Remuneration: Policy Watch - 4As

Agency remuneration, particularly when it comes to AI use, is likely to become a lot more topical, mainly because of the emerging debate as to whether or not AI is going to get a lot more expensive for companies to use.

The question agencies must consider: if remuneration for AI use was a difficult conversation with clients at the “cheap” price, what does it look like at the “real” price?

Currently, many AI companies are operating at enormous losses.

The subscriptions they’re selling aren't coming close to covering their costs.

Let’s remember, Amazon didn’t turn a profit for almost the first decade of operating. Many observers would point out that the cost of scaling-up in a capital intensive industry front loads a lot of costs, and once those costs are dealt with, profitability is inevitable.

While that may also be true when it comes to AI, AI is facing some unique headwinds. Public opposition to large data centers continues to grow across America, with more and more Republicans campaigning on promises to stop them, while Democrats have typically been more opposed on environmental grounds to begin with, although not uniformly.

Beyond the more well-known issue of data centers driving-up electricity costs for voters at a time of angst over affordability, there are also increasing indicators that the era of cheap water, particularly in the West, is over.

If the cost of developing and running data centers explodes, the cost of using AI will have to rise for companies.

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