Ever run an AI model locally? If you want the most capability you need a fast GPU with 32-48gb RAM. And that’s all for you, ONE user.
Copilot has millions of users, with tens or hundreds of thousands of them hitting the AI all at once. Each one needs $thousands worth of GPU and RAM dedicated to them for the length of their query processing.
Where do you think the money to buy all that hardware comes from? You see OpenAI buying a double digit percentage of the world’s RAM production, you think they got it on clearance sale?
No, there are investors. Investors who are pouring hundreds of billions into this AI stuff. And they don’t do this because it’s fun, they do it because they expect a BIG return.
So what’s going on is just like your neighborhood drug pusher, only the drug pusher is more honest. He says ‘first hit’s free, man’. AI company says ‘AI models are an easy and cost effective way to modernize your workflow!’; they don’t tell you that once you’ve integrated them and fired all the humans who know how to do the work, the price is gonna go way up.
Because the fact is, there IS a real cost of AI compute. GPU time, or at the large scale, datacenter space, power, cooling, etc.
In another few months to few years, the C-suites will stop huffing the koolaid and will start doing cost-benefit analysis on where AI is and isn’t cost-effective vs. humans. With any luck (for the AI people) by that time the AIs will be good enough that it’s a clear benefit. If not this bubble’s gonna pop.
Ever run an AI model locally? If you want the most capability you need a fast GPU with 32-48gb RAM. And that’s all for you, ONE user.
Even then, that’s quite small. Top of the line frontier models would be looking at hundreds of gigabytes of video memory, and just as much RAM.
A terabyte of VRAM/RAM needed for something like CoPilot is probably a fairly sensible estimate.
Depends on what you want to do, the model, and optimization or quantization.
A lot of LLM stuff that seemed pretty amazing a few years ago - chatbots and the like that respond to questions in plain language - can run in comparatively light hardware. Coding agents can take more, but could also be optimized against a particular language and spit out useful snippets.
Image stuff can be pretty complex especially at higher resolutions and detail, and creating seamless video segments gets expensive on hardware, fast.
So, what you’re saying…is the AI Bubble is going to pop once the pencil pushers do the math? But they’re asking their local LLM for that… so it isn’t happening?
Not pop. Correct.
A lot of the managers aggressively pushing AI have little or no understanding of it themselves. They just hear of a technology that can make a human more productive by doing most of the work for them. So absolutely that’s worth a ton of money. It’s why many companies are encouraging if not demanding employees to start using AI- because in their mind, one employee fully utilizing AI can do the work of two standard employees. Of course they believe this because they’ve never actually had to use the damn thing themselves and thus don’t realize it doesn’t do all the work for you. Or worse they think it does and your wonderful code base turns into spaghetti.
Side note- A few companies even had leaderboards for who was using the most AI tokens. This led to ‘tokenmaxxing’, trying to consume as many tokens as possible to prove you are adopting AI. Things like 'Write unit tests for our company code base, then refactor the code base. Spin up an instance of Claude and another of ChatGPT to each generate unit tests of the old code and run them against the new code, then run the tests against each other to check each other’s work, submit full debug output to another instance of gpt 5.5 that will check for hallucinations… Keep that query going for a few paragraphs and you’ll have an army of AI workers all checking each other’s work while producing zero productive output but costing a fortune to run.
Deepseek V4 Flash exists as a small open-weight model and is crazy cheap for what it is capable of. ClosedAI/Anthropic and other non-free models are sketchy AF with their pricing and basically everything else about them.
btw soon GitHub actions will no longer be free to self host
For private repos, unless something changed since I last heard about that
The squeeze could not happen soon enough 😌
For real. This whole “AI/LLM” nonsense could’ve been a nothing burger if they correctly charged it at the get go… Ah, well. Venture capital is suckers, I guess?
