The difference between what the employer makes per employee and what they spend in compensation doesn't matter. If the increase in productivity isn't greater than the increase in cost, there isn't a reason to pay for AI over hiring more developers.
replyImagine an employer with 10 employees paying $500k per employee and making $2M per employee in revenue (to use your numbers). They could hire two more employees and spend an extra $1M (+20%), but make an extra $4M in revenue (+20%). Alternatively, they could buy all ten employees a $100k AI subscription, for a total of $1M extra spending (+20%) but an extra $4M in revenue (+20%). You'll notice both scenarios are identical, so an employer optimizing for profit would have no reason to prefer one over the other.
There’s a lot relationship and culture management overhead involved when adding 2 more people to a 10 person company. I think any business leader would take the productivity speed up from buying a tool over hiring more people and integrating personalities/habits/viewpoints to an existing established culture any day of the week.
replyYou're basically positing that the real cost of a 20% headcount increase is higher and/or the productivity gain is is lower than 20%. That isn't an unreasonable claim, but it's basically rejecting the premise here. You might just as well object to the premise that you can buy a 20% speedup by spending an extra 20% on tokens.
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