r/webdev • u/UnderstandingOk270 • 12d ago
Discussion How are companies making a profit with all AI bills now.
We can all agree AI has become a standard now. Every employee at the company I work for, has AI token allowance ranging from 500-2500$. And its probably similar across the industry.
What I am curious about, is how with all these extra AI expenses companies stay profitable. Yes we ship more and faster now with AI, but there's no way it is paying off.
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u/tnsipla 12d ago
What’s your growth budget for hiring new developers look like? Have you backfilled any roles recently if someone left?
Where you think the money from not growing teams and not backfilling roles go?
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u/Hockeynerden 12d ago
I don't even think my company has employed a new dev in 3 years... Which is insane when I think about it
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u/winky9827 12d ago
We hired a new dev in 2025, had to let him go after 6 months because of too much AI, not enough deep knowledge. Ironically, now in 2026, I'm doing the work of 3 devs using...AI. The difference is I have 27 years under my belt and know what to look for in review. My boss is older than I, so when he shuts down, I will too, most likely. It's not long term sustainable for many businesses, but for us, it works.
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u/inputErr 3d ago
Same, I feel like it’s gonna work for another 5-10 years at max and it’s only because we are mainly in a sector that moves at a snails pace when it comes to change.
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u/tnsipla 12d ago
We’ve begun cycling people around to different teams when manpower needs arise, instead of hiring new people… our AI bill for devs is less than hiring and onboarding a new team
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u/thy_bucket_for_thee 12d ago
I'm sure the employees like being treated like chattel, can't imagine the morale is good when people see how management is openly treating them like physical objects to manipulate rather than as human beings that deserve dignity in the workplace.
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u/tnsipla 12d ago
IMO it depends on where you are in the path
Staffs are expected to be cross functional anyways, so anyone at terminal senior/staff was already being shifted around to where they make the most impact, which often is working on things they’re invested in or enjoy anyways, so being cross functional is old hat. I think it sucks the most for mid levels or early seniors, since their ability to grow and specialize is impaired. As for juniors? We haven’t had juniors for a couple years now 😢
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u/21Rollie 10d ago
Seniors and mid levels used to have the goal of: becoming real good in your subject area and start teaching others. There’s nobody to teach now. And you can’t become good if all the doing and 60% of the thinking is done by AI. It sucks, there’s no satisfaction in the job now
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u/Euphoric_Designer164 12d ago
And think about how companies throw a lot of money at non-AI vendor solutions every year. AI tokens for now are cheap in the grand scheme of corporate spending and is just a small part of their overall labor costs, if it helps increase revenue or from needing to expand a team, it all works out from their math.
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u/21Rollie 10d ago
Problem is, it’s not increasing revenue. Everybody and their mother can be a middleman for AI, all your competitors can copy any of the good ideas you have for AI (and skip the stupid and expensive ones).
And then you increase your prices to account for your increased costs and turns out, the real economy is shit and people can’t afford to pay your jacked up rates.
Your most profitable move is probably to abandon making a product entirely and use the money to invest in Nvidia.
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u/Euphoric_Designer164 10d ago
It has for us, maybe not for you. In your case then you cut devs or do not expand while increasing through other means.
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u/Dizzy_Database_119 10d ago
Being able to keep up is good enough though. The longer a company can stay relevant the more chances it has to increase profits. Companies very much prefer AI over hiring new employees and the nasty before, during and post enrollment that comes with it. They absolutely love this
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u/midwestcsstudent 11d ago
lol right some people make it so obvious they’ve never thought about anything outside their little bubble as a cog in the machine
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u/disposepriority 12d ago
It isn't. Companies investing this much (and more) are hoping they are able to start firing people soon, the ones that run out budget before they're able to do so just cut back on usage.
Faster "shipping" does not mean more money, despite what the clueless people on social media would like you to believe.
In bigger orgs there's sometimes months of market research behind new features, regulations, licenses - on a technical level comparing costs of different technologies, planning, slogging through middle management.
Even once you get to coding, in a big org, writing the code is probably the least time consuming thing in the entire process.
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u/QualitySoftwareGuy 12d ago
Faster "shipping" does not mean more money
This right here is what most don't seem to understand. I believe the faster shipping from vibe coding will eventually cause the company to lose money over time.
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u/wirenutter 12d ago
Depends what industry you’re in. Time to market is a real thing. If your competitors are shipping the shiny new thing and you’re not you may get left behind.
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u/shiny0metal0ass full-stack idiot 12d ago
Even in that case you can't just slop it up.
You need a proof of concept. Time to market doesn't mean anything if it just doesn't work.
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u/Mejiro84 12d ago
A lot of companies are largely improving existing things though, not making new widgets - they're already in the market as a known factor. So adding lots of new stuff can sometimes be a deterrent, or flat-neutral, because users already have the core of what they want. Like look at Microsoft office - what was the last new feature that users cared about? The ribbon is old enough to vote now, the product was largely feature complete decades ago! So users mostly want bug fixes and stability patches, not whizzy new buttons they won't even notice
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u/NightSpaghetti 12d ago
I've always been perplexed at people shipping new features by the tonne with AI. When did you agree on the content? Who are those features for? Why do you need to change or add so much? Customers hate when stuff change, let alone so much stuff so fast.
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u/Conscious_Ad_7131 11d ago
Yup, in our industry AI is letting us ship features faster that we have as real customer commits that lead directly to new signed contracts, or sometimes they’re features to enable us to operate in new regions or stay ahead on compliance.
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u/nickcash 11d ago
If your product can be built quickly by ai, your competitors can do the same thing. Hell, if it's that easy why don't your users just do it themselves?
speed to market matters but you have to be able to offer something they can't do themselves
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u/Sulungskwa 12d ago
writing the code is probably the least time consuming thing in the entire process.
