Corporate America Is Starting to Ration AI as Cost Skyrockets
Executives are scrambling to track returns on AI investments as the bill for massive computing needs comes due
Use of artificial intelligence by big companies is exploding—and the soaring cost has some of them pumping the brakes in a way that could complicate AI’s triumphal march across the economy.
Executives across industries this year have urged employees to integrate AI tools into their work, spending freely to encourage experimentation and seeking to send a message to Wall Street that their companies won’t be left behind in a coming wave of disruption.
All that enthusiasm has resulted in skyrocketing costs for so-called tokens, the basic unit of measurement for AI computing, as AI model providers seek to balance supply and demand and manage their own costs. Some enterprises have hit their annual budget in just three months or reported seeing their AI spending bills double or triple.
Now corporate leaders are scrambling to bring down expenses by finding ways to ration AI use in their organizations, steer workers toward cheaper, homegrown tools and help them hone their skills to improve returns.
Top technical executives at Uber Technologies, Meta Platforms, Microsoft, Salesforce, DoorDash and other companies have all talked about new efforts to ensure AI use contributes to productivity or have taken steps to reduce the availability of some tools for certain employees.
AI critics have pointed to efforts to direct AI spending more carefully as evidence of a warning sign that the ultrafast pace of AI growth could slow.
Just keep in mind that it is an uncharted realm we are moving into. I sure wish capitalism allowed for some time to consider all the implications that come along with this advancement. I fear the deployment will be more difficult than necessary for no other reason than the lust for money, and money’s finite nature.
Money is very useful and not particularly finite (unless you tie it to a fixed amount of gold). There are also non-financial aspects such as national defense.
China is expected to spend north of $125 billion on AI this year, half from the government.
The country will “seize the commanding heights of science and technological development” and seek “decisive breakthroughs in key core technologies”, according to the plan released on Thursday to coincide with the opening session of the National People’s Congress.
Agreed. I suppose the best we could do on the national security facet is to gatekeep our knowledge of blockers we had to work through…but something tells me the Eastern mind will anticipate most of them ahead of time instead of stumbling over each one in turn as we have so far.
ChatGPT has already cut short free sessions with advice to shift to the paid version.
Gemini is still free in unlimited amounts although they have more sophisticated paid versions. So I work with Gemini extensively and then quickly double-check the result with ChatGPT.
China has a plan that isn’t focused on creating super intelligent AGI. They have deliberate efforts to implement AI across their economy and society to improve the lives of their citizens. Maybe I’m oversimplifying, but it seems like our goal in the US is to create AGI and let it loose to see what it can do. And…we have a bunch of social outcast weirdos driving our AI industry, what could go wrong?
No kidding, but let’s not pretend the CCP has altruistic notions with AI as its primary focus. Control is always the priority. Unlike the US, there is no constitution or effective checks and balances that prevent overreach.
The inevitable triumph of the proletarian dictatorship is ever closer as a technological revolution sweeps away the last remnants of humane life — oops, I mean of superstitions and petty privacy.
I’m not pretending, I’m a realist. Just because China is using AI to control its citizens, that doesn’t necessarily mean they don’t have any altruistic goals that will benefit their economy and society.
Our constitution isn’t protecting us from overreach that is currently happening in the US. Checks and balances are only effective when exercised.
My larger point is that China has a plan, the US does not. I suppose there is a large degree of freedom that comes from just winging it…
What good is AI to a company if it creates loses and negative cashflows? The question investors should ask is whether the investment in AI will pay for itself and create profits and cash.
It has a plan but that doesn’t mean it’s a good one. China’s plan is first what best serves the CCP. It will undoubtedly come at cost to human rights and freedoms, it always does. Tech advancement is allowed but only within a box. When it moves beyond its place, billionaires start disappearing.
For the U.S., it may be best to let the private sector develop the capabilities with minimal interference. Govt can then decide how to apply those tools to decision making and other areas. in the end our govt will also use it to stretch the bounds of govt control vs citizen’s rights. The defense will be for the greater good, it always is.
I’m not really much interested in the political aspects of it. We’ve seen several decades of increasing executive overreach. Much of the greatest attempts at censorship of the tech sector came under the last administration, as well as an amped up anti-business movement. Fortunately, while it’s remains in place, our form of Govt has a structure designed to try and keep executive power in check, as all hierarchies tilt towards corruption.
For the most part, the majority of AI development is occurring here rather than in Europe or China for obvious reasons. In the US, the current administration broadly has allowed the private sector to pursue in the AI Field what it wants, whether it’s self serving to current administration, matters little to me. I’ll take that over an overbearing regulatory environment but neither is a perfect choice.
There are costs of an AI free-for-all, just like there are costs for strict regulation. My inner Ralph Nader tells me that corporations will not regulate themselves. That means our leaders must develop common sense regulations that won’t overly burden development.
In my opinion, the idea that all regulations are bad regulations is bonkers.
Like I said, there is no perfect choice. there are costs to either approach, no reasonable person would argue otherwise. You’re making a straw man argument in that respect. I’ve never called for zero regulation, only thoughtful and measure approach. But, Europe, for example has clearly fallen behind and there will be a price to pay for doing so and it has come purely as a result of stifling innovation through the regulatory environment.
Some did, Musk’s original investment in Open AI was to spearhead an effort at a responsible approach, foster transparency and make it available for broad public use. I do think Gov’t intervention needs to be well thought out. Bad corporate behavior tends to never be as long lasting or as broadly reaching as bad regulatory policies. For sure, the farther the decision making is made by those not directly impacted by it or to gain favor with their base, usually the more ineffective the outcome.
