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cobbzilla | on: I'm not convinced the AI bubble exists
> naively assuming the demand will also grow as technology matures.

I don’t think this is naive at all; it’s quite rational that demand increases as price decreases, which does seem inevitable.

3form | parent | next
Most of the "laws" of economy in this form say often as a footnote "all else being equal", which remains to be seen. Otherwise you can justify any attempts at price decrease in any industry the same way.
catlifeonmars | parent | next
> it’s quite rational that demand increases as price decreases

This is not necessarily wrong, but neither is it right; it is underspecified. Even if we were ignoring other factors and taking into account only the assumptions of a classical economic model, the shape of the demand curve still depends on the size of the market and the price elasticity of demand.

asdff | parent | next
Unless the number of users is already pretty much saturated. Which it probably is if we are honest by this point.
mholm | root | parent | next
I absolutely disagree number of users is saturated. Fortune 500 companies, for all of their 'AI accelerating' shareholder speeches, are doing very little to actually integrate or spend on AI for the average employee. I've talked to a lot of people who work white collar jobs that could absolutely be accelerated by AI, and they just... aren't using it at all. Some of the companies make Copilot available. Some people just copy paste their tasks into the free version of chatGPT and spend a lot of time correcting the dumb model. A lot of orgs are concerned about data leakage and just have a blanket AI ban.

I recently joined a software dev team in which nobody is using any AI at all. They weren't conceptually against it, they just didn't feel the need to change their process.

There's a lot of room to grow.

bluebands | root | parent
Revenue per user is very much not saturated
milosparrow | parent
> I don’t think this is naive at all; it’s quite rational that demand increases as price decreases, which does seem inevitable.

But that's not what OC is saying, isn't it? Frontier models becoming better and cheaper at the same time are not a given.

Near-frontier models that have 99% of the capabilities of frontier models, at a tenth of the cost of frontier models, might ironically be what pops the bubble.

bluebands | root | parent | next
1. What you want changes as the market does, in the way people use agentic coding now rather than just cheaper versions of Cursor autocomplete 2. Frontier labs are cheaper than open-source models too
cobbzilla | root | parent | next
CPUs (and a million other things) got better and cheaper with time, I see no reason that AI would be any different.

The distinction between frontier/non-frontier models doesn’t matter much here, for the overall market. With CPUs, for example, Pentiums got better and cheaper while Cyrix/AMD did the same.

milosparrow | root | parent
The real question is not if the technology is going to get better and cheaper, but rather if it's going to meet the market expectations to justify trillions of USD in valuation.
Schiendelman | root | parent
Is there seriously a non-frontier model out there that can do what Opus 5.5 does? I can say: go look at a ticket in Jira and figure out how to fix it, write end to end tests for it, make sure it aligns with previous architectural decisions we've recorded in documents, and then test it, summarize all the testing you did, and open up a PR for review?
Madmallard | root | parent
Yeah Opus 5.5 doesn't do that either a lot of the time you have to review it yourself or you're a moron.
curt15 | root | parent
Anthropic, for one, doesn't seem to be replacing their human engineers and data scientists with Opus 5.5 yet even when they would be better positioned to do so than any other company. https://www.anthropic.com/careers/jobs
wooger | root | parent
But they're all using Claude (with unlimited tokens) every day, multiplying their effectiveness for sure over what even the best coders can produce.
knottn | root | parent | next
A 10x will always be beat by 10x+ai. But ai+10x is better than just ai. The world has an over supply of ai (or soon will) but a finite number of 10x coders.
Madmallard | root | parent
This is satire, right?