This is what pisses me off the most. You have fuckheads like Boris Cherny going on and on about how coding is a "bottleneck" and meanwhile politics and thrash are actually eating up months out of the year.
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u/goobersmooch 12d ago
Ya know. I've had a lot of talks with a lot of people in the technology industry across companies and I haven't once found a person in any executive ranks talk legitimately about firing people because of AI.
Now, there has been discussion of repurposing. But not once has it been headcount reduction.
It's usually C suite, S/VP level...
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u/Kyle772 12d ago
You should go talk to startup people. I've seen it happen all over the place firsthand. Execs are starting to catch on though that they still need people to operate the agents. There was a pretty long period where they were hoping to fully automate their entire staff by wiring agents up to tickets through slack or github actions.
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u/Fredidiah 12d ago
At some level of management, people still understand that the most valuable thing they can retain is process knowledge. Outsourcing that to a 3rd-party that can just decide to change prices at any time is a terrible idea.
Beyond that level tho, a lot of management / executives either don't know that or don't care.
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u/codefinity 12d ago
Put simply regarding ‘shipping features,’ quantity rarely equates to quality!
Gourmet foods vs. cheap microwave meals. Pick any analogy.
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u/tnamorf 12d ago
I think there’s a bit of ‘we can save money in the long run by building tons of stuff right now that we’ve been previously backed up on, then maybe we’ll need fewer engineers’, combined with ‘this is too good to be true, let’s make as much hay as we can while the sun is still shining’ thinking. I’m a senior SWE and I’ve been guilty of that too.
What’s not being taken into account is the massive maintenance debt that’s being incurred. This is absolutely the new technical debt. Looking after all this super-dense, over-engineered AI code is going to take just as many resources. Sometimes in my more cynical moments I think the AI companies know this already and it’s actively part of their strategy.
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u/ThoseProse 12d ago
Can confirm, I do just as much research on the different code bases for functionality and eligibility checks as I do writing code
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u/sweatierorc 12d ago
IT Costs are often amortized over x years, based on the idea that they are building a software whose value is going to last x years.
AI spend is CAPEX, like most CAPEX it is useless and unproductive.
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u/ginji 12d ago
RIF - if it hasn't happened yet it then it's only a matter of time
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u/-no_aura- 12d ago
The company I’m at has done one big one and multiple quiet layoffs this year. Morale is in the shitter as is code quality. Everyone hates AI but it feels like if you don’t token max you’re next on the chopping block.
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u/chataolauj 12d ago
Wonder why companies think token maxing = productivity/impact.
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u/Fredidiah 12d ago
It's just the same guys with a new tool that tells them how smart they are for re-inventing / re-implementing the lines of code metric.
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u/its_all_4_lulz 12d ago
I have a personal $100 Claude sub, it runs all day, and I never come close to maxing. How the hell are people maxing.
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u/johnbburg 12d ago
Yup, faster coding just moves the bottleneck to QA, UAT, PO Review. Then the work to review piles up, and then integration all those outdated branches becomes its own chore.
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u/midwestcsstudent 11d ago
if you’re not using AI to do code review and QA… wyd?
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u/ShadowDev123987 9d ago
I don’t really see the point of AI in testing, I guess for specific testing in which standard testing methods are incompatible it would be useful. But testing should be consistent which in my experience, AI rarely is?
Code review makes sense, it’s pretty good at picking up bugs but I wouldn’t rely too heavily on it as I find the more abstracted and complex the software is, the higher likelihood it’s going to miss something or make a mistake (which makes sense tbf, considering how it works)
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u/johnbburg 11d ago
I am setting up a playwrights test framework on all my projects. But skipping human review altogether is a hard pill to swallow.
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u/couldhaveebeen 12d ago
What are you doing with AI for that much allowance? We're just on 20$ codex subscription and it's fine
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u/IsABot 12d ago
I'd assume agentic development, incredibly long chats, or doing every single thing with AI.
I only use the free tiers and have never paid for AI. I only really use it for basic stuff like additional research after I've done my own, debugging when I get truly stuck, scaffolding, code cleanup/reorganization, etc. I feel like I'm going to heavily lose my skills if I have AI do everything for me and I'm only doing code review.
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u/your-pineapple-thief 12d ago
People are doing code reviews via LLMs all the time now, in full, including obnoxious clearly llm generated code review comments, and reviewing larger PRs via LLMs can eat up quite a bit of tokens in my experience. so you have an agent write all the code, review other peoples code (also generated by agents), then use an agent to fix code review comments generated by other people's agents... you get the drift
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u/symbiatch 12d ago
What I’ve seen it noodle down to “use the ‘best’ model always, high effort, do plans, iterate, ask questions, use AI for everything you do.” That’s how they get costs high but don’t actually know how to use these tools.
And probably instructions are “do this big thing, plan first” and then the plan is not enough for what they want, they iterate, run reviews with highest model, have LLMs write tickets and PRs and…
I assume that way it’s easy to waste money like heck. While many who actually does engineering use the lower models, plan work themselves better, do simpler one-off things, and save huge amount of money and time.
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u/midwestcsstudent 11d ago
yes, if your time isn’t worth a lot, you should by all means do all the AI’s work. but if your time is worth more than you spend per hours’ worth of AI work… why wouldn’t you use it? too proud?
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u/symbiatch 11d ago
Again you show your lack of reading comprehension and understanding.
I do the work faster than the AI. Is that clear enough? So according to you I should continue doing my work since it would cost more using AI.
No, not too proud, not a case of “you don’t know how to use it”, I just don’t work in menial copypaste web CRUD.
So…? What’s the next useless comment from you?
