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 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