alt Hacker NewsEven if the current generation of frontier models becomes 10x cheaper, companies will still end up spending much more per employee than they do today.
Lower prices will not reduce AI spend. They will simply increase usage.
There is no real ceiling on how much companies can delegate to AI. The only limit is the floor where spend too little, and you simply stop being competitive.
My company recently got a ton of AI credits on Linear and they are testing out this feature where whenever an issue is created in linear, it triggers an AI agent to automatically fix the issue. The idea is that when the dev gets to it, he will just check the preview-URL or run unit tests and rubber-stamp the PR.
It is unlikely this kind of agentic workflow will ever get cheaper. Agents get stuck in doom-loops quite often, just burning tokens without any value. Especially by prompts created by people unfamiliar with the codebase.
And it is becoming increasingly obvious that better models just use more tokens (and take longer to execute on prompts). So this kind of human-out-of-the-loop workflows will be forced to use cheaper models and be time-gated in order to not waste tokens. And then they will also produce worse results than a manual change or a more powerful model...
If tokens get cheaper you just put a better model for this kind of problem and let it run for longer.
But what is more insane is that we are using a ton of cloud VM time on top of a ton of tokens just to save a few minutes from a developer doing the same on his machine...
I don't think my company will keep this system once the free credits run out once they realize how much it actually costs.