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You're not the first person to tell me that at various companies. Is there some kind of misaligned incentive there, like a KPI from higher up, or a kickback scheme? Or are they true believers.
Often AI deals require a promise to spend X tokens over Y time period. It’s like promises to spend a certain amount of money on a company’s services without specifying the services to be bought. So if the buyer is under the spend count, they encourage people to use more tokens.
Wait, what happens if you don't hit the minimum? Is there some kind of penalty that's worse than just burning tokens to hit the minimum?
Usually, the buyer has to eat the difference. The seller gets to collect the money.
On the individual level, if you're the director who wanted to put a feather in his cap about how he's a forward-thinker pushing the company forward, you end up with egg on your face. So, before it happens, you mandate that all employees have to use AI. Then, once that goal of token consumption is hit, you declare victory and get a sweet bonus before jumping ship to another company to help modernize their processes by integrating AI based on your success in the first company.
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Depends on the contract, I guess. But at minimum you’d have to pay the difference. So if you’ve already sunk the money and your devs aren’t even bothering to use something you’ve spent a cool few million on… well, that’s a pretty natural time for a desperate VP to start the mandates.
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1st prize: Cadillac 2nd prize: steak knives 3rd prize: you're fired.
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Since most (successful?) adopters get their tools by licensing from GPT or Claude, I would guess it’s an attempt to show return on that investment.
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The popular interpretation is of course something about stupid managers following a hype train, but I imagine there is a more charitable explanation along the lines that AI adoption (/workforce replacement) can be expected to result in an increase in productivity and profits once an initial trough of decreased productivity is overcome by building experience and figuring out the best way to integrate AI. The sort of long-term planning that requires going against local incentive gradients (in this case, forcing workers to use AI even if it is detrimental to their productivity for now) is exactly what upper management is there for; if workers/subdivisions doing what is currently optimal were always a winning strategy, management could easily be replaced by a simple profit-based incentive scheme.
If your charitable interpretation is correct, what kind of timescale would you predict before you hit break-even?
Assuming AI use is kept up (whether by compulsion or voluntarily), 1.5-2.5 years (70% confidence interval), maybe?
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Investors want to hear that the company is taking advantage of AI technology.
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I don't think it's a kickback thing. I work at a megacorp (over 10k employees worldwide) and the focus on AI came all the way from the C suite
Yeah, it screams KPI to me.
We’re techy enough that our investors want to see it, so by God, we’re going to pay someone for their model. Then you’ve got to show that you’re actually using it.
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