The Zero Cost Fallacy
The world has been getting all excited about the latest version of Open AI’s image creation tool.
It does look really impressive. At least superficially.
It might not suit the wider narrative around these kinds of technologies, but there is a lot of problematic stuff being said. The big concern I have is about the increasingly common narrative around production costs for advertising and communications. And that these tools will mean production costs drop to near zero or to zero.
Some very smart people seem to be keen on pushing this story. Are these people being willfully ignorant or am I missing the point?
It strikes me that there is cost to be observed everywhere you look where these tools are concerned.
The Open AIs and the Anthropics of this world are not profitable. Not even close to being profitable. They are burning through money rapidly - and it is not clear that the capital they’re investing hasn’t reached a point of diminishing returns. Their products cost more to maintain and to operate than they’re currently able to charge for their use….
And then there is the question of data. These services have to be trained on data to be useful - they’re not originating work in the way that an artist does. They are effectively tracing the work of others. Where does that data come from? In the case of the latest Open AI release, many people seem to have jumped on creating imagery in the style of Studio Ghibli. It took 60 animators nearly seven years to make The Boy and the Heron. Now you can produce a single frame in the same style with the input of a couple of prompts. Open AI have long argued that they have to have free access to copywrite protected material to make their tools work. That doesn’t sound like there is a viable business model to me.
Lastly, whilst the cost of access to Open AI’s 4o Image Generator might currently be low. What is to say that in the future, once a physical production sector is decimated, that Open AI won’t increase the cost of access exponentially - just as we’ve seen with taxis and Uber. Build and capture demand by undercutting the competition and then hike prices when the customers have no choice.
It’s a convenient pitch to brands and advertisers that the cost is zero, but in reality this is a fallacy. There is cost everywhere you look.
