220: The Dark Truth of AI as a Data Analyst

So there's a pretty dark future of AI that I don't hear a lot of people talking about, and no, I'm not even talking about all of the ethics of how AI is ruining the environment or how, you know, it's dehumanizing the world or that people are just trusting in all these all-powerful AI chatbots and making dumb choices. Although, we can argue those in the comments if you'd like. But for now, I'd really like to focus on these dark costs of using AI as a data analyst right now, or a data professional really. And for your career at this very second, I think, like, ChatGPT and Claude are fooling you. I think that if you're using AI heavily right now, it's either going to make or break your career and, uh, I'll give you all my arguments for that in this episode. But if you're new here, my name's Avery Smith. I'm a senior data analyst, and I try to make helpful content about the future of data careers and how AI and data play together. And if you're interested in that, which, let's be honest, you probably are 'cause you're here, right? Then go ahead and hit the subscribe button. But obviously, AI is here, and it's really revolutionary. Admittedly, I haven't written a line of code unassisted in probably, like, two-plus years now, and that's amazing. It's opened up windows I never even thought possible. It's made me a better, a faster data analyst and a developer, and it's allowed me to build helpful products for the data community like My Datafolio, which is an online data portfolio hosting platform, and findadatajob.com, which is my job site that I post lots of data jobs there. And you probably feel the same. Like, AI has really helped you in a lot of ways in your life. Like, maybe it's helped you look things up faster, like no more Google, right? Woo-hoo. Maybe it's helped you write SQL queries faster. Maybe it's helped you with your taxes, booked flights, whatever. I don't know, all sorts of different things. But for all those good things, I think there is a dark side that both you and I are really ignoring right now, and to our own detriment. And no, it's not the obvious one of you're actually learning the skills. I think that's important, but it's one that's much more hidden and much more diabolical. And it's important to know the skills. Like, if AI's doing something, you should be able to correct it. You should be able to know if it's actually giving you the right answers to confirm what's actually going on. And if you can't do that and you give that analysis to a stakeholder, then there's potential for a lot of big problems. You know, maybe that's a big loss in dollars, but it could be loss in time, productivity, or even lives at the worst case, right? So if you're relying heavily on AI right now, you might not be learning the core skills necessary to actually become a truly powerful data professional. And that is serious, and that is a problem, but you probably already know that. So what if I told you instead that there's even a bigger rug pull at play, one that you maybe haven't heard of yet, that there's something slowly spreading quietly in the AI and data industry that people are quietly whispering about, not really talking it out loud, and it's this: that the biggest players in the space, Claude and ChatGPT, are scamming us. They're setting us up for an epic realization that's going to leave us all shell-shocked and kind of screwed. And it's this: the current AI prices are fake, fugazi. They're literally artificial, and I totally mean that to be a pun. "But Avery, what do you mean?" Guys, these prices, they're subsidized heavily. Every time you send an AI, they are charging you one cent or something like that, but it's really costing them two to reply. These companies are literally losing money, literally burning it, and not just a little bit of it, a lot of it, millions and millions of dollars, hundreds of millions of dollars they're just literally throwing out the window, all in an effort to get us addicted, to get us hooked. And when we become reliant on it and we can't live without it, that's when they'll finally raise prices to what they actually should be And if you don't believe me, no problem, you know, don't trust me, right? A recent study showed that current AI prices from ChatGPT and Claude are subsidized by up to 70 times their actual prices. Meaning if you have a Claude Max plan or a ChatGPT Max plan like me, you're really getting like 20 times, 70 times the usage for what you're actually paying for. Meaning if you do the same amount of usage at actual break-even prices for these companies, you're literally going to be paying hundreds of dollars more than you are right now to do the same type of analysis, to do the same type of queries, to do the same types of chats that you're doing. So just come with me for a second and imagine that you don't learn the fundamentals of SQL and Python, and right now you're able to do some pretty decent analysis just with ChatGPT or Claude. You can do some pretty cool graphs. You can make some pretty cool scripts. You can do some pretty cool queries, and maybe it costs you $10 to generate all of these different reports that, what you want. Well, what happens down the road when you want to generate a similar report, but instead of $10 it costs you $700 to do something similar? Are you personally willing to pay that amount? Do the economics actually make sense for you in that case, and do they make sense for the company that you'll be working for? What you think you can do with AI right now for $100 will not be what you can do in the future for $100. You'll be able to do a lot less in the future. Now, how far into the future? I'm not going to just guess and give you the timeline, but there's a lot of hints being left right now. Both Anthropic and OpenAI have had discussions recently of IPO-ing and becoming a publicly traded company, and when that happens, their financials will get scrutinized a lot more. They have to actually publish all the different, you know, financials that public companies have to do, and when that happens, they will feel the public and shareholder pressure of this insane cash burning that they're doing right now. They will eventually need to have profit or at least way less loss than they're currently happening. They can't just continue to burn money forever. So this may be in just a few weeks, it may be in a few months, it may be even in years. I don't know. But I think it's going to happen, and there's a chance that these prices not only go up, but go up from what they are today, and it's important for you to know that. Now, why is that the case? Why are prices so high and why might they go higher in the future? Well, I think there's two key factors, basically, in all of AI: the hardware and the power for the hardware. Now, historically, hardware and computer chips have gotten cheaper over time and better over time, but that doesn't actually really factor in the idea of the demand that we're in right now. We've seen great demand for GPUs with cryptocurrency, with artificial intelligence. Demand is way up, and if supply can't actually meet the demand, we, you know, have an imbalance and we may see prices go up. Similarly, the power needed to power AI and all these, you know, data farms and all these compute farms, all these data centers around the world is going up, and the electricity prices are going up as well. Electricity prices in the US have nearly increased 50% in the last five years. As you can see from this graph right here, it is a crazy big increase, and I don't really think there's any sign of this increase stopping. Like electricity is just going to get more and more expensive, and as it does, so will the price of AI, unfortunately. So what's actually my point here? Well, if you think that you can use AI to do data a- analytics for the rest of your life and the rest of your career, you may be right. There's also a chance that you'll actually be using it less than you think. If the prices make it uneconomical for companies, they will have to take action and take quick action. We've actually already started to see it, whether you actually have heard about it or not. Microsoft, obviously a huge tech company, literally cut their engineers from AI because of how big the bill was. Uber is now capping their employees after they blew the entire AI budget for the entire year in one quarter. And even tech giants like Meta and Amazon are feeling the costs, and if they're feeling it, we're all probably feeling it as, you know, smaller fish in the pond. Now, that's not to say that you should just start ignoring AI and just do all your SQL queries and Python code by hand, because you really shouldn't. I think that's a big mistake as well. AI is going to be used in the future, and you as a data professional need to be paying close attention and getting practice on it. But at the same time, maybe you shouldn't be token maxing and just, like, running up your AI bill like crazy without actually having foundational knowledge of what you're actually doing and what you're actually building. It's really a delicate balance to use AI enough to stay dangerous, but not use it enough that you become dependent, and it's a balance that I'm exploring on my own as well, and I'm actually gonna be talking about it a lot in my newsletter. So you should consider subscribing. 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