Say I’m a company with 1000 employees. A company like anthropic is offering to replace each employee with some sort of agent. Suppose the agents cost roughly $80k, where an employee costs $100k. I take that deal because it saves real money and replace, say, 500 employees with agents.
Now let’s assume just for the sake of argument that these AI agents do exactly as promised and truly do replace those workers and all of their responsibilities. Things seem great, I decreased my costs a lot and my business is buzzing along.
Now anthropic comes to me and says they’re going to increase their prices to $100k/agent. What now?
Since you’re trading individual employees for a company that’s providing the service at a cost, it’s effectively like these agents are unionized, in a way. They ask for a raise and you don’t comply? Okay fine. No work for you. Nothing you can say or do will get these agents back
Not only that, anthropic can leverage the absolutely insane amount of data they have to squeeze you for everything you’re worth. They probably have actuaries on staff who can figure out the maximum possible amount they can charge you before you leave.
Going to a competitor is easier said than done. There’s a lot of underlying infrastructure with AI that needs to be changed and adjusted to make it work. Each model has its own strengths and weaknesses. So maybe, you go to a competitor and it’s back to 80k/year, but now, code has a 10% higher error rate and you start losing money
idk. it just seems like this desire to get rid of labor entirely can only backfire. This is one way, but there are so many others too.
Duplicated from source: https://www.reddit.com/r/trueantiAI/comments/1wj748w/wouldnt_using_replacing_employees_with_ai/
You go bankrupt, AI company buys you and all your competitors. Other AI companies do the same. Each product includes AI costs like other raw materials. All costs passed down to consumers (which have no money to buy shit coz they were replaced by AI). AI companies just trade between each other in walled gardens.
Business is fine. People are screwed.
I’ve tried to make the same argument understood with cloud services and vendor lock-in generally. It’s crazy how companies find a few percent pay increase for employees onerous, but are perfectly willing to give the life-blood of their services to a vendor who can arbitrarily raise prices down the road. Lots of companies are seeing this already with Broadcom and VMWare
Some other scenarios to consider:
- AI company decides to up the profit by switching your agents to a cheaper, worse model behind the scenes while keeping your costs the same
- AI company deciding that your business is plenty lucrative and now that you’ve onboarded their agents and they know your day to day, what do they need you for? You’re just a shell around their agents. So they cancel the contract, create their own competing business and poach all your customers.
the interesting bit is, 90%+ of ai revenues come from a few big companies, not regular Joes. And i think ai is a way for some companies to just extract every drop of values from other companies, now that people are squeezed dry. So companies turning on each other, which might be fun to watch. It’s the logical next step in capitalism, if you run out of peopleto cheat and rent seek from, there’s plenty of easy corporate victims. Sure at firsst it’s, smaller mom and pop stuff, but no reason not to do it for bigger companies, might even have less overhead. And ai is perfect for that.
Not thinking big or evil enough.
You’re a company with 1000 employees. A company like anthropic is offering to replace each employee with some sort of agent. You accept and let them train models on your processes. They launch a competitor company and put you out of business. End of story.
Or they buy your company up, perhaps after some nice enshittification or their models and terms to devalue your company.
Yes.
This is literally their business plan you are describing.
- Hype AI as the literal second coming of Jesus
- buy all the electronic components on earth. Make it hard to impossible for most people to buy computer hardware for any purpose unless they’re already rich.
- convince enterprise that humans are no longer necessary and that you can just use robots to do all that work and split the same profit between far fewer of you. Middle management and up cum immediately.
- offer your cloud services to everyone who can still afford anything. You watch and profile their every move. No one dares to talk shit about you or you debank them, completely cut off from all modern conveniences. They rent this privilege from you.
- increase prices until you have all the money.‘you now rule the world. The plebs all starve.
Of course it’s psychotic shit but that doesn’t mean they don’t believe it
Wouldn’t replacing employees with AI actually be catastrophic for businesses?
Yup.
For one thing, LLMs can’t replace employees. Not really. Some who have tried (like Uber) have regretted it. (Others have fallen hopelessly into AI psychosis.)
