't be able to capture most of the entire global supply of components like GPUs/RAM/SSDs because it won't be cost effective any more - and that is one of the few practical moats they have built (however accidentally) that would be a significant barrier to direct competitors setting up shop in places like Europe and Asia.
It's going to be interesting to see how US tech companies respond to these effects over the next 5-10 years. The giants are all aboard the AI train and can't back down now so there will probably be some casualties there if - as again seems inevitable - the bubble bursts at some point. But then there's a very long tail of still very successful US tech companies that might be paying US salaries and using AI-based tools but aren't themselves focussed on developing or providing those AI-based tools and they're the ones who are going to need to find new ways to compete effectively within that kind of time frame.
Don't forget the organisational overhead. You'll need managers and communication overhead between developers grows superlinear (see Brook's law).