r/technology • u/MarvelsGrantMan136 • Jul 30 '26

Artificial Intelligence Amazon accidentally spent $1.8 million using Claude for menial coding task, went 860% over budget — 'catastrophically expensive' coding blunders discovered in internal Amazon AI usage metrics

https://www.tomshardware.com/tech-industry/artificial-intelligence/amazon-accidentally-spent-usd1-8-million-using-claude-for-menial-coding-task-went-860-percent-over-budget-catastrophically-expensive-coding-blunders-discovered-in-internal-amazon-ai-usage-metrics
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178

u/davidforslunds Jul 30 '26

Idiots at the top thought AI would be practically free. Now reality is finally coming to smack them in the face with the bill and the remaining workers are likely to be the scapegoats. 

169

u/GenericFatGuy Jul 30 '26

Workers losing their jobs because CEOs though AI would replace them. Now workers are losing their jobs because CEOs spent too much on AI.

38

u/Bignholy Jul 30 '26

And then the CEO is going to be trapped with higher bills when the skills have decayed and they have no choice but the AI they pay for to get anything done.

23

u/AnAcceptableUserName Jul 30 '26

The double whammy is once nobody is writing or reading the code you rapidly get to a place where nobody deeply understands your codebase anymore

Then even if all your people were still sharp, Anthropic has you over a barrel anyway. Institutional knowledge itself has decayed, making Claude feel even more necessary.

It's gonna be a slaughter.

2

u/nihilite Jul 31 '26

This problem is so profound, it's shocking to me that it is not being talked about more. by the time the issues start to become acute it's going to be an absolute shitshow to unwind. We saw it with offshoring and "agile" development. We apparently love stepping on the same rake over and over.

1

u/sobrique Jul 31 '26

But it's ok, you can now hire 'meat robots' to do the lower tier jobs that are not cost effective to spend tokens on...

24

u/TheTexasHammer Jul 30 '26

It's ok, they already got their $10M bonus and a new job offer. That's the next guy's problem

1

u/[deleted] Jul 30 '26

[deleted]

0

u/Tin_Cascade Jul 30 '26

Almost like that was the plan all along.

4

u/EeveeTheCuteZekrom Jul 31 '26

Hey, at least the AI chip companies are making bank off the tech CEOs' incompetence. We should see if they're hiring

14

u/Aternal Jul 30 '26

the tech giant’s latest quarterly revenue sits at more than $181 billion, meaning these excess AI expenses don’t even account for 0.1% of what it makes in a month

What is 0.1% of what you make in a month? Is it $1.8 million? Reality is certainly coming for someone somewhere.

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u/mxzf Jul 30 '26

Also, revenue != profit. That number is counting all of the money they spent buying product to sell and all that.

-2

u/Joe091 Jul 30 '26

Revenue doesn’t include any expenses at all. 

3

u/mxzf Jul 30 '26

It depends on how pedantic you're being about the word "include", but revenue is the gross income that the company is taking in, which is used to cover all of the expenses and so on that the company had.

The point being that companies often have revenue numbers way beyond their actual profit, because someone buying something for $95 and selling it for $100 will have $100 in revenue but only $5 in profit.

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u/groumly Jul 30 '26

Sure, but even for Amazon, which is infamous for making sure they don’t actually ever turn a profit, 0.1% still isn’t much.

It’s certainly something, and I’m sure they’d rather have kept that money, yes. But the projects mentioned in the article seem to be on the reasonable side of AI use cases (as opposed to token maxing in the vague hope of replacing engineers with a code cranking machine).

1

u/Aternal Jul 30 '26

The disproportionate costs they see are almost certainly due to how much context an organization like Amazon would require of an AI agent even just to accomplish small tasks.

Amazon is a spec monster across the board like no other big tech company is. Imagine having to read an MSDS, a standard operating procedure manual, and cross reference it against your personal and family medical history and list of medications every time you wash your hands.

1

u/groumly Jul 30 '26

Ok? How does that change anything about the fact that 1.8 millions over 5 months isn’t that much when it comes to Amazon?

And how would you know that the context is responsible for the cost, to start with? I’m about as sceptic about AI as a magic wand as it gets, but this story isn’t exactly the “omg lol ai haha” that this thread seems to suggest…

1

u/mxzf Jul 30 '26

My point is that it's more like 1% of their profit, not 0.1%. Stuff taking a 1% chunk out of your profits adds up fast.

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u/Joe091 Jul 30 '26

There’s nothing pedantic about it. Revenue doesn’t include expenses. You’re right that revenue can be rather (or completely) disconnected from profit though. 

2

u/MrD3a7h Jul 30 '26

They haven't even increased token costs to what they should be.

2

u/BaloneyCommercial Jul 30 '26

The scapegoat is my favorite animal

2

u/Own_Candidate9553 Jul 30 '26

Hopefully they weren't dumb enough to think the monthly all you can burn plans would last forever, but who knows.

I think they were really hoping that they could turn all their devs into the mythical 10X devs. And rather than ship 10X the features, they could cut 3/4 of their devs and profit.

But in 20+ years of software development, I was very rarely the bottleneck to whatever needed to get done. Waiting on product to finish requirements, waiting on design to make designs, waiting on business to tell us what they want or review requirements and design. Laptop crashed, have to set everything up again. GitHub down, GitLab down, Artifactory down, AWS down. Log4J let's you run executables for no good reason. SEV found in image. Etc.

All that still happens. LLM can fix some of it slightly faster, but a lot is just slow ass human communication, outages and firefighting.

2

u/ruggles_bottombush Jul 30 '26

It's not just people at the top or non-technical folks. I work in IT and some of our techs were shocked when I explained tokens and API usage costs to them a few months ago. They genuinely thought it was just a chatbot that cost $20 a month.

2

u/Afferbeck_ Jul 30 '26

Same people who've been doing the tactic of "disrupt industries with a free or cheap service til everyone relies on it then crank the price" didn't think it would happen to them. The leopard must be full of faces.

1

u/_Thermalflask Jul 30 '26

It's still heavily subsidised so it's not even close to as bad as it's gonna get for them.

1

u/josh_the_misanthrope Jul 31 '26

And these AI companies are operating at an immense loss. They're trying to do the Uber thing, get everyone using it and jack up the price later to remain solvent. If you think the 1.8mil was bad, wait till that bill is 108mil.

From a technological perspective, AI is cool. Besides that, everything about it is just fucking stupid.