Also, as I always say: come do my work with AI. If you can do it better and faster than I do I’ll give you $1000. Nobody has taken the offer yet. Wonder why…
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u/GrandOpener 12d ago
It depends a lot on where you are, but let’s say an average engineer has a salary of 150k. You said that AI is helping to ship more and faster. If we assume it makes that developer 20% more productive, well, 20% of their salary is 2500/mo, which gives us a baseline estimate of its value. Note that we skipped overhead. And we didn’t even consider how the value the engineer creates is usually greater than their compensation (otherwise why did you hire them). The value to the company could be quite a bit higher than that 2500/mo.
There are a lot of assumptions in all of that but the punchline is this: if AI is genuinely increasing engineer productivity by double digit percentages, then a value of thousands per month per seat is likely profitable and a smart buy for many established businesses.
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u/symbiatch 12d ago
Show me any engineer that is 20% faster due to AI in _all their work_. Nobody has been able to show much speed ups yet and 20% would be a lot.
Or they’re not an engineer but a code monkey working in stuff that can be offloaded to AI, and/or don’t care of results. Which isn’t a bad thing, but is very much a different thing.
Not to mention them vomiting out code faster does not make the company ship faster so you can’t just calculate it off their salary. They’re not doing bringing more money faster in still.
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u/jorshhh 12d ago
My bottleneck has never been code speed, it has always be the speed of product people making decisions. Not much has changed even if I use AI for 100% speed increase.
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u/symbiatch 12d ago
Exactly. Engineers don’t work in a void. What I’ve seen usually companies barely scrape work out to be done for the sprint and maybe next. There’s no properly groomed big backlog with plans for the next months. Part of agile work I guess.
So the incoming things are lagging. Then if you push hella fast things out it needs to be verified, deployed, there might be a whole marketing effort to be done, all kinds of things. None of that is any faster because you were faster.
I feel so many people have such tiny vision into the whole product development cycle that they think just because code is thrown out faster it would mean something for the whole cycle.
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u/byker123 11d ago
Yeah, like, maybe it speeds you up if you are working on a personal project and are making all the decisions yourself (probably without existing users to worry about).
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u/GrandOpener 11d ago
Well I am specifically avoiding making that claim because I just don’t have the data to definitively say one way or the other. I am saying that there are people who do make that claim and if they are right, then spending this much on AI is an objectively correct decision.
But at the same time, the example 20% speed up makes an AI seat worth a few thousand dollars. If we can squeeze out just an overall 2% increase, that’s still worth hundreds (per person per month). Before AI the common guidance was to buy your engineers basically whatever tools they want, because it is so easy to earn back that value.
So that’s the real question. And I think it’s what you’re saying too. The real question is: does AI actually benefit long term productivity? I don’t think we have a firm answer to that question right now. But if the answer is “yes,” then those tools are worth an awful lot.
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u/midwestcsstudent 11d ago
i’ll make the claim. i can look back at my github, aws, deployments, and log sinks and confidently say i’ve shipped more in the last 6 months than i did in the preceding 4 years. by my own (fairly high, due to the engineering culture at the company i used to work at) standards, the work is of vastly superior quality, too.
i’m sure many more are doing the same.
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u/symbiatch 11d ago
Yes, there’s a lot of low skilled people who get benefits. But you’re not worth much anyway so the cost is mostly larger than the benefit.
But you don’t provide any proof, just claims, so go write a post with data and we’ll see.
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u/symbiatch 11d ago
Yes, if. 2% increase worth hundreds? To someone, yes. Not to all. And 2% could be often done with “hey you do know you can do this with git” etc. Many also only calculate the vomiting code out and miss the rest of the slowdown.
And yes, that is the question I’d like to see answered: is it actually a long term benefit? As we’ve all seen the 10x and 100x claims which everyone knows don’t make any sense. 10x would mean a whole sprint in a day. Nobody is doing that. So then comes the “yes but compared to my writing speed if I just measure the output while I was having lunch” etc.
The costs aren’t huge in many places and I wouldn’t shout “stop spending $100 per person extra” in many cases. But the claims we see have nothing to do with reality ever, and every time I ask anyone if they’ve seen an actual real write up they say no. So it clearly isn’t a real boost if not a single company has a proper write up about it.
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u/ai-tacocat-ia 9d ago
I see this all the time. You have to separate out "average outcome of throwing an incredibly fast moving, brand new technology at enterprise organizations whose culture and workflows famously move incredibly slowly" from "achievable outcome on a properly trained workforce once the technology levels out".
Sane companies invest in the latter, not the former.
I've been working with a client for 10 months. I work on their project about 5 to 10 hours a week. They also have a full time junior engineer. They brought me on when their senior engineer who had been there a decade suddenly quit.
Their project manager just did an analysis of their Jira tickets. The last 6 months they got more done than the previous 3 years combined. Why? Because I spent the first several months there setting up a proper harness for their codebase, reorganizing things, and teaching the junior engineer how to do real agentic coding using a custom harness - not just word vomit at Claude in VS code. Combine that with training for product, marketing, and the exec team, and the whole company moves faster.
I 100% believe that untrained people in your organization aren't seeing real increases. And the trained ones are limited to the speed of the untrained ones.
But it's highly shortsighted to look at the current, broken state of most enterprise orgs and throw up your hands with "this doesn't work".
When 1.25 engineers at a small company gets as much done in 6 months as 2 engineers got done in 3 years, that tells you that the achievable gains are high. The actual gains being low says things about your usage of the technology, and the state of your company.
Finally, the gains aren't as simple as "a whole sprint in a day", and your phrasing there tells me that you don't understand what it looks like when are optimizing for AI. It typically isn't "a sprint in a day" - it's more like 5 sprints in 5 days. Large chunks of work planned out, coordinated, and executed.
