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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

#101

Post by mesmertech »

kgwgk wrote: post #24
mesmertech wrote: post #15

Earlier quoted context omitted.

For coding you always want to go with the best model in the category, not something that would be the best model if we went 1 year back which GLM 5.1 is, and I'm saying that as a big fan of GLM cause I run a translation site where GLM is good enough for the price. Most of the money right now is in coding. Openai and Anthropic just have to be 6 months ahead of SOTA open source models and they'll capture most of the en…

For coding like for everything else in life cost is a factor.

Cost for the value delivered. Like if you offered the current SOTA open source models at $0.1/M, I still think I'd be using Opus or 5.5 at $30/M. Or say GPT 5 which was released Aug 25, I don't think I'd use it for coding for even $0.1. I'd def find other uses for it(translations, agentic workflows, prompt guards etc), but for coding I don't think I'd ever completely switch to a SOTA open model

Unless ofc there was an actual speed difference, only reason I'd be willing to go with a worse model couple of percent worse than current best model is if the speed was at least 5x higher. Looking forward to kimi k2.6 offered publicly by Cerebras

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

#102

Post by peder »

binary0010 wrote: post #12

So how do openai and anthropic plan to keep customers when GLM-5.1 is just as good and open source and a lot cheaper? I don't see the business model working. My closest friend actually does automation software for large companies. He does not use Claude or openai at all. He primarily uses gpt 120b on cerebras and glm-5.1 for heavy thinking work. And some other small models for various tasks. All open source. And thes…

> I don't see the business model working.

Same. It's a nightmare from a Porter's Five Forces perspective.

There will be a ton of businesses competing in this space, and there will be something of a moat due to how capital intensive the business can be, but there will still basically be infinite competitors.

Great for consumers.

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

#103

Post by windexh8er »

HDThoreaun wrote: post #88
rootusrootus wrote: post #73

Earlier quoted context omitted.

A billion? Really? At 200M you’re already including a lot of people that stretch the definition of knowledge worker.

> At 200M you’re already including a lot of people that stretch the definition of knowledge worker. How do you know this? Im certainly open to recalibrating my numbers which is why I asked for the source

What's your source, because it looks wildly out of proportion compared to numbers we have now.

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

#104

Post by simonw »

NortySpock wrote: post #96

"[would have spent] $1,199 with Anthropic, $980 with OpenAI" How many tokens is that, input/output-wise? (a) I'm curious if you feel like you got $2000 worth of value out of them in the last month? (b) I'm also curious if you would have gotten similar quality out of a slightly lower-cost provider of an open-weight model? (e.g. Kimi K2.6 and DeepSeek v4 Pro) and what the spend would have been for that. I myself have m…

Claude Code:

  Input tokens:        52,545,485
  Output tokens:        5,767,253
  Cache create tokens:  5,112,029
  Cache read tokens: 1,475,069,465
  Total tokens:      1,538,494,232
  Total cost:        $1,199.79
OpenAI Codex:

  Input tokens:          52,598,013
  Output tokens:          4,681,867
  Reasoning output:       2,091,063
  Cached input tokens: 1,153,844,864
  Total tokens:        1,211,124,744
  Total cost:          $980.37
I'm confident I got value out of OpenAI - I've been mainly on Codex for the last few weeks.

Not so sure I got that value from Claude, just because I've been using it a lot less and somehow the price came to about the same as OpenAI.

Given the code I've been able to build in the past month I genuinely do think I got value for the API price version, and (don't tell OpenAI or Anthropic) I think I'd have paid full price.

I've not spent nearly enough time with GLM-5.1 and co to compare, but I do know that the prompts I'm using with the agents are not prompts I would have expected to work just three months ago.

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

#105

Post by paxys »

browningstreet wrote: post #80
trjordan wrote: post #11

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…

Somehow Uber and WeWork survived the same kind of grand projections that they never met.

WeWork absolutely did not survive

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

#106

Post by freakynit »

onlyrealcuzzo wrote: post #62
trjordan wrote: post #11

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…

> We're talking about a world where you need 5% of every knowledge workers salary to go into tokens. They are assuming ~10% global GDP growth instead of ~3%. You probably don't need the same %s if the pie grows a ton. I'm highly skeptical we get that growth, but if you aren't, it makes it easier to digest.

I mean this case with AI-productivity fires itself back when we talk about GDP.

The more AI causes productivity increases, the less and less number of workers will be needed. This will heat up the job market even more and bring salaries down.

Net effect of this productivity increase: less consumption by the masses, even though you may be producing more good and much more efficiently.

A third effect also comes into play that once all this starts to happen, common people, who are generally living paycheck to paycheck, will now start to hesitate towards making any long term investment, housing included. And that indirectly will end up impacting financial and banking sector, which will then impact existing savings, bonds yields and retirement funds, and the recession-like cycle starts.

This productivity increase only makes sense if it is capped to a very small number.. like 20% max. Beyond that, who these companies will even be selling to?

Am I overthinking all this?

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

#107

Post by regularfry »

trjordan wrote: post #11

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…

The bottleneck has moved from producing a thing that works to knowing that the thing was the right thing to build. The more of the latter they can take on, the fewer knowledge workers are needed at all. So rather than 5% of every knowledge worker's salary going into tokens, 100% of the knowledge worker's total employment cost goes into tokens and you get a 20x productivity boost as a theoretical minimum across those tasks.

That's the game. There's a view you could take of this that this is just a growing of the pie: with those cost dynamics a lot more "small businesses" get a vast amount of leverage, so the overall economy grows without replacing the knowledge workers. I'm not sure I trust the MBA class to have that view.

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

#109

Post by roomey »

simonw wrote: post #39
OrangeDelonge wrote: post #32

Earlier quoted context omitted.

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

That doesn't seem to be the case. From what I've seen enterprise deals get API pricing now. Have you seen evidence that's not true?

Hi Simon, nice article. The parent there may be making the same assumption I am, that large enterprise _never_ pays sticker price.

Also, to just color in the picture here, as I haven't seen it mentioned elsewhere, there is a very large Saas company at the moment who has given everyone unlimited tokens on Claude. And they have a dashboard showing who spends the most. So the "budget" went from about USD500 per per person (split between Claude and cursor) in Jan to... Well a soft limit of USD100k... Per month... Per person.

People can still see the top line sticker price on their spend, but honestly I can't believe that the Saas is paying that full price when the invoice comes in.

That said, there are some finance reports which are probably dropping soon where we will find out!

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

#110

Post by rubiquity »

I think it's fair to say they had achieved product-market fit when their revenues were growing deep triple digits month over month. What we're seeing now is that perhaps they have achieved profitability or at the least a more sustainable balance sheet.
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