I think there have been several companies that have decided to lay off a bunch of people and used the lie “we replaced them with AI” to spin it in a way that makes their stockholders happy. In fact that might be the majority of companies who are reporting that they’re replacing employees with AI.
But there are definitely other companies that have simply drunk the Kool-Aid as well.
Now anthropic comes to me and says they’re going to increase their prices to $100k/agent. What now?
Price increases is definitely gonna happen, actually. And not just because all the “AI” companies are greedy bastards. All the LLM offerings out there are running at massive losses. They’re trying to get people/clients hooked so they can way increase prices. And they’d have to increase prices a lot to make it actually profitable for them.
Each model has its own strengths…
That’s putting it a little generously for my taste, but yeah.
This is about timelines. In the short-term it’s a win, in the medium-term it’s a threat, in the long-term it’s potentially catastrophic. They need money now.
This sort of scenario assumes that these companies will always be in a stronger position. I don’t think that’s a given. The companies that plundered all data everywhere, torrented what was available, and reluctantly bought what couldn’t be stolen to train their models are being passed on the right by companies that just look to steal or copy their stuff (e.g. China is inferencing the hell out of them). The hostility towards data centers also forces more development away from centralised servers onto local environments. At the same time, stuff is also being released as open source. I think there is a big chance that the big companies and their models today will be mentioned in the first chapter on the history of this technology but will fall by the wayside rather quickly. Their market position is underpinned by a belief that in the future they will be raking in the dough on subscription fees once they get the dirty work of being started here financed, no matter how. That’s a mighty big bet. Not only is a bubble economy a problem, there is no guarantee to protect their “IP.” It’s really like investing in very expensive tulip bulbs.
Also, we don’t fully understand this technology. A lot of the experts don’t either. Anybody who says they’re pretty sure they know where this road will take us in the next five years has ulterior motives.
It’s probably going to be closer to 500$ a month. Going from 100k to 6k is a lot more enticing, even with the eventual price hikes. It’s never going to start so high, they aren’t stupid. Their end goal is to have a blanket AI tax on most businesses and capture a significant part of the economy.
The thing is though, if the company can just give them the finger, build a computer for 5k and run an open model on that, then Anthropic and friends lose their whole business model.
Hence the media campaign, buying supplies like raw wafers, boosting the price of entry with the strengthening of copyright laws and stoking fear to have a government mandated pause, etc.
It’s a shame but the anti-ai movement usually aligns itself with what big AI wants (pro copyright, pro regulation, fear mongering).
But quarterly line must go up! 📈
Also, you are destroying the market: these 500 people will not afford to buy your products anymore and AI will not replace them as customers. Multiply that for every company in the planet: who is going to buy anything anymore?
Billionaires want a mass die off. A ton of less people is easier to manage, use less resources and will have a lots less strength to resist. Whoever is left will be their workers.
Wouldn’t that backfire though? If there are fewer workers, wouldn’t they have more wage negotiation leverage?
It definitely and most likely would. These numpties are surrounded by “yes men” and are constantly enabled by said yes men.
Just a late weekend nights theory babble after being in my cups.
I honestly think the best application for ai would be management
Your scenario is a good point. There’s also another one - that you invest in this company to carry your load and something happens to them, so they don’t raise prices, they stop providing the services. Now, maybe you can quickly switch to someone else, maybe that costs a lot to do and time as well. Maybe it affects all AI companies, and you’re screwed unless you can replace them with humans, probably asking even more than before.
Also another one - the original agents worked well. Then they try to go full Microsoft and do an upgrade which for whatever reason breaks things. Maybe the agents are worse for what you use them for, or maybe it’s just an incompatibility. Either way, damage control again, where if you had stuck with at least some or most of the humans you could weather.
Eggs in one basket. Humans bring diversity, flexibility, and adaptability, even if they cost more.
There is a back-channel that’s not mentioned here.
The executives and directors of these companies all play at the same golf clubs. They know each other.
So, when this happens, they just have a chat at the 19th and the prices are negotiable.
The smaller businesses are the ones that get screwed. Not to mention the ex-employees.
It’s still as stupid as it sounds.
