"The Dog ate my Homework"

On the face of it, it is not drop-dead simple why Dropbox, the storage specialist for smaller and mid-size firms, necessarily benefits if we are entering a new era of computing some would logically call the “AI era,” and superseding the “mobile computing” or “cloud computing” era. 

Dropbox is most often used by companies with ten to 50 employees and $1 million to $10 in revenue, according to Enlyft. 

Nor is it clear why reducing Dropbox headcount by 16 percent, though perhaps an understandable response to slowing revenue growth rates, necessarily is connected to core tasks the company has to undertake to thrive in the next era of computing. 

To be sure, use of large language models and using generative AI presupposes processing of huge amounts of data and huge data sets, which of course requires lots of storage. 

Some note that a single LLM training operation can cost millions of dollars.

But training of LLMs is not something most smaller firms are going to be able to afford, so it is unlikely that Dropbox would see much revenue upside from serving that function. 

Likewise, training and inference operations will require lots of new processing cycles. Perhaps Dropbox believes it has an opportunity to provide such intensive compute support for its current customer base. 

Perhaps something else is partly at work. Retailers, for example, often explain poorer financial results by pointing to bad weather that kept shoppers away, or unusual weather that depressed demand for products with a seasonal purchase pattern. 

As true as that might be, it also is a convenient excuse. 

Some argue a wave of layoffs in the technology business is as much about doing what competitors are doing as much as anything else, aside from the argument that firms over-hired in the wake of the Covid pandemic. 

Business customers often do the same thing, arguing they must spend to “digitally transform,” become more agile, innovate faster or apply technology to reduce costs or remake product values. 

There still is a rational argument to be made that if firms expect lower revenues in the near future, then cost cutting makes sense. Cost cutting to preserve profit margins also makes sense. 

On the other hand, the stated rationale for any set of actions, strategies and tactics also includes a healthy dose of “because that is what people expect us to say or do” behavior. 

The “we need to get ready to invest in AI” argument is fairly new, though.