Item — HN Reader

My read of this:

Their AI costs have increased 600% but this hasn't translated into actual revenue. Also they are probably projecting AI costs to keep growing. They've done the math and at some point it is going to affect their bottom line.

Reducing or limiting AI usage would be inconceivable given Cloudflare itself has invested on AI and is selling AI services. Instead they've opted for reducing about 20% of their head count.

2 comments

I don't think so. I think this is a common narrative in Hackernews when layoff news are shared. All the people I talk to in the industry positively confirm a boost in productivity. Its contribution to actual revenue could lag but it is present and confirmed by many.

It has boosted my productivity in my side projects but its nothing I can monetize. Maybe companies have the same problem.

Which public companies that do NOT sell AI have posted that AI has boosted their revenue?

I feel new startups, features and more services coming online would be a good measurement of this amazing productivity boost we're seeing.

Have you noticed a major improvement in every service you pay for ? Like many new features and incredible improvements in user experience and reliability? Because I’ve not really noticed that. Actually, things seem to be offline more than they used to, namely GitHub.

I am definitely more productive at generating lines of code though which definitely gives me the illusion things are mOvInG rEaLly FaSt.

Nah, even insane token costs don't come close to the costs of labor.

Most likely this is just 'AI-washing' - dressing a layoff for economic reasons (such as propping up their shrinking margins) as something more palatable to investors (AI).