Enterprise AIStratechery

Mythos, Muse, and the Opportunity Cost of Compute

Read original

Why I picked this

brilliant read

ai-policymarket-consolidationregulatory-impact

The era of Aggregation Theory is behind us, and AI is again making technology expensive. This relation of increased cost from increased consumption is anti-internet era thinking.

Key takeaways

  • Reasoning models (o1) fundamentally break Aggregation Theory by reintroducing marginal costs - compute scales with usage, unlike internet-era products
  • Hyperscalers' business models were built on zero marginal cost assumption; AI inference costs challenge this foundation requiring new economic models
  • The 2010s internet era may be viewed as anomalous 'naive time' - technology returning to capital-intensive, high-marginal-cost paradigm of pre-internet era

Why this matters for operators: Companies building AI products need to rethink unit economics and business models fundamentally different from internet-era playbooks

I cover AI×GTM intelligence like this every Wednesday.

Get STEEPWORKS Weekly

More picks

AI Developmentn8n Blog

Human-in-the-Loop vs. Human-on-the-Loop: When To Use Each System

  • HITL (human-in-the-loop) requires human approval before AI executes critical actions - synchronous control pattern used for high-stakes decisions, compliance requirements, and low-confidence scenarios
  • HOTL (human-on-the-loop) allows AI to execute autonomously while humans review results and adjust parameters - asynchronous pattern for scalable operations with exception-based oversight
  • Framework applies across use cases: loan approvals, customer emails, social posts, fraud detection, and compliance workflows - choice depends on risk tolerance, regulatory requirements, and operational scale needs
automation-stacksai-policyhuman-first-sales

This analysis was produced using the STEEPWORKS system — the same agents, skills, and knowledge architecture available in the GrowthOS package.