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I think Anthropic and OpenAI have found product-market fit

simonwillison.net

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Re: I think Anthropic and OpenAI have found product-market fit

#41
post #22

200$ per month per seat is nothing . A single 3D CAD license pack for the guys in our R&D group costs multiple thousands of dollars per seat, per month. It's about time software seats get some love too.

Yeah, it’s nothing, and it’s also not the cost that enterprises are paying. As the article states, the price is $20 per seat per month, PLUS per-token API usage. Enterprises are paying consumption billing, not fixed rate oversubscribed “all you can eat per seat.”

Re: I think Anthropic and OpenAI have found product-market fit

#42
post #16
post #14

> $2,180.16 worth of tokens for $200 “Tokens” don’t have an intrisic cost or value. Saying that I used $2,180.16 worth of tokens is like relying on the salesperson to convince me I’m getting a billion dollars worth of pots and pans for $19.99. I think it’s funny how we are throwing critical thinking out the window when it comes to evaluating biased sources of info.

I'm not sure what you're pushing back against here. I spent $200. If I had been paying API pricing it would have been $2,180.16. The article is about how enterprise customers get charged API pricing, which means if I had been employed by one of those companies I would have cost them $2,180.16. What am I missing?

> If I had been paying API pricing it would have been $2,180.16

The point being made above is that API pricing is calculated... somehow... seemingly arbitrarily. Possibly untethered to the infrastructure costs entirely: which would be the basis of any 'value', however that holds the labor theory of value, which isn't accurate either. So how do you accurately price these tokens at all (other than through price-discovery: which is slow, messy and fuzzy)?

Re: I think Anthropic and OpenAI have found product-market fit

#43
post #33

The costs are exorbitant and most software is not produced by companies with such a huge moat. Anthropic made a profit through their recent bait amd switch pricing. There is zero useful insights online to indicate whether this might die due to commoditisation with good enough open models or fail the race to get more people subsidising unsustainable growth with other people’s money. Who knows? In any case they dont se…

Usage costs will come down with better hardware. Hardware is improving rapidly each generation.

Re: I think Anthropic and OpenAI have found product-market fit

#44
post #16

Earlier quoted context omitted.

I'm not sure what you're pushing back against here. I spent $200. If I had been paying API pricing it would have been $2,180.16. The article is about how enterprise customers get charged API pricing, which means if I had been employed by one of those companies I would have cost them $2,180.16. What am I missing?

Large enterprises make deals and won’t be paying 2,180.16$ either. Just like with AWS

The point is that those a real prices real people are paying for real API usage. it's not made up.

your point is large players won't pay those prices at massive volume. ok

Re: I think Anthropic and OpenAI have found product-market fit

#46

With deepseek and xiaomi mimo models slashing their prices 99%, I don't see a great future for openai / antrhopic with regards to their 1T valuations. Maybe 1T valuation will be the whole market, West + East.

They'll still have their dedicated enterprise customers. I think the Chinese providers will pull more of the single users who're paying their own way, than those backed by company budget. And it's a pretty good split as the demand becomes better distributed, resulting in better service (I'll never forgot must how bad access to Claude became until they got access to Colossus) and less potential for lock-in (we really don't want there to be a duopoly, etc on good AI).

Re: I think Anthropic and OpenAI have found product-market fit

#47

They've got, ballpark, $5t to $10t to make back in the next 5 years, or the hardware buildouts will start getting written down. This means we're going to need $1t+ per year in spending, per year, on tokens. 200m knowledge workers in the world, 30m developers. We're talking about a world where you need 5% of every knowledge workers salary to go into tokens. 20% if you're a developer. That's a _huge_ shift. Most people…

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Re: I think Anthropic and OpenAI have found product-market fit

#48
post #36

Does this analysis factor in potential caching of tokens on the server side? It seems that if they organize things well (as a model provider), they can save quite a lot on that. Looking at my Cursor statistics makes it clear that the token calculations are not at all trivial.

I believe the ccusage tool I used takes cached token pricing into account.

Re: I think Anthropic and OpenAI have found product-market fit

#49
post #22

200$ per month per seat is nothing . A single 3D CAD license pack for the guys in our R&D group costs multiple thousands of dollars per seat, per month. It's about time software seats get some love too.

AutoCAD is $175 per user per month [1].

[1] https://www.autodesk.com/products/autocad/buy

Re: I think Anthropic and OpenAI have found product-market fit

#50
post #19

They've got, ballpark, $5t to $10t to make back in the next 5 years, or the hardware buildouts will start getting written down. This means we're going to need $1t+ per year in spending, per year, on tokens. 200m knowledge workers in the world, 30m developers. We're talking about a world where you need 5% of every knowledge workers salary to go into tokens. 20% if you're a developer. That's a _huge_ shift. Most people…

Here is a serious question.. Can we sell into the hype cycle and on the way down with this: https://safebots.ai/costs.html

I asked claude to generate a frontend and it made the same template. Same san serif and serif fonts together. Same colors. Same typography. Same layout and animations even. It’s wild how similar it is. No not similar it’s the same damn thing.
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