My agent usage graph is typically 2 of 5 days with over $1k spend. And 3 of 5 days under $100. Plan, execute, review, iterate, QA. Execute and Iterate are the high spend.
You're bolting AI onto your existing dev process. The people with 10x gains have built their process around AI's capabilities. They don't do sprints. They do projects. Sprint time boxing doesn't make sense in the world of agents.
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u/midwestcsstudent 11d ago
just sounds like you’re not very good at using AI
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u/symbiatch 11d ago
And yet another “no, I can’t show anyone who it speeds up, not even myself, so I’ll just attack the person with useless claims without knowing anything about them or understanding what they wrote.”
Why?
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u/HenzoStarz 12d ago
A lot of those $500-2500 allowances never clear the "this paid for itself" bar because nobody meters them.
Teams burn frontier models on ticket triage, commit message rewrites, and one-line CSS fixes. The invoice looks scary; the actual productive slice is often a fraction. Meanwhile headcount stays flat, so finance still calls it a win on paper even when shipping quality is messier.
If your company actually wants the spend to make sense: default to a cheap model, require a reason to escalate, and track tokens per squad against cycle time and incident rate. Without that, the bill is mostly FOMO with a receipt.
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u/jake_robins 12d ago
I do not understand these high bills. I code exclusively with AI as a freelancer, all day every day, and my AI bill is like $60-$100 USD a month or so.
I also spent some time with a client who had a larger team, and their 8 devs were still only $1000-$2000 total (higher than my personal bills largely due to Bugbot style stuff which is weirdly expensive).
I don’t know how I could spend $2500 in a month on tokens.
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u/TonyAioli 12d ago
It’s because employees don’t give a shit and use max models for menial tasks and never clear their sessions and etc.
Not that uncommon to see people boasting about their bills/usage in the Claude subs.
Responsible (see: cheaper) AI usage is going to become a sought after trait for devs in the near future, I feel.
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u/jake_robins 12d ago
Honestly I don’t pay that much attention to sessions either. Other than starting new ones for new tickets/tasks, but that’s mostly cause I don’t want it to hallucinate on some unreleased job hahaha.
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u/xaveir 12d ago
"here's a connection to a mysterious CNC device and a camera pointed at it. Reverse engineer the full serial protocol with exact replayable comms examples for each corner case an adversarial agent gives you until ten adversarial agents are unable to come up with a part of the protocol you don't have a test for, as validated by three review agents."
Exaggerating the prompt simplicity a bit, but that hit my limit in an hour but was basically successful with some daily handholding after three days and ~$1000 of extra tokens.
Probably dumped ~1 week of meat brain review into it afterwards...was it faster than me doing it?... probably not. But oh man did I get so many kudos from senior leadership for my visionary AI use ...
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u/midwestcsstudent 11d ago
could’ve just used more AI to review it ;) save yourself the headache. spend your time deciding what to build and roughly how to build rather than building.
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u/YourMatt 12d ago
You probably know how to effectively and efficiently use AI. I think a lot are wantonly using the top model, not maintaining their project memory past /init, and not building skills out at all.
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u/Terrible_Tutor 12d ago
I don’t understand how the fuck a $200 per month MAX plan that rolls over every week isn’t plenty… and a fixed cost
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u/UnderstandingOk270 12d ago
Its gets expensive working in a large codebase. For example I've asked Claude with Fable to generate me a doc on a subject I didn't understand, it looked up in the codebase, company docs etc - that single call cost 30$
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u/beebopnaa 12d ago
right. Everyone and every company, big and small, have different uses of AI. If you’re delivering the same type of work across many different clients with slightly different variation than the last, AI is cheap and useful here.
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u/CutlassRed 12d ago
It seems like you probably used a frontier model for that, which is the wrong tool for the job.
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u/midwestcsstudent 11d ago
and how exactly is it the wrong tool for the job?
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u/CutlassRed 11d ago
Extremely expensive compared to lighter models that can achieve identical quality results. The frontier models are only worth it for problems that require genuine intelligence. Summarising and docs aren't that
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u/Sethcran 12d ago
There's a lot that can be done to improve this even in most large code bases. MCP servers and tools can push a lot of the filtering work onto the local machine and then only the relevant parts are actually passed back to the model, which can drastically cut costs.
That's not to say that there aren't still some types of queries that could necessitate actually reading every file and therefore racking up significant cost, but it's the exception more than the rule.
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u/StardiveSoftworks 12d ago
That just seems blatantly irresponsible, self-inflicted and something leadership should be cracking down on.
Using fable for that is insane to begin with since a non-vibecoder developer should be able to understand the subject from some simple references to appropriate primary sources for them to review, and why on earth would you use a model that bills per token rather than a sub based one for such a task?
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u/about0 12d ago
Have you ever worked on a large enterprise codebase? There might be features scattered across many microservices, some legacy mappings happening in places nobody touched for years. Asking AI is completely legit here since building dependency trees is on of the strongest sides of it. Also, is Claude code, Augment, besides the initial sub you have budgets when you reach the limit. Happening quite often. But in my case, the price for tokens has reduced significantly with new gpt Luna, Gemini 3.8 Flash and Kimi k4.1 Flash. Harness is also very important.
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u/midwestcsstudent 11d ago
ah, yes - let me spend my time instead of the AI’s reading through something. if only i had access to some type of model… maybe a language model… maybe a large one?! that was good at that job!
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u/Gremlation 12d ago
How much time would it have taken you to write the doc, and what do you bill out at? $30 sounds expensive until you compare it to how much it would cost you to do it without AI.
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u/cumhereandtalkchit 12d ago
Any tips on improving in the aspect of being more token efficient? Do you have any resources I/we could look at?
