If AI makes you twice as productive, and there’s fewer taxes on spending money for tokens than there is for spending money on salaries, the rational amount for a corporation to spend on it is more than a human’s entire salary, per person working with it.
Naively assuming corporations approximate rational actors, and AI does measurably improve productivity, this implies a gain of roughly 2% if these employees are earning federal minimum wage, or well below 1% if they earn average software developer wages.
Maybe their contract deliverables are poorly suited to this use case or something, but if they are given a fixed amount of money to produce some software item, then it makes sense to prioritize productivity per dollar.
@prime_number_314159
Maybe their business model does not depend on productivity. If the rate they charge for a developer with AI and without AI is approximately the same, they rather sell two people than making one more productive.
@FirmDistribution
“You must use AI!”
“No, no, no, no….not like that!”
Just trying to shoehorn profit into a system that was never going to deliver one in the first place.
Why even bother at all? What can you do with those tokens? Ask for the weather twice?
The Haiku 5.5 model is actually quite inexpensive. I’ve used it to implement multiple features this month and have only spent $4 of my $20 monthly budget.
The legacy code I’m managing is a clusterfuck of the highest order. Even Sonnet struggles to analyze it sometimes 😑
I’m happy this is only a small part of my job, but oh my…
Are you using api or subscription?
Technically neither - I use it via Microsoft Co-pilot subscription, and it’s a la carte for model usage from every provider.
I didn’t realize the business plans were token metered differently from the Pro plan I’ve been on for a while. $20/month, and it has session/weekly limits, but I rarely hit them, and I use it, a lot.
I do wonder if this will encourage businesses to branch out into running local models for simpler tasks.
The $29 figure is doing a lot of quiet work in this story, because that’s exactly what a Pro plan costs. So the real message isn’t really a budget cap, it’s ‘stop expensing API tokens and expense a subscription instead’. I’d bet a chunk of that $1,000 spend was people wiring API access into internal tooling and prototypes, which feels productive right up until finance sees the invoice and has no idea what any of it maps to. The part that’ll actually sting is that this is how a lot of shadow automation dies: not because it didn’t work, but because nobody could explain the line item. At least a hard cap forces the conversation that should’ve happened months earlier.
But anthropic and the others don’t give subscriptions to enterprises, only tokens at full API prices
Not quite true, for low seat organizations there’s a fixed rate Teams plan
If you’re spending $1K per month on LLMs – putting aside whether this is productive or ethical for a moment – wouldn’t it make more sense to just pony up the $5K-$10K or so that it would cost to provision a private, local model? Might that not actually be superior in terms of corporate security?
Not at the moment. It’s definitely cheaper to buy LLMs as a service than running an in-house server hall. Anthropic and OpenAI are running at a loss, you know.
Now, risking to lose your data to the service provider is another thing.
Look at it this way, if I pay Open AI $1k a month, their people make sure it works they month. If I let Joe from finance spend $10k on computer parts, Joe needs to ensure that it runs or I need to hire someone who is knowledgeable on local models. If I’m a simple firm, $12k a year might be cheaper because someone else makes sure it works and I can fire Joe when the fancy autocorrect loses a bunch of clients by falsifying work. Then I don’t have to spend even bigger bucks hiring a new Joe because no one knows how to work the damn server he replaced the break room with.
Definitely. We do this at my job. But a server big enough to provide a comparable service would cost at least $30k. And you likely need more than one. And you still need someone to maintain it.
I’ve heard that GPU’s for this work are exceedingly hard to get ahold of as well. Glm 5, which i think is near frontier model capabilities, takes around 1.5 Tb of vram un-quantized.
Not hard. Just really fucking expensive and might have a long lead time.
So hard, then.
It depends, sometimes the private API models are better at a specific task to the point it wouldn’t be worth using one that is worse. (Really it’s the harnesses around them tbh)
Overall sovereign AI is where it’s at. If you have good enough tooling in place
The title is misleading. They didn’t cap it, they just declared that if you are spending more than that, you have to be able to explain what you’re spending it on and why, giving it a business reason and a project to associate the costs to, which I expect almost all Claude users at Accenture probably can. This is simply an accounting change, not a company-wide shutdown of Claude.