From what I’ve seen, the AI companies don’t even know what to charge. For example, claude.ai finally made an API for user costs and we get this fun fact:
Values for a given date may be revised for up to 30 days as late events arrive and reconciliation runs. For invoicing-grade totals, query dates at least 30 days in the past.
what is a “usage” btw? They said 1 cent = 1 usage.
So 1 message sent to Copilot? Or usage = number of response Copilot gives back to the user?
I think that was before. Now it’s based on the compute cost of the request. Like if you ask a large model to perform a long and difficult task you’ll pay through the nose. If you ask a simple model to perform an easy task it’ll be dirt cheap. And that’s what’s got people pissed, is that what used to be ‘one query’ now may consume a lot of credits and it may not be clear how many.
*plays the world’s tiniest violin*
Everyone could’ve seen it coming from mile away
anyone who didnt is a fucking idiot
It wasn’t profitable. This bait and switch was a long time coming.
I’m sure they wanted to drag out the adoption longer than it was viable, too. Didn’t quite get everyone dependent.
In just glad it happened relatively soon. Should have happened sooner :-)
Yup, the “first one is free” deal is always a trap.
Literal drug dealer strategy
I think this is "stupid money’, again.
I hope this makes companies stop being “AI native”
I’ve been using it for well over a year now.
Hit my limit in 1 day and canceled.
Yup, same. x57 for GPT 5.5 now?! The GitHub agent architecture was hot as hell and allowed me to work on projects without ever bootstrapping it locally, but there is no way I’m gonna get sucked into spending hundreds a month. It felt good seeing that $250 refund come through for my yearly plan. I’ll take those funds to Claude or Codex directly. Throttled usage is way better than being fucked over by a glorified reseller.
They’ll throttle you more - it’s just different way of gouging price
It felt good seeing that $250 refund come through for my yearly plan. I’ll take those funds to Claude or Codex directly
I look forward to seeing the follow up comment where you do the same with one of those when they inevitably do the same
Lol, all AI is shifting to this model. Those other companies will bait and switch too just a matter of time.
The company with all money all phones all email all calendars and meetings and satellites and shit will probably not.
Yeah I don’t doubt that anthropic is burning money so fast right now. It’s actually wild to see, GitHub’s pricing might actually be the first glimpse of real pricing for AI we’re seeing.
Sigh. None of this is surprising in the least. The cost of AI infrastructure and compute (coupled with the complexity of the chain) makes it prohibitively expensive.
It only has appeared cheap because of investor money flowing like Niagara on the off-chance that it could be made cheap enough to be profitable after getting everyone addicted to using it. I really don’t think it’s there, and it’s definitely not cheap enough to continue flying for free much longer.
I don’t understand how everyone repeats this shit… as if we have never ever before seen a renewable asset… no, it’s not expensive to run them. It is expensive to give away usage. It is expensive to train. It is expensive to buy hardware. It is very very cheap to run. But hypercapitalism ruins everyone
There will be some major bag holders soon. Who’s is gonna be? The funnelers or the funnelees? How does MS bounce back having integrated copilot into everything?
Given the recent NASDAQ changes, looks like US pension funds will end up with the bag. What a scam.
Microslop can suck it.
So a massive wealth transfer - right after Covid, ANOTHER unprecedented wealth transfer.
Side question: when are you people in the imperial core going to do something about this with all that God given Liberty™ and Freedom® you continually bomb and destabilize the rest of us for?
Shakes Magic 8 Ball: Signs point to never.
We got ourselves a keyboard warrior here.
A stunningly generic defensive sledge from user BassTurd, I guess.
As in the 2008 saying: “All that money has not really disappeared. It is just in the pockets of different people”.
B- but the DOW 🥺
Yeah, what’s the surprise here? Turns out it’s expensive.
For the poor that will take the hit when the next bailout happens
Microsoft was deceptive here and never made it clear exactly what sort of deal you were getting with the flat rate. There was no indication of the actual magnitude.
