Yes to expensive AI agents 💰
Also: The Take It Down Act that Trump is very excited about is probably not it.
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
📈 Trending Up: China? … AI search … the agentic wars … developer freedom … Broadcom, after earnings … local blowback … AI design … SpaceX’s ability to catch falling buildings … private moon landings …
Amplitude is one of my favorite public companies, and its CEO, Spenser Skates, was recently featured in The Information. n.b. CEOs that lend their time to scribblers to explain things earn kudos.
📉 Trending Down: HPE, after earnings … HPE’s staff levels … semiconductor stocks … the bitcoin reserve, which is just a new government account … free speech … Scale AI’s labor practices … Starship’s ability to stay in one piece …
Cloud stocks, which are nearing a bear market. Before trading today, the Bessemer Cloud Index is off 17.8%, putting it deep into correction territory and just a few points off the 20% threshold required to trigger a technical bear market for the basket of equities.
That’s awful for potential cloud IPOs. Which, I think, encompasses most waiting unicorns.
Jobs data!
February jobs data from the United States was a mixed bag. On one hand, the nation only produced net +151,000 jobs in the month, under expectations of +170,000. January data was revised down a touch (to +125,000). Unemployment (U-3) picked up to 4.1%, while U-6 unemployment rose from 7.5% to 8.0%, a big increase for the broader definition of unemployment.
So what’s the good news? Slower employment growth and worse unemployment numbers give the Fed more room to cut.
What the February data does not do, however, is change the narrative. Folks dying on the vine for rate cuts could have used a less salubrious print, while folks who want to see faster employment growth now are likely disappointed as well. The pieces on the board haven’t moved much.
We could be heading for a more extreme March dataset that could better change the tone — perhaps even set the tone — for the next few quarters.
For example: Discord is starting to prep an IPO. Will it want to list when cloud stocks are at/near ATHs, or when they are about to crack a 20% drawdown?
An error in the making?
Using AI to create non-consensual intimate imagery (NCII), or what is often called ‘deepfake porn’ is getting stupid easy, 404Media reports. Folks are sufficiently determined to use AI models to create sexually explicit imagery, and the built-in guardrails built into models are being found insufficient. And that means people are using AI models — even against their putative terms of service — to create and post/share explicit images and videos of other people without their permission.
It’s a real problem. Amongst adults, amongst kids in school — everywhere. But the Take It Down Act that Trump is very excited about is probably not it. The EFF argues that while “the distribution of non-consensual intimate imagery” is a “a serious problem,” the “notice-and-takedown system [the Act] creates is an open invitation for powerful people to pressure websites into removing content they dislike.”
It’s not a theoretical point coming from a think tank. President Trump specifically said that he intends to sign the bill, and use it to go after critics. From his speech of a few days ago:
[T]he Senate just passed the Take It Down Act. […] And once it passes the House, I look forward to signing the bill into law. […] And I’m going to use that bill for myself too, if you don’t mind, because nobody gets treated worse than I do online, nobody.
That’s pretty clear, I think. And bad for free speech and the free press. It’s good to go after NCII being shared online. It’s not good to greatly empower censorship in the process.
High-priced AI agents are a good idea
The Information’s reporting that OpenAI is considering charging between $2,000 per month for agents that handle knowledge work, around $10,000 monthly for a “mid-tier” software-writing agent, and even more for “PhD-level research agents.”
Good. Lots of folks pointed out that at the $10,000 per month price point, OpenAI could charge more for its AI agents than some humans are getting paid today to do the same work. This was usually framed as a “What is OpenAI thinking” sort of complaint.
Consider, however, that if AI agents are expensive they not only have to be exceptionally good but also leave room for humans to do some of the work. It might seem a bit cruel to say that AI agents may only leave low level and cheap work for humans, but I submit to you that humans having some jobs is better than none.
The easy counterpoint to my argument is that if high-end agents cost $10,000 per month this year for coding work, they will cost $1,000 per month in a year’s time. (More on the 10x compression point here from Sam Altman). At that point, yeah, no more jobs.
“Most human intelligence work is going to be obsolete in two years. So I have two years to make something happen. Meaning I need to swing as big as possible and I don’t have the time to work two years in a big tech job, nor do I want to anymore…by the time I graduate, these LLMs are going to get advanced enough to the point where there is no significant intellectual work that I could produce value for society.” — Colombia student Roy Lee after using AI to beat interviews from Big Tech companies and getting caught.
CO has a lot more to say about AI wrappers and the economics of AI search. Expect to hear from us again later today (or tomorrow).