[Grombobulous]

So good at it that I’m right now in the process of building instead of buying.

Here’s how that plays out in the economy:

- My company spent $50 on my tokens to build this internal tool

- Anthropic spent $XXX to deliver those tokens to me.

- The company I was going to buy the tool from lost $XX,XXX per year that I would have paid them.

I dunno, kind of sounds like the economy just got smaller.

I could usually accept the idea that software getting cheaper generally increases demand for software and expands the economy surrounding it, but I’m not sure if we have precedent for what happens when software becomes positively worthless.

[loeg]

Are you putting the $XX,XXX-50 under your mattress or investing it in something else productive?

[Grombobulous]

I certainly can’t give you a better answer for my company than “it depends” or “I don’t really know.”

The company could just be happy to have better margins and be happy the stock finally went up. It might literally do nothing with them or do something economically unproductive like buy back stock.

What I can tell you with certainty is that we aren’t going to hire anyone else or launch any other product as a result. Our business just isn’t at that level of growth potential.

Perhaps we can surmise that money going to shareholders can grow the economy. They’ve got more money to reinvest in other stuff.

But then again, if everyone can shart out a SaaS app with $50 in tokens, what software companies will they want to invest in?

AI gives me that feeling of “what happens to bakers and butchers when the supermarket gets invented and they decide to sell bread and meat at or below cost?”

[whall6]

This is the right question.

Every company has a list of >WACC IRR projects that it can spend saved money on. If not, it’s a cash cow company that wasn’t growing in the first place and will allow shareholders to use the saved cash for other economically expanding projects.

[mlhpdx]

What companies can expand if the income of consumers is shrinking. This is the scary bit to me — AI crashes and takes the economy with it, or; AI succeeds as promised and people go unemployed and crash the economy.

The only path that isn’t disastrous is threading the needle of “just right” productivity gains. The people in charge aren’t smart enough to give me warm fuzzy feelings on that.

[Grombobulous]

What software companies will economically expand if the price ceiling on software is really low?

[whall6]

Economy != software companies. Maybe there needs to be a capital rotation out of tech? That’s speaking beyond my expertise though (and imo is a little too doomer). Continuing the hypothetical through: Healthcare, industrials, financial services and many other verticals have plenty of growth opportunities.

Otherwise it would probably be the software companies that are the most focused on last-mile details (where AI in my experience has the most trouble). I expect that as consumers are faced with more and more AI slop SaaS they will be increasingly willing and able to pay for quality.

[brendoelfrendo]

Unless that money is being spent on more tokens, it'll probably be used for stock buybacks.

[whall6]

Which enrich existing shareholders who can use that capital to invest in other economically expanding projects.

[RRWagner]

And if the company didn't need $XX,XXX*0.90 (or more) that you would have paid them to further develop their product and stay in business? If that other company now paid their own $50 in tokens? Maybe the overall flow of money in the economy went from $XX,XXX (you) + $XX,XXX (them) + $(not much, AI didn't exist yet) equals or is greater to $50 + $50 + ($xbillions in AI)? Dunno.