I am no AI fan, but I do not see this going away. I think if you can get enough people addicted, they will pay costs if the costs seem nominal at first.
If someone can’t write well and has an upcoming deadline for an essay or needs to write an important document, they might use a one-time fee. If someone uses it for day-to-day decision making, they will certainly do a subscription if it seems cheap at first. And once you have those people expecting to pay, the price keeps increasing every couple of years.
Example a - Facebook. Rolled out as an entirely free service and enrolled billions of members. Now enough people pay for extras in things as stupid as Candy Crush that they can tack millions onto their revenue for nearly no benefit provider. If enough people pay $1 for something stupid, it pays off
Example b - Prime streaming services. It was a free tack-on to people with Prime memberships. So people bought Fire sticks and use it as a home base. And now they are so cemented into the system and don’t know how to use an alternative so they will pay for 1) extra apps that will show the program they want, which will pay Amazon a fee and 2) pay extra for no ads now that they are addicted
I also have no doubt that advertising can be baked into AI. Just wait until it writes a pathology report and recommends a certain brand name medication, or gives someone a to-do list for hosting a Christmas party with specific brands and desired trends listed.
As for video generation, I think you have a small enough pool that does this anyway, and this will increasingly be consolidated by price towards a handful of powerful individuals who want to sway public influence.
You and I may not pay for it, but have no doubt you can get similar adoption to streaming services and you can get people to pay for anything if it feels cheap enough to be nothing money. I’ve become a cynical old fart and I’ve watched this song and dance too many times.
I think the price point is where your theory falls apart. The AI companies are spending far more than Netflix and they will need to charge more than the average family can afford in order to turn a profit. (Especially in the US where people are struggling to pay for gas and groceries right now.)
Take a look at the new token-based business services. People are blowing through their monthly allotment in a couple of days doing the same things they had been doing previously. Businesses won’t be able to afford increasing their AI spending by 10x to keep up.
I think it will have to consolidate down to a few players - I certainly don’t expect that there is a market for 100 different systems. And I think the personal market is a supplement to the executive suite market, so getting a few people addicted for cheap both brings in a small revenue stream and dumbs a population down enough that they have no choice but to function without it (imagine telling someone in 2001 that they would one day pay $1700 for a cell phone - now it’s just considered the cost of living)
The businesses who overdid it on tokens have a choice to make: hire back workers or switch to a different AI company. Maybe one day they will look at humans (although salary may have to increase due to negative reputation), but I think there are a good number that will just shop around to another AI company for a better deal.
There’s just no way to pay for the cost of these services, though.
When someone constructs a 100 MW data center (now considered a smaller one for new construction), that’s about $2 billion in total costs to outfit the whole operation. And then once it’s on, we’re talking something like $10-20 million/month in electricity alone, and a few million in other costs. How many $20 subscriptions do you need to sell just to break even with your operating expenses? How many $100/month subscriptions do you need to sell to make a dent on your interest payments on the construction? Will there be a market for $1000/month subscriptions from millions of customers? If not, how’s this all going to be paid for?
I am no AI fan, but I do not see this going away. I think if you can get enough people addicted, they will pay costs if the costs seem nominal at first.
If someone can’t write well and has an upcoming deadline for an essay or needs to write an important document, they might use a one-time fee. If someone uses it for day-to-day decision making, they will certainly do a subscription if it seems cheap at first. And once you have those people expecting to pay, the price keeps increasing every couple of years.
Example a - Facebook. Rolled out as an entirely free service and enrolled billions of members. Now enough people pay for extras in things as stupid as Candy Crush that they can tack millions onto their revenue for nearly no benefit provider. If enough people pay $1 for something stupid, it pays off
Example b - Prime streaming services. It was a free tack-on to people with Prime memberships. So people bought Fire sticks and use it as a home base. And now they are so cemented into the system and don’t know how to use an alternative so they will pay for 1) extra apps that will show the program they want, which will pay Amazon a fee and 2) pay extra for no ads now that they are addicted
I also have no doubt that advertising can be baked into AI. Just wait until it writes a pathology report and recommends a certain brand name medication, or gives someone a to-do list for hosting a Christmas party with specific brands and desired trends listed.
As for video generation, I think you have a small enough pool that does this anyway, and this will increasingly be consolidated by price towards a handful of powerful individuals who want to sway public influence.
You and I may not pay for it, but have no doubt you can get similar adoption to streaming services and you can get people to pay for anything if it feels cheap enough to be nothing money. I’ve become a cynical old fart and I’ve watched this song and dance too many times.
I think the price point is where your theory falls apart. The AI companies are spending far more than Netflix and they will need to charge more than the average family can afford in order to turn a profit. (Especially in the US where people are struggling to pay for gas and groceries right now.)
Take a look at the new token-based business services. People are blowing through their monthly allotment in a couple of days doing the same things they had been doing previously. Businesses won’t be able to afford increasing their AI spending by 10x to keep up.
I think it will have to consolidate down to a few players - I certainly don’t expect that there is a market for 100 different systems. And I think the personal market is a supplement to the executive suite market, so getting a few people addicted for cheap both brings in a small revenue stream and dumbs a population down enough that they have no choice but to function without it (imagine telling someone in 2001 that they would one day pay $1700 for a cell phone - now it’s just considered the cost of living)
The businesses who overdid it on tokens have a choice to make: hire back workers or switch to a different AI company. Maybe one day they will look at humans (although salary may have to increase due to negative reputation), but I think there are a good number that will just shop around to another AI company for a better deal.
There’s just no way to pay for the cost of these services, though.
When someone constructs a 100 MW data center (now considered a smaller one for new construction), that’s about $2 billion in total costs to outfit the whole operation. And then once it’s on, we’re talking something like $10-20 million/month in electricity alone, and a few million in other costs. How many $20 subscriptions do you need to sell just to break even with your operating expenses? How many $100/month subscriptions do you need to sell to make a dent on your interest payments on the construction? Will there be a market for $1000/month subscriptions from millions of customers? If not, how’s this all going to be paid for?
You may be right (I hope you are). Do you think government funding would offset this?
They would raid pensions before asking congress