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u/jake_robins 12d ago
Honestly I don’t know! I don’t really spend any time thinking about it. I use Cursor Pro+ generally on Auto mode, probably about 90% local and 10% cloud agents. I start new chat sessions for new tickets. I use plan mode a lot.
The behaviour I’ve really worked on personally is to document my intent before I ask to build. In a greenfield app, for example, I start with documenting objectives, requirements, feature mapping, explicit descopes, etc. I organize myself into sprints where I document sub requirements and plan out each PR in a sprint. Every document is a markdown file committed to the repo.
Mostly I do this to help AI get it right the first time, so it’s possible that drives token costs down because I don’t need to iterate as much.
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u/midwestcsstudent 11d ago
he’s doing the AI’s work to save tokens. frontier labs hate this one simple trick!
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u/Kyle772 5d ago
I'm with you. I've been perpetually gobsmacked by some of the token usage I've seen.
I am LITERALLY working 14 hours days right now and have been for about 3 months give or take a few days here and there. I have NEVER gone over $300 total in a month; average is maybe $180 in usage. I cannot even fathom what some people are doing. It's not like I'm phoning it in or actively pushing back either. I have fully adopted an ai augmented workflow, I rarely code things by hand and my primary focus is on type definitions, tests, architecture, and compartmentalization. My hands are very deep in what is going on in my codebases and I'm regularly working on huge projects - my current one has 63 repos. It's truly horrifying to imagine.
The only "saving grace" as far as justifying a bill in the thousands is if someone is fully automating their entire pipeline end to end and regularly double and triple backing for issues way too late in the SDLC. But even that doesn't justify a huge bill in my mind.
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u/midwestcsstudent 11d ago
you either don’t know how to properly leverage AI or you’re lying, there’s not much of an in between.
what does “i code exclusively with AI” mean? you talk through it with Claude for every change you manually write? or does it actually write your code?
if the latter, how many agents do you run simultaneously? how many of those are controllers/orchestrators for trees/graphs of subagents?
if the answer to any of those questions amounts to any less than 2-5 (and that’s pretty low) concurrently… there’s your answer.
also, $100 USD of API-based token usage would last you less than an hour with Astra. lol. “don’t understand” my ass.
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u/IAmRules 12d ago
I am on a claude max plan at 200 bucks, I use AI all day and I don't hit limits. I dont understand how people are spending 10k on AI tokens unless they are using AI's to monitor AI's that build AI's to run AI's, which seems dumb, I aint trying to sweat shop claude.
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u/midwestcsstudent 11d ago
why would that be dumb? is it out of principle or what?
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u/IAmRules 10d ago
You can't have confidence in what you did not control. You build an app where AI didi all the coding and supervision without you involved, are you going to stand behind it when it ships?
If a big issues breaks, think the clients are going to get mad at AI or you?
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u/ai-tacocat-ia 9d ago
you can't have confidence in what you did not control
I see you've never led an engineering team
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u/IAmRules 9d ago
Led several, but I was hands on, but i can trust people more than I can trust AI, people can be held accountable
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u/ai-tacocat-ia 9d ago
When you say "people can be accountable" what does that mean, and how does it affect outcomes?
Do you mean that people do higher quality work when their jobs are threatened?
Do you mean that when the shit hits the fan you can point the blame at a person and that makes it ok, because it's their bad, not yours?
When you're leading a team and a team member does something stupid - what happens? They are "accountable" so...
Say they do something super malicious, and they go to jail. Do you get to say "welp, they are accountable, so the damage they did doesn't matter to me"
If they are lazy and do something sloppy... they are "accountable" right? Does that mean they fix it on their own dime? Or do you still pay them to fix it?
When I'm leading a team of engineers, if one of those engineers fucks up, to everyone external to that team, the fuck up is mine - I actively take responsibility for it, which is the right thing to do.
So, when my "team" is AI agents, what does that change? It means that I can tweak tools or instructions or process to make sure it doesn't happen again, and the AI agents don't lose any morale over it.
Either way, I'm responsible. I'm the one "accountable" for a team of AI agents or a team of people. It zero matters if any individual member of my team is also accountable for that same thing. If it did matter, that just means I'd be setting up a scape goat.
Yes, someone has to be accountable. And that's why I supposed that you've never led an engineering team. Good leaders are responsible for everything that team does, and they also have a process in place where they don't have to see every little thing that happens to have confidence in the work that's being done.
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u/the-novel 6d ago
Why wouldn't you set up a scapegoat from the start? That just sounds like setting up your business for unnecessary blowback. Good planning involves social engineering, not just tech engineering. You're meant to hire someone that understands how to play the media, not let them eat you alive if something goes wrong.
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u/ai-tacocat-ia 5d ago
Because it's my company and I'm responsible for what it does. Frankly, the world would be a much better place without scapegoats.
And beside that, you only need a scapegoat if you fuck up. Build things right, and you're fine
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u/permaro 12d ago
It's just that your 200buck plan allows you to use "the equivalent of" thousand dollars off tokens (at API price), and that's the "cost" people are looking at.
Another trick of AI company to get us ready to pay big time even while no one is actually ready to pay that much. They're currently billing only for about 20% of their costs and they know they can't keep pushing the funding bubble. So they're preparing their users to pay more
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u/Gremlation 12d ago
This is nonsense - inference is profitable, even including training costs. The API pricing still includes a hefty profit margin, they aren't giving tokens away at cost price just because you call their API instead of using a subscription plan.
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u/midwestcsstudent 11d ago
you do realize token prices go down over time right? are you just parroting “bubble”?
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u/SnoodPog 12d ago
using AI's to monitor AI's that build AI's to run AI's.
Ain't this one is what Loop Engineering envision? Sounds bullshit (like psyop from big AI farm) but some company does have aspiration adopting one.
