
Primitive Architect
135 posts

Primitive Architect
@paris_steff
Trying to understand the primitives of the system. Everyone else debating the UI.




🦔Goldman Sachs reports that companies are blowing past their AI inference budgets by orders of magnitude, with inference costs in engineering now approaching 10% of total headcount costs and potentially reaching parity with salaries within several quarters. KPMG surveyed 2,100 senior leaders and found US companies plan to spend an average of $178 million on AI over the next 12 months, with Asia-Pacific firms budgeting $245 million and EMEA $157 million. The two reports together show companies are spending more than planned and intend to spend even more. My Take Inference costs approaching headcount parity is an extraordinary number that most finance teams did not model when they approved their AI strategies twelve months ago. The compute crunch, electrical component shortages, and GPU spot prices up 48% in two months are all flowing into corporate operating costs faster than anyone budgeted for, and Goldman's trajectory suggests it accelerates from here. What I find hard to reconcile is that $178 million average sitting alongside enterprise data showing eight in ten workers are either avoiding AI tools or not using them at all. Companies are committing to nine-figure inference budgets while their own employees aren't using what's already been deployed. I've watched this dynamic build all year and my honest read is that a significant portion of this spending is driven by competitive fear rather than demonstrated returns. Nobody wants to be the company that didn't invest in AI when everyone else did. That's how bubbles get funded, and at some point boards are going to demand a number that justifies it. Hedgie🤗


Massive bubble? Nasdaq forward PE ratio below the 10-year average.


If AI lives up to the hype, it will erode the traditional long term moats of technology companies. As a result, no one with a brain wants to pay for cashflows far in the future. These multiples cannot come back unless AI turns out to be a toy.


⚡️Anthropic is quietly strip mining the knowledge work economy and smiling while they do it. Every product launch from every frontier lab follows the same pattern now. Announce a new capability. Frame it as helpful. Bundle it into existing subscriptions. Watch another professional category collapse over the following 18 months. Claude for Word eliminated junior paralegals. Claude Code eliminated junior developers. Now Claude Design eliminates junior designers. The pattern is identical each time. A beta announcement. A demo video. Thousands of people posting “this is incredible.” A small group of people in the affected industry posting “this is fine actually, the complex work still needs humans.” And then six months later headcount reductions start showing up in earnings calls. The entire design industry from Figma down to individual freelancers just watched their market get compressed in real time. The freelancers on Fiverr offering “I will design your slide deck for $50” have a business model with a finite runway now. They just don’t know how finite yet. The ones that paid attention to Adobe’s trajectory over the last year have some idea. The ones that didn’t will find out when the gigs stop coming in. The truth is that every major lab is racing and the race is structurally unwinnable to slow down. Anthropic cannot unilaterally pause capability research because OpenAI won’t. OpenAI cannot pause because Google won’t. Google cannot pause because Meta and xAI and Chinese labs won’t. The game theory forces every player to move as fast as possible while maintaining enough safety theater to prevent regulatory intervention. That’s what’s actually happening. The safety discourse is real at the research level and functionally cosmetic at the deployment level. Because the deployment level is where the revenue comes from, and revenue is what funds the next capability jump. Every white collar worker currently sitting in a cubicle producing routine deliverables on a predictable schedule is in the target zone. They don’t know it yet because their job still exists today and their paycheck still clears. But the product that eats their job is being built. Possibly shipped. Possibly already in beta. They just haven’t encountered it yet because their manager hasn’t figured out it exists or their company hasn’t worked out the implementation or the IT department is dragging its feet on procurement. Each of those delays is temporary. Each of them resolves in the direction of replacement.


Introducing Claude Design by Anthropic Labs: make prototypes, slides, and one-pagers by talking to Claude. Powered by Claude Opus 4.7, our most capable vision model. Available in research preview on the Pro, Max, Team, and Enterprise plans, rolling out throughout the day.


Introducing Claude Design by Anthropic Labs: make prototypes, slides, and one-pagers by talking to Claude. Powered by Claude Opus 4.7, our most capable vision model. Available in research preview on the Pro, Max, Team, and Enterprise plans, rolling out throughout the day.


True, and the exact opposite of the constant claims to the contrary, but precisely what you’d expect from a huge surge in productivity.





Introducing Claude Design by Anthropic Labs: make prototypes, slides, and one-pagers by talking to Claude. Powered by Claude Opus 4.7, our most capable vision model. Available in research preview on the Pro, Max, Team, and Enterprise plans, rolling out throughout the day.


Sequoia's thesis that the next $1T company will sell work, not software, is the most important reframe in AI right now. The argument: if you sell a copilot, you're competing with every new model release. But if you sell the outcome — books closed, contracts reviewed, claims handled — every AI improvement makes your margins better, not your product obsolete. The key insight most people miss: for every $1 spent on software, ~$6 is spent on services. The entire SaaS playbook was about capturing the software dollar. The AI playbook is about capturing the services dollar — at software margins. Not "AI for accountants." The AI accounting firm. Not "AI for lawyers." The AI law firm. The companies that figure this out won't look like SaaS companies. They'll look like services firms rebuilt on software infrastructure. That's a fundamentally different company to build, fund, and scale. And most founders are still building copilots.


Anthropic CEO Dario Amodei: “50% of all tech jobs, entry-level lawyers, consultants, and finance professionals will be completely wiped out within 1–5 years.”



Every friend I talk to is overworked since AI. Working weekends. Always on their phone prompting. Kinda sad.