Yeah especially because they now have some convoluted method involving different counts of processing, cache etc. But the developer has no easy way of seeing those statistics and thus has no feel for them. And developers already have little control over how much tokens a task takes. Which was fine with the flat rate, just use the service. But now that those things actually matter, the stats should be way easier to see?
So in typical Microsoft fashion not only did they raise prices they somehow made it even more shit. Like the AI already sucked, but does the service itself need to suck as well?
Not being able to control costs and very vague productivity improvement claims makes the ROI impossible to calculate. So even if the AI wasn’t shit, it would still be hard to figure out if it’s even helping at all.
different counts of processing, cache etc
Don’t all the providers do this, though? Anthropic/Claude has different pricing based on if you’re caching for five mins vs one hour (which are the only two options for cache TTL). https://platform.claude.com/docs/en/about-claude/pricing
Copilot was uniquely awful at this, because up to until literally days before the switch to usage based billing there was no way for people to track token usage, despite repeated calls from the community.
Microsoft only added a billing “projection” feature on the admin page that was meant to download a spreadsheet (which straight up didn’t work for most people) less than a week before the new billing structure.
Ahh, that’s not great. I’ve only ever used it for free since I get the $10/month plan for free as an open-source maintainer (https://docs.github.com/en/copilot/how-tos/copilot-on-github/set-up-copilot/enable-copilot/set-up-for-teachers-and-os-maintainers) so I’ve never had to deal with the billing side.
The amount of value they used to provide with the $10 plan felt too good to be true.
It was too good to be true. Microsoft had to implement additional 5 hour and week usage limits to cope with demand.
The problem was, for the entire history of copilot, there was literally no way to even check these usage limits. All usage counted towards these limits, even those with a 0x multiplier that didn’t consume premium requests.
It was so bad that many people couldn’t even use the premium requests they paid for the month. The only around it was to switch to auto model routing, which would tend to route to lower quality models.
Well, the point here is the deception. So, if you can find a similar link from the past from Microsoft…
You’d have to be truly ignorant to not know that it was going to happen (not saying that you are). It’ll be interesting to see if there any legal recourse, but I’m guessing not.
All of these companies are hemmoraging money to train and provide LLMs. The only option is to charge more. This current increase, IMO, is an alpha test for future increases. Unless there is a major jump in the technology, moreso the logic to train LLMs more efficiently, the cost has to keep going up to stay solvent for most of these major players.
I’m not talking about ignorance here, just one of the facts about how Microsoft was being shitty.
Are you defending Microsoft’s choice to be shitty? Or just excited to share how you knew better?
Absolutely not defending Microsoft. I’m just saying that it was obvious even a couple of years ago that this current pricing model isn’t feasible. It was always part of the plan to jack up prices, because that’s how every subscription service operates. In the case of AI, the expenses are astronomical and the pricing has never been close to something resembling profit.
Microsoft announced these price increases back in April, this shouldn’t be a surprise to anybody.
It was very much a red flag when they shut down signups.
It was easy to know how much the slop machine costs to run if you bothered to put even a tiny effort into finding out.
The surprise is that they’re not continuing to throw VC money at it to bolster user numbers and mislead investors.
Man, enshittification is happening so fast for ai. Imagine the next big thing. It’ll be enshittified prior to release.
This is the same business model that tech “startups” use, just at a vastly accelerated time table. Upend some existing market (in this case, several markets) by burning through cash at an unsustainable rate. Once your customers have been hooked, and/or the alternatives eliminated as competitors, you crank up the prices to try and make the business cashflow positive.
This isn’t enshittification in the traditional sense, they haven’t captured the market enough for that. They’re just panicking because they’re burning cash way too fast.
That word is only used correctly about 5% of the times it is used.
Don’t wanna be “that guy”, but if if 95% of the time people use it to generally mean “greedy companies making things shitty to try and wring an extra buck”, then that just is what that word means now.