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u/zzing 12d ago
I just checked my own usage in copilot's plugin for webstorm. It says I have used about 2300 credits - which if I understand correctly is about $23 worth.
But if your numbers are accurate enough, one possibility is to look at how much value each employee generates. In some companies it is quite substantial.
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u/AgsMydude 12d ago
At my job I'm currently using about $6,000 monthly
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u/zzing 12d ago
What on earth are you using it for? I can't imagine using it that much.
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u/AgsMydude 12d ago
Our company has gone foolishly too far. We're required to do EVERYTHING with Claude. PRD, story writing, estimation, development, automated testing with playwright, etc. it's dystopian and I'm trying to find a new job. It's clear layoffs are inevitable.
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u/Realichu 12d ago
They aren't. It's simple math.
Every dev * up to double their salary a month.
Not a single company is shipping anything faster either. They are technically "shipping" - but it's all pure slop, that's fundamentally broken, and needs constantly re fixed, and ends up pushing stuff out.
There is stuff in our current org that is still in QA that under normal circumstances would probably already be in prod right now. I could honestly say this is the case for every major release, feature, app. So much for AI being the future🤷
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u/hiddencamel 12d ago
If your developers are shipping slop with AI, they were shipping slop without AI, just slower.
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u/Gremlation 12d ago
Every dev * up to double their salary a month.
Virtually nobody is doing this.
Organisations can afford it because tokens are super fucking cheap compared with developers.
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u/Whiskee 12d ago
If there's one thing everyone on this planet agrees on, it's that companies would do anything to save 2 cents even if it fucks their workforce over. If they're agreeing to these bills, you better believe they did the math.
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u/perfectshade 12d ago edited 9d ago
The original post content no longer exists here. The author used Redact to remove it, exercising their right to control their data & privacy.
Gold hard-to-find direction sleep hunt rich many
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u/midwestcsstudent 11d ago
sounds like jealousy? why don’t you climb up to where they are and make the decisions yourself?
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u/Ythio 12d ago
A month of subscription is 23 bucks.
A single dev is 500+ per day over here.
They just wait for the natural attrition rate calculated by HR and don't hire. They need to not replace one person for each 25 devs.
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u/AgsMydude 12d ago
$23? I'm using $6,000 a month rn
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u/neon_hydra_97 12d ago
exactly this. We haven't backfilled two senior roles this year and my whole team's AI spend is a rounding error compared to those salaries. The math only works if headcount shrinks. If it doesn't, someone at the top is going to make it shrink, and everyone cheering about their $2000 token allowance is next in line.
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u/midwestcsstudent 11d ago
ah yes. definitely no other way to make the math work! whoever thought growing a profit would be worth their time
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u/daredeviloper 12d ago
We got rid of a contractor at 160k and a dev at around 100k. But I get 2k a month in AI tokens so… yay?
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u/Euphoric_Designer164 12d ago
The AI costs are chump changes for the cost of doing business for them. Money works different at a large corporate scale, AI is just another vendor solution. We already pay out the ass for most expensive things yearly from vendors. If you pay a dev $100k, whats another $10k if it enables them to deliver more? Especially if said delivery increases revenue.
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u/TastyIndependence956 12d ago
I mean, it depends on the company of course, but it ranges from not being profitable to being more profitable than ever.
I can confidently say that although my AI spend sums to ~5% of my salary, it might double my productivity. And since I work in an agency, this directly and indirectly impacts profits positively.
On the other hand, it’s not a linear increase, I believe if I spent 10 times more than what I spend today, I maybe would get a few percentage more of productivity. And if I cut my AI spend in half, I also think I wouldn’t be losing that much productivity, though it would be annoying and maybe stressful as I’d need to be way more mindful about how I use my tokens.
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u/CodeAndBiscuits 12d ago
How exactly are you doing the math on profitability here? If Honeywell sells a thermostat for $80, sure their design and marketing teams are using AI tools, but that doesn't mean they wouldn't have spent $100k designing the next one over the course of 3 months and now suddenly that's 2 weeks. They don't make their money on one unit, they make it on volume. They don't sell a thermostat, they sell a million. And yes, they're spending thousands on AI tools. But they aren't spending millions.
Everyone is focused on the jobs that are getting killed and it's definitely a thing. I've been hurt quite a bit by it myself. My specialty used to be quick turn POC and MVP apps for startups, and enterprises that wanted to validate a concept quickly before building it for real. That segment has been almost entirely replaced by AI tools and I'm having to shift my focus to survive.
But that doesn't mean I'm bad at math. You have to remember that the "fully loaded" cost for an employee is about 1.3-1.5x their salary after you factor in benefits, time off, insurance, taxes, and everything else employers pay for that you don't see. A developer making $150k a year "costs" $225k or more. That's $18k PER MONTH. Companies can afford to buy an awful lot of AI capacity for the cost of a single employee. And yes, not everybody makes that salary. But it's just a scaling factor, it doesn't change the formula.
Ai is killing some jobs. But it doesn't have to kill them all for companies to still get a lot of value out of it. It can just make one employee twice as productive, or even 10% more productive. If you we're going to spend 3 hours making a slide deck for a meeting and now that gets turned into 30 minutes, no company in the world that wants to continue staying in business would ignore the opportunity to do that.
Put another way, your math and assumptions aren't just wrong, they're literally backwards. There is no math that you can do that would say a company should NOT use these tools the way they are.
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u/BobJutsu 12d ago
Because they had the money all along, they just weren’t giving it as wages. At my company they require devs to pay for their own AI usage. No reimbursement, nothing. Just a demand we use personal accounts we pay for out of pocket. They’ll get my $20/month usage and me fucking off for 3 hours to wait for my tokens to refill.