Heavy use remains possible, but it now needs a budget owner.
explain what you’re spending it on and why, giving it a business reason and a project to associate the costs to
I love these chilling effects
So only if it can be recharged to a customer
I mean, that’s literally Accenture’s default business model (same as almost any consulting/professional services company), so it shouldn’t be surprising. My point is that it’s not an indictment of AI, and their AI usage isn’t actually going to go down; it’s just Accenture doing Accenture things. They’re not a charity, they’re not using AI for fun, they’re using it to make profit, and they make profit by charging their customers for every cent of AI they use on their behalf, usually with a hefty markup, in addition to everything and anything else they can justify charging against their customer’s accounts. It’s a very profitable business model, and I’m sure they love using AI for it and will continue using AI just as heavily if not even more in the future.
Ten times over.
Alternate headline: C-Suite Execs Come To The Realization That AI Costs Money
i saw a post that was something like “youd think the cocaine class would understand why the first hit is free”
There’s no news here. After the initial tryout phase every business I’ve seen introduced cost tracking. Seems like Accenture is doing the same now.
And it’s going to cost a whole lot more once the investments dry up and they’re going to have to actually pay for all the data centers under construction.
Nah, they’re getting suckers to build the data centers for them. US companies are getting tons of freebies/discounts/writeoffs from foreign countries to put these data centers in – like Canada just announced Anthropic’s going to have a massive data center in one of its tiny maritime provinces, likely enticed to the region via hand outs from the govt. They’re bending over to accept big tech dick even as the country clings its pearls over sovereignty and the US fucking them over.
Carney’s sorta like the old “lady in the streets, freak in the sheets” thing – he’s Anti-America/Pro-Canada sovereignty in his speeches/public appearances, but he’s slobbing all over Trump, Zuckerberg, Musk and Thiel’s dicks behind closed doors. He’s the ideal “girlfriend” for American imperialism. “Guk guk” yes sir, I can take ANOTHER datacenter!! “guk guk”
Canada just announced Anthropic’s going to have a massive data center in one of its tiny maritime provinces, likely enticed to the region via hand outs from the govt
Nova Scotia, but contrary to the assumption of government hand-outs, it is being hailed as the largest privately funded investment in the province’s history.
It can be the largest privately funded investment, and still get huge provincial incentives. Discounts on utilities / infrastructure improvements, regulatory short cuts / unilateral control of building code items, ignoring zoning concerns, tax free / tax write off options for decades to come.
But even more, Anthropic could throw a giant datacenter into a small community, and it may be the biggest investment in the area ever, but that still doesn’t mean it’s good for the locals. Especially since Anthropic is still an American company, and part of American imperial interests / the tech-fascist class. It’s like if a company out of nazi germany showed up and made a huge investment in building a nazi fortress holding nazi computers / tech, and providing nazi services to your country (mostly as a way to report it back to the motherland) – at a time when nazi germany is threatening to annex your country and funding disinformation campaigns to split your country apart with separatist bullshit. Cheering for that sort of thing is wrong on so many levels.
Prolly not. When the bubble pops these data centers will be sold off for cents on the dollar and a bunch of the companies go bankrupt. There will be a glut of equipment, so prices will fall. People will buy up the scraps and provide compute services cheaper.
We could use a skate park
You’re more optimistic than I am. My bet is that when the bubble pops the government will step in to bail out these companies, especially household names like Nvidia, and none of the data center equipment ever finds its way into the hands of regular people. It’s gonna get repurposed into a pillar of our surveillance hellscape, attempting to weed out people who are guilty of precrimes or thoughtcrimes, providing pretext to arrest political opponents and undesirables by going “they were dangerous! Our trillion dollar AI said so!”
As regards the data centre equipment; the SSDs and hard drives used for storage would be reusable by regular people. Those will be nice to have.
The memory is the high-bandwidth kind that is not be usable on consumer motherboards. The ‘graphics cards’ are the size of filling cabinets, require external power supplies and cooling, don’t have video outputs, don’t have drivers for graphics output. If you don’t have a requirement for serious parallel computation with a very high uptime, then it’s not worth the cost of powering them up. If/when the bubble bursts, all that shit is going to landfill.
It’s gonna get repurposed into a pillar of our surveillance hellscape, attempting to weed out people who are guilty of precrimes or thoughtcrimes
You’ve created an entire narrative around this. That’s impressive.
Nvidia is the one selling the shovels during the gold rush. They’re not at risk of going bust.
