AI Doesn't Have ROI

cmiles8

Companies are slamming the brakes on AI in a massive reversal that’s unlike anything I’ve seen in the last 25 years in tech. 6 months ago it was use AI all the time go! Now companies are putting use limitations in place, strict budget controls, and the wagons are circling around various “AI labs” teams that cost a ton and have shown little to no ROI. It was all fun and games until the bill arrived. Now it seems there’s a mad rush for AI companies to IPO before the music truly stops.

vanuatu

I've seen many cases where AI led to ROI with high margins (maybe not enough to justify the entire industry capex though), but they usually share similar features - AI is a component of a larger product sold - The product improves the metrics that customers care about, typically autonomously - The customer is paying for the outcome, regardless of whether or not the product had AI in it 'Copilot' style AI features are much harder to measure ROI on, because they are typically further away from the base metrics that make it easy to measure ROI, and are typically used for specific tasks in a long web of other tasks within a professional job

stevenjgarner

Yes it does - the ROI is replacing the global labor market => the replaced workers stop earning income. They cut spending. The businesses they used to patronize see revenue decline => the company that fired its workers to save money discovers that its customers were, in aggregate, other companies’ workers. Revenue growth stalls => dead economy [1] [1] https://news.ycombinator.com/item?id=48324712

Ratelman

I've seen legitimately good outcomes with AI - a backlog has been cleared, features that were left on the cutting room floor have been pulled back in AND delivered all thanks to the use of AI coding tools. AI workflows have brought down processes from weeks of human processing to a couple of minutes with human oversight - and the revenue that it unlocks more than covers the AI bill. This is within a large corporate company - the "No such story exists for AI" feels overplayed. Sure, the wave of (quoting the article) "braindead executives, imbeciles and middle management hall monitors that don’t do any real work" might be bigger than with previous hype cycles because AI as a tool does enable pseudo-intellectualism, but the article overstates its case. I know, 1 counterpoint doesn't make a strong argument - but there's no reason the way we're applying this as a tool can't provide the same gains within other organisations - am I missing something/being delusional/huffing copium?

paxiongmap

I'd probably characterise it as more as "AI doesn't have the massively transformational ROI that all the AI salespeople said it would and now I have to pay for my tokens and the humans I though I could replace at the same time". The idea AI would be running whole companies below some weird godlike CEO who won because they were clever just pushed an attractive narrative for the investor class. I am very bullish on AI as a tool, but not as a way to completely restructure the economy overnight. Doing things is hard, and better tools don't make fundamental problems about change go away. I read this today which really resonated and is relevant: https://deadsimpletech.com/blog/attack-on-competence

_aavaa_

> AI is more expensive today than it was three years ago, and it is not getting cheaper. Sam Altman’s comments about “intelligence too cheap to meter” were lies. NVIDIA’s Blackwell GPUs didn’t make it cheaper, and its Vera Rubin GPUs won’t either. Google’s TPUs won’t do it, Amazon’s Trainium or Inferentia chips won’t do it, Vera Rubin CPUs won’t do it, OpenAI’s chips won’t do it, and no, DeepSeek won’t do it either. Has this man ever heard of Jevon’s paradox? Also all of these claims are objectively wrong today because the goal posts for what AI have been moving this whole time. The models we have today do more, are faster, smaller, and cost less than what was available 3 years ago.

mgh2

related: https://news.ycombinator.com/item?id=48243863

axegon_

Brilliant article. This is something I've been thinking about for a while. Up until around 2020 I used to work at a company that lived off of games and the economy was, you guessed it, micro-payments. I was the one in charge for developing the system that allowed the people in charge of monetization to configure the games based on your skill to squeeze the most out of you. Suffice to say, it worked great. Fundamentally the business model for all games was identical: cash for virtual currency. Here's the catch: you never knew if spending 50 bucks would make a big difference and you had no way to measure it. In a nutshell, it almost made a difference but just not enough so your brain would go "well what the hell, here's another 50" (classic sunk cost fallacy). And the business knew that and actively exploited it. All the AI slop that is happening now is the evolution of the same thing: exchange cash for virtual currency(tokens) in exchange for immeasurable results and the inevitable "just a few more tokens". Congratulations, you've been played.

zelias

I agree with Ed, but am curious if these massive data centers would instead get used to mine cryptocurrency after a crash. Not that I think that they _should_, that's all a farce as well, but it is something I could see others trying to use these data centers for.

WarmWash

The author conveniently (or perhaps wasn't even aware) left out this quote from Uber's CFO "What we have done is we have tempered the pace of hiring, and we -- and this is broadly across the company, but specifically from an engineering standpoint -- the hiring ramp we have for the remainder of the year is significantly lower than what we thought it would be when we came into this year." Uber's response looks to be cutting the number of engineers that generate tokens, not to cut the AI that is generating them. These headlines about Uber are not the victory people are portraying it to be.

josefritzishere

My office is tapping the brakes on AI. The ROI is just not there.

matltc

One can (maybe, probably) disable copilot completely in vscode: chat.disableAIFeatures https://github.com/microsoft/vscode/issues/309947 I am considering pinning whatever the earliest version in which this setting was introduced. I can't think of a single feature VSCode has implemented in the last three years that I couldn't go without. The binary for 121 is like 50% larger than 120.

KevinMS

Please, flagging posts, and downvoting comments, you disagree with is not how we do things around here.