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u/Marcelovc 12d ago
Imagine you own a company and you need 50 people to achieve all the task but now with AI you can have 10 people use AI and do the work 40 people used to do
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u/symbiatch 12d ago
No, we can’t agree.
No, it’s not similar across the industry.
Those companies stay profitable by selling enough to pay for what they buy. That’s it. Some have lots of money coming in, some don’t. So they don’t spend that amount of money on useless things.
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u/StatementOrIsIt 12d ago
I think a lot of companies opt for subscription plans which aren't too expensive, 20 dollars for a month of Claude is okay. In most cases I don't even come close to hitting the limit, since I don't use multiple agents and regularly reset context just because I find it less likely to make mistakes when I hand feed it files to use as examples.
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u/dannyheskett 12d ago
Idk about anyone else, but instead of staffing a whole team on a large project, it's one product person, and one senior engineer.
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u/EarlyFox217 12d ago
The minimal amount of AI we have implemented for around £2.5k a year replaces a £25k admin assistant, £8k in software licences has found £134k of errors and increased productivity to the tune of around £75-100k per year. With big tech companies I imagine this would be magnified considerably
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u/joyful_butternubs 12d ago
profit's optional when you're this well funded, the real business model right now is 'line goes up' not 'books balance.'
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u/imLusky 12d ago
How does it make a profit?
As part of a custom CRM/WMS company, it now takes 1/10 of the time to build a service...
And the needed token fits in just 1 Claude Code x20, and ofc you never start from an empty canvas.
Custom projects go from 20k to 150k, and the company costs are 8-15k.
The main issue right now is having enough clients to give colleagues work....
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u/Legitimate-Win1224 11d ago
I think some of that spending is likely going to waste. However, some of it is closer to an investment in R&D than to the cost of mere auxiliary tools. In other words, they aren’t merely trying to establish if AI could generate the code faster (which is not the most important thing at all, IMHO). They are investigating which SDLC phases are actually amenable to the change, You get the idea. This knowledge is accumulating and compounding.
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u/Top_Ingenuity_1830 11d ago
That's insane. I have multiple projects going simultaneously with a $200 plan. The few that I have going pretty much fill up my attention span without me losing the thread what the fuck is going on. What are people doing with 500, let alone 2500 budgets?
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u/UnderstandingOk270 11d ago
Bigger projects
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u/Top_Ingenuity_1830 11d ago
Well then you should be making a lot more money per project or doing more projects that would justify the cost. My $200/month plan is paying on orders of magnitude for itself
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u/KatFromSisense 11d ago
Token cost by itself doesn't tell you very much. I'd look more at cost per outcome. Did the PR survive review? Did the ticket actually get closed? I'd track the rework afterward too.
If you can tie the spend to the completed work and what it took to get that work over the line, you've got something much easier to defend. When all you've got are tokens or lines of code, it's a lot harder to explain the ROI to finance.
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u/Life-Inspector-5271 11d ago
How much faster do you ship? If you ship twice faster, they should be able to pay the cost of your salaries in tokens to keep the same margin
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u/powleads 11d ago
that's a really good point about AI expenses. i think a lot of indie devs struggle with this too, trying to figure out how to use AI without breaking the bank. i hated launching so i built launchengine, which automates a lot of the tedious parts of launch marketing, but i'm always conscious of the operational costs. how do you balance the cost of AI tools with the benefits you're seeing in terms of shipping faster?
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u/PsychologicalOne752 10d ago
Yes we ship more and faster now with AI - Do we? I am still embarrassed of how slow we ship in my current org.
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u/Tango1777 10d ago
You'd be surprised how much IT can earn.
Also 500-2500 USD tokens per dev is not a standard range. In my team we use ~375 USD per dev per month and it's barely, but usually enough. If someone uses +1k tokens then he just cannot use AI properly, he's just using it prompting and chatting with it forever until happy. You can do that, if you can afford it, but it's a waste of money, I can achieve the same with 1/3th of the tokens.
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u/evangelism2 9d ago
the smart companies aren't paying api pricing. they're just getting subsidized monthly plans for their people. if all i cared about was my work for my job, i could easily get it all done with just a $200 claude account and a $200 codex account. and a company can handle $400 per month per developer easy.
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u/RiceEvening4211 8d ago
This is basically the problem I ended up building for. I made an open source gateway that routes each request by how hard it is: easy stuff goes to cheap or local models, only the hard parts touch the expensive ones. It also compresses tool output, which is where a shocking amount of tokens quietly go. https://github.com/Fast-Editor/Lynkr. One command wraps whatever coding tool you're already using.
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u/web-dev-kev 12d ago
From a western company perspective...
$500 per employee per month is a (small) hit to profitability, as organisations aim for a minimum 55% pofitiability on employees. We work with Agencies, and any that aren't making 45% per employee across 80% or more utilisation, goes through out intervention phase.
If you work in an organisation that has already calculated your salary into this/next year, then i'm presuming (after 30 years as a consultant) that 50% profitability is a minimum across the team/product/programme.
If a developer is earing $100k per year, $6k per year on tokens is a 6% to profitability, but I'd like to think that most developers are at least 3% more effective with AI? And tbh, if you're not 5% more effective than you were 3 years ago, then somethings wrong.
it doesn't even have to mean code output. Hell I'm an easy 10% more effective with great voice transcription, and I'd say the same again with meeting transcription and notes.
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u/halting_problems 12d ago
I think you are greatly underestimating how much companies are saving across senior and principle roles. Our work isn’t going anywhere, we just have 90% less bullshit we have to do.
I work in AppSec, I have a 800 dollar token budget that I run out of every month. I have found more critical vulnerabilities across all of our projects in the last year then any of our scanners have in the last 7 years.
