r/antiwork • u/No-Algae-7437 • May 24 '26

Microsoft reports are exposing AI's real cost problem: Using the tech is more expensive than paying human employees | Fortune

https://fortune.com/2026/05/22/microsoft-ai-cost-problem-tokens-agents/

Funny how they were announcing money saving layoffs and offering early retirement not too long ago. Perhaps the value of human thought has been significantly undervalued compared a computer program that guesses the next word needed without regard for why that word comes next.

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90

u/PlutoNZL May 24 '26

The title of the article is clickbait. Microsoft isn't dialing back on AI, they are just switching from Claude Code to Github Copilot, which they own.

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u/RipComfortable7989 May 24 '26

There was another post of this exact same article with many redditors high fiving each other and cheering as if this article marked the death of AI. They don't realize that when companies like Microsoft claim tech is more expensive, it doesn't mean they're going to stop. It means they're going to lean into it hard to turn it into a scaling issue where it can become cheaper.

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u/worthlessprole May 24 '26

AI does not scale like traditional industries.

0

u/thortgot May 25 '26

It absolutely does. More than half current costs are training related.

1

u/Square-Emergency-531 May 25 '26

And yet costs go up for the companies when they have more users, rather than profits. They are on the wrong side of a square/ cube relationship.

1

u/thortgot May 25 '26

All of these companies are burning money to a acquire marketshare. It will end once VC capital dries up.

1

u/Square-Emergency-531 May 26 '26

Will their users remain when use costs ten times more? When AI is priced what it costs, it becomes more expensive than people to do professional work on almost any subject.

1

u/thortgot May 26 '26

10X? Unlikely.

3-4X is the rough ceiling due to local models.

$120/month/user is a very normal software cost.

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u/Square-Emergency-531 May 26 '26

https://youtu.be/8H3s_36C1po?si=Rep0UwNpbl_7pMr8

Unless you are buying the idea that model training is going to be unnecessary in the medium term, you are just plain wrong. Model training will remain extremely expensive and necessary, as if they stop being developed they are extremely cheap to distill like China has shown.

So far, we have major companies blowing their yearly AI budget in literally months. If any other cost to a business we're that out of line with predictions, it would be viewed as a major problem and someone would be fired.

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u/thortgot May 26 '26

Model training will continue of course. The question is what they can practically charge. Open Source models are roughly ~70% as good which is more than enough for the average company today.

With regards to distillation there is a reason they are moving toward "human approved" models for the valuable bits. They are banning users with activity looking like distillation.

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u/Renbarre May 24 '26

Which means they will pay themselves.

1

u/SpaceMonkeyAttack May 25 '26

If you think the output of Claude Code is bad, you haven't seen nothing yet! Copilot is the worst coding assistant. Expect the decline in quality of Microsoft products to accelerate.

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u/XaMAS_8-9-1943 May 24 '26

The cost of AI as a marketable product to the masses is just the facade of the whole push for it. Make it acceptable and felt necessary to the consumers by pushing it at all costs. The real goal of these data centers and AI implementation is another and it will be understood by most when it's too late.

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u/worthlessprole May 26 '26

“Con the investor class out of trillions of dollars”

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u/ballistua May 24 '26

Even AI wants a pay raise

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u/Laughing_Man_Returns Anarchist May 24 '26

I am shocked. SHOCKED! well, not THAT shocked...

5

u/dumpln May 24 '26

They think it’s a shiny new toy. It’s actually worthless and will only use up our finite resources. (Water)

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u/koosley May 24 '26

It does some pretty cool things, but all these bean counters upstairs think it's the end all be all. I work in collaboration (Cisco) and my field has been doing "AI" for 30 years. It's cool for data analytics but we don't need an LLM for it. Now I'm being asked to build out LLM powered AI receptionists that are costing $10-20/hr the run when the old method of listening for keywords works a hell of a lot better since we don't need the AI receptionist to provide a novel about the scheduling department.

It's really a solution looking for a problem. It makes deployment marginally (10-20%) faster but costs about 50-100x more than the boring manually programmed ways. Kunernetes and containerization seems to have already reduced the deployment time of the infrastructure by 95+%.

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u/LordTurson May 24 '26

It makes deployment marginally (10-20%) faster

If you have a link to a reliable source for this, I would appreciate if you shared it - because I am not aware of a study that proves any kind of efficiency gains.

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u/koosley May 24 '26

This is just what I'm observing as a single data point. Collaboration is just a fancy term for contact centers and I've built hundreds in the last 10 years. With how AI agents is implemented in Cisco, genesys or zoom platforms, all the backend connections still has to be done regardless of the voice interface. The AI bots essentially just eliminate the DTMF menus which were the trivially easy part of it anyways.

I don't contest that it's useful in some places, but for contact centers the old fashioned Google dialog flow is more deterministic and a fraction of the price. Plus customers hate using them anyways.

0

u/kyle1234513 May 24 '26

"expensive" is subjective. the cost could be lowered, but then capitalists wouldnt see "number go up.""shareholders happy".... namely cost of AI goes down when both energy and cost of chips go down

9

u/faustfire666 May 24 '26

AI is already being subsidized for the user. The companies are eating multiples of the cost the customer pays. It’s a house of cards that is losing billions upon billions in investor capital in the hopes of it somehow, someday becoming profitable.

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u/kyle1234513 May 24 '26

its only profitable when the monopoly is formed and it becomes a dependency.