It’s all the LLm companies leveraging themselves to the eye balls to buy Nvidia chips for their datacenters that are at risk.
Impossible. It would require C-suites:
- having a brain
- realize that they fucked up
- accept it without having a brain aneurysm
- making decisions to prevent that in the future
C-suite still on unlimited Claude plan
Wait what? How? But wasn’t AI the thing to make business save tons of money by replacing workers with an almost free “artificial worker”??
Are you telling me that, as everyone and their mothers were saying, this was just a lie? Who could’ve thought?!
I have a friend that works there. They told me about this, and I was like “per day?”
I was not prepared to learn that the budget was less than a dollar per day. Might as well just stop using AI agents that that point.
Might as well just stop using AI agents that that point.
I don’t work at Accenture, but at a group that had a similar journey from adoption to scaling back to only the included tokens and I would say that is precisely the idea: giving up on ‘Agentic’ use of AI, but still have enough for some acceleration.
From what I gather, in our group the findings were:
- Obviously, it was costing a heavy chunk of change and then even more expensive when rates were hiked
- There was no good way for them to even know what productive end the spend went toward, they know which employee expended a bunch of tokens, but no idea what they would have used it on
- Despite a crank of volume of stuff, they weren’t seeing any business value of the stuff. Requests still took about the same time to fulfill, etc
- The most eager AI producers got ahead of their skis, and their stuff was useless because nothing and no one could reliably fix/tweak it after a certain point.
- All the scary ‘AI will ruin IT security’ that the AI companies themselves have been expressing likely didn’t help either.
- Perhaps the most uncomfartable of all, they found out that however good or bad an AI project turns out to be, management can’t tell the diference until it is too late. Being able to ‘manage’ the content has always been flawed, but the AI dials it up to eleven by ‘looking’ just right as a demo to someone that understands neither the customer nor the process of creating the work, but blows up in their faces in delivery. Kind of like how so many technology article writers breathlessly talked about the photoshop clone, despite many of them never having touched the relevant software, then heavy users reporting that it is actually shit, but the people writing about it have no context to know, but felt compelled to talk about it anyway. Those are management in the fields using AI.
Might as well just stop using AI agents that that point.
Wouldn’t that be terrible…
I just want to put “$29 per month” into perspective:
Imagine a white collar employee earning $100K per year. $100K / 250 working days is $400 per day. Payroll tax and benefits can easily add +50% to that, so it’s not a stretch to guess that our hypothetical employee costs the employer $600 per day.
$29 per 20 working days is about 1/4 of 1% of that cost.
Yeah, that’s like the breakroom coffee budget for the employee that month…
Yeah it’s basically useless for agentic work. Especially with frontier models.
Nevrr forget, Accenture used to be Arthur Anderson, of Enron infamy. They deserve any financial ruin they get, IMO.
Sheeit thanks for the reminder (and trip down memory lane)
Fuck AA
That’s basically saying that they shouldn’t use Claude at all.
Good.
In my company some of the top users spend over $3000/m. $29 is maybe 30 mins - 1 hour continuous running for a *medium" sized model like Sonnet. Not sure about cheaper models.
I spent $200 in one session the other day, watching the clanker design, implement, and review the change. Still have no idea what I did but my name is on the commit
Sounds fulfilling.
/s
I hate it of course. I need to find an exit strategy
Don’t pay the bill. They’ll force you to quit before long.
Fair point, but not any less fulfilling than my day job already was, arguably maybe a little more fun to be spending the company’s money on nonsense. My job pays my bills very adequately, that’s normally the only fulfilling thing about it.
-
Interesting. Yeah, me and my coworkers spend about $1000 per month—so far. The bill keeps going up. One AI workshop thing they made us do spent $100 just in 1 session.
I’m willing to bet that only a fraction of that spend was work task related.
If my productivity (and therefore my job) were measured not by results but by amount of tokens I use, you can bet I’m gonna burn tokens for absolutely everything during my work shift. Even if it’s just asking the chatbot what time is it every second.
Exactly.
The $29 cap signals that per-seat AI budgets cannot yet cover agentic coding tools, which cost heavy users anywhere from $500 to $1,000 a month.
It may be so, but that tells me even if they wanted to use it for productive work, it’d still cost them about that much.
Well duh? I doubt $29 get you anywhere at the moment and that nonsense is only going to get more expensive.
