More Thoughts On The Economics Of AI Not Adding Up

I wrote a piece last month expressing some thoughts on how and why I think the economics of Artificial Intelligence don’t add up. I’m expanding on a couple of those thoughts. First, the cold feet of the bean counters are getting colder when it comes to the cost of token usage. Tokens, being the measure of how the cost of computing all of those requests to whatever AI engine is waiting to invoice for hallucinating, are proving to still be expensive and probably will be for some time to come. Unless the costs have been vastly overvalued to increase margins, those costs aren’t going to come down any time soon. Second, in order to keep the pumps primed the race seems to be shifting from cloud servers to on device use. That sounds smart. It certainly is as a possible security measure and selling point. But at the moment, and probably in the end, already rising costs of hardware will continue to inflate as the memory demands needed to turn those on device dreams into hallucinations…