It leaves a vacuum for the concept it was originally intended to describe, but that’s how she goes.
I guess so. But the original definition was useful and encapsulated a specific thing. And then everyone discarding that definition is a bummer. But it’s not like there is anything to be done about it. And Doctoro has said he’s not too annoyed by it himself.
I wholeheartedly agree. I love when I hear a new word, and a mushy concept just snaps into focus. Like, yea, I understood that concept in my “gut” but had not special word for it? So gratifying.
Feels like theft when it gets appropriated to something else.
Glad to hear Cory is cool w/ it. Putting a word (even by accident) to a poorly-expresable part of the human experience that let’s people communicate more effectively? That is a contribution to society that most of us only dream of. Fucker did it by accident. Thrilled for him.
I don’t think saying AI is being enshittified is too far from the orignal essay
This is enshittification: surpluses are first directed to users; then, once they’re locked in, surpluses go to suppliers; then once they’re locked in, the surplus is handed to shareholders and the platform becomes a useless pile of shit. From mobile app stores to Steam, from Facebook to Twitter, this is the enshittification lifecycle.
The AI companies were definitely subsidizing usage of the tech in the hopes of getting people locked in. Don’t think people are all that locked in. Probably some people are, suppliers like NVIDIA seem pretty locked in. But I don’t think there’s all that much to direct to shareholders relative to what they put into it to try to get lock in.
So it’s kinda failed enshittification? Premature enshittification… preshittification?
You bastard… it’s perfect
It’s ironic, but I could care less. You’re literally beating a dead horse.
Are suggesting the word itself has become enshittified?
Interestingly enough, not the correct use for that word lol
😏
Quick, we need a word for enshittified enshittification!
“They’re burning cash too fast”
Their most recent earnings was 82.9B just last quarter, you don’t know what you’re talking about.
Ah yes. Of course, all of Microsoft just exists to subsidize GitHub AI tool usage.
Well given the number of developers they canned so they could dump more money into the AI money pit, they kinda were heading that direction. But I guess they clued in that there might be a small problem with that business model.
They’re putting copilot in everything, it’s not just github that has copilot lmfao
Meta kind of did that with their VR stuff. They skipped the appealing to users part and build a bland, brand-safe, microtransaction-laden experience to sell to businesses assuming they could just use their size to force users to buy it.
I think that’s because Meta acquiring Oculus was the enshitfication.
They forgot the first step where you make a great product that everyone’s clamoring to use.
They did, if by “everyone” you mean rich detached executives that constantly make decisions they have not the intelligence to understand.
„Enshittified“ implies it was ever not shit.
Basically what happened with Claude Opus 4.8
As a mod for the Enshitification you hate to see Enshitification in any form.
As a mod of Fuck_AI, I’ll make an exception in this one case.
COMMENCE THE ENSHITIFICATION!!!
Which completely goes against my Enshitification mod mindset, but here we are.
So…nobody told me life was going to be this way…
clap-clap-clap-clap
Enshittification strategies only work if the product actually produces revenue and it grows along with market share. Unfortunately, even if market use grows, revenue from AI is not there. Even YouTube crossed the break even boundary before the start of ad enshittification and after the Google buyout. LLMs financial projections are starting to show that it will never reach enough revenue to cover costs, much less cover ROI into infrastructure and capacity. The math isn’t mathing and investors are starting to get cold feet. So they either enshittify now or the capital soon will start vanishing.
It’ll be a macguffin that makes your life a little more convenient in some ways, but it’ll cost the equivalent of a 1996 Honda Civic to use monthly and you have to smash your hand with a hammer to turn it on
I have pro+ and I filed an FTC complaint when the billing change was announced and encouraged others to do the same, with the hope that it may lead to a class action settlement in the future.
Good luck, buddy!
My reaction, exactly.
Would love to be a fly on the boardroom wall of any one of those companies which did massive layoffs “because AI”. Probably lowkey panicking on how to get their devs back.