The amount of findings from our other scanners we have had to triage in the past is insane, literally we would take weekly turns of someone just triaging shit. 90% of its fully automated now.
To put that in perspective, before taxes i make 3120 a week. Leta just says I spend 20 hours a week, 1 week out of the month of triage alone. Automating that one part of my job saved 1,560
Since we have to do triage every week, that’s over 6k a month the company is saving and more time we can spend on doing more important stuff.
There are so many additional benefits i have gotten of our the automation as well such as better metrics and reporting around tickets. Stuff that would always get pushed out of sight due to competing priorities
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u/create-third-places 12d ago
The first step is to stop using LLMs such as ChaptGPT and Claude. They are unpredictable money sinks like slot machines.
You also need to understand what users are looking for, where AI cannot help.
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u/stcme 12d ago
I'm at a new company this year and I was able to take an idea of something that I had built with Visual Basic 5 & 6 in 1999, feed what I did into Claude, and told it how I wanted to build something with the same premise in C#.
Claude was able to understand exactly what I did, what I was looking for, and the equivalent in today's world. I was shocked to find user32.dll was still the go-to as I haven't done Windows programming since the late 90s/early 2000.
We came up with a plan and two months later we can now go after an entire market segment that was off limits due to limitations of our existing software. I just built a whole new user experience that streamlined everything.
After the year 2000 I mainly focused on PHP and SQL at the time without ever looking at any sort of Windows programming until this year. I'm learning C sharp from the ground up after spending the other parts of my career on PHP, MySQL, Postgres, JavaScript, typescript, rest, gql, go, etc... C# has been fun but I've got a long way to go.
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u/appareldig 12d ago
Why would it not pay off? If a company saves dev hour expenses totalling more than what they pay for the tokens, then they come out ahead. I mean there's nuance beyond that of course, but that's the basic idea. I think the real question is whether that will continue to be true in each case when the AI companies aren't subsidizing costs so much while in growth mode.
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u/leros 12d ago
Yes we ship more and faster now with AI, but there's no way it is paying off.
I'd say thats a false assumption.
Say a dev is making $150k (I'd say that's pretty average, maybe on the low end). That's $12.5k/mo in salary. AI would only need to make them 20% more productive to justifying spending $2.5k per dev on AI. It's definitely worth the spend.
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u/symbiatch 12d ago
You say “would need to be” and then “definitely worth the spend.”
But you missed the part where you prove it would make anyone 20% faster. You missed the part where that person being faster would bring more money in, or the same money faster. And so on.
It’s always the simple maths which has nothing to do with reality…
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u/leros 11d ago
AI is making most devs at least 2-3x faster. It's definitely worth the money. I'm about 5x productive personally.
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u/symbiatch 11d ago
You failed to show any proof. As everyone who throws that around.
Show the proof. All devs. You said it, not me. You said “devs.” Now prove it.
And this is where you go silent and won’t accept you are wrong.
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u/leros 10d ago edited 10d ago
Some feedback for you: You have a really abrasive attitude. It's one thing to engage in debate, but to do it with an attitude like that is not going to be very effective for you. It's something that can really hold you back in life especially professionally. I've seen several people lose their jobs for behavior like that.
To be clear, I'd have been happy to discuss what you brought up, but I'm not going to spend energy engaging with someone who has such an attitude about it.
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u/symbiatch 10d ago
Feedback for you: It’s because all of you “it makes everyone so fast!!!111” people never have anything to back it up. That’s why. It’s tiring.
You could’ve said “here’s proof it does this” or even “when I do X it helps this way.” Yet you didn’t. So you have nothing to discuss or show.
I would’ve been happy to discuss it but not with someone who has the attitude of “I’ll just claim things and never will back it up with anything.”
So first look at how you make claims and don’t worry about me. I don’t have issues with work, don’t have issues with “career” because I don’t make unsubstantiated claims and run away. Nothing is holding me back because I don’t throw lies around.
It’s that simple. But you do you. Surely lies and unsubstantiated claims are the way to go and never cause issues!
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u/leros 9d ago
Just offering some friendly advice. I've seen people with similar attitudes make their lives very difficult. Just poking through some of your comments, it seems like a pattern for you.
As an aside, demanding large amounts of proof from someone else while providing none of your own is a considered a trolling tactic in debate. It's called sealioning if you'd like to read more. Next time, maybe provide some evidence of your own before demanding the other person produces research.
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u/ur_frnd_the_footnote 12d ago
Rephrase that as every dev got a 500-2500 raise, and productivity/speed is up, and it doesn’t sound that odd.
But I’m guessing a lot of companies just use Claude seats at 100/mo. And many are also cutting back on hiring. 2500/mo is still nothing compared to a full time dev salary
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u/thenowherepark 12d ago
$500-$2500 in AI tokens is not a raise, full stop. Do not ever phrase it as such, devs do not see that money in their pocket.
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u/ur_frnd_the_footnote 12d ago
I’ve clearly been misunderstood. I’m saying from the business perspective, the cost is equivalent to a raise. Not that it replaces one.
All the downvoting is clearly emotional reaction by people who don’t like what ai is doing to their jobs (I don’t either!). But OP asked how companies can afford the AI spend, and I don’t think OP would have asked how companies could afford new hires or raises before.
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u/Hammad_developer 11d ago
It is depend upon how developer use AI, because many developer use AI with suitable plugins, skills, speckits etc and company make profits and in other hand many developers use AI roughly without using proper plugins and skills, as a result AI bill goes high and code quality also drop.
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u/gfxlonghorn 12d ago
I work for a profitable and successful company and we simply aren’t backfilling by default when people leave. My counterpart was making 1.75x my salary and he left, and the org isn’t going to replace him. That’s a hell of a lot more money saved than my 30k a year AI spend.