alt Hacker NewsMost large corporations treat these categories of employment as different budget line items with different rules and limitations: (1) full-time employees, (2) individual contractors, and (3) large contractor "body-shops" or outsourcing providers. Many times in my career, I have seen layoff a few from (1) then way over spend on (2) or (3). The mid-level manager who makes the decision gets to "claim" that expenses were reduced in (1) and "win" at year-end reviews. Yes, I know: This is total non-sense, but I have seen it many, many times at mega-corps.
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(1) is considered a cost while (2) and (3) might be called an investment. Company can lie to investors that (2) and (3) costs could be removed at any time without interrupting any important business processes.
Related to this, the massive advantage of AWS is that it allows staff to buy infrastructure without having to raise purchase orders. If you ask permission for spending, it's a very onerous and frustrating process. If you just deploy stuff and get billed for it, it's much easier! Even if that's more expensive than having your own cloud. Worse, if you have on-prem, you have to have staff. They might even be permanent. Businesses hate having to have important staff.
Not coincidentally, this results in massive overspend until someone notices and has to painstakingly go round checking what all your instances are for. And AWS is very profitable (well, margin rather than accounting profit).
Now, look at the billing model of AI, especially once flat rate goes away. People can spend millions on tokens without ever having to ask a manager! Obviously this is going to rake in money hand over fist, because it will be years before anyone catches up to ask "are we actually getting value for money here?" rather than "quick spend more tokens".