Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

I think Anthropic and OpenAI have found product-market fit

simonwillison.net

Post reply on HN
Print view View original

111–120 of 1001 posts

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

#111

Post by jmyeet »

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…

YEPPP... and I'm kind of shocked at how many people can't do simple math.

Let's put it context. Google's annual revenue seems to be north of $400B. So if OpenAI suddenly had Google's revenue, it would still be insufficient to recover their investment.

and it's a ticking time bomb because $1T in servers, CPUs, GPUs and memory is going to be worth $200B in 5 years. You can say they can keep using what they've got. Sure. But they're also not going to stop spending on new hardware. And the competitor that comes along in 5 years and spends $1T doing the exact same thing is going to have a huge advantage.

OpenAI at this point reminds me very much of the Russ Henneman pre-money hype cycle.

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

#112

Post by windexh8er »

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.

The difference is that they had room to charge more of their customers and pay less to their workers. The AI industry doesn't have both sides to play at this point. Training and inference are getting more expensive and if you take on the high prices now you're just floating yourself further downstream from profitability long term (which does not look viable for any of them currently).

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

#113

Post by tapoxi »

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.

I don't think Uber was doing $1 trillion in infrastructure spend.

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

#114

Post by thewebguyd »

zuzululu wrote: post #10

Great article I know this upsets a lot of people who are used to thinking Anthropic/OpenAI are just lighting cash on fire but they've cornered the market on enterprise who cannot walk away from these $200/month plans However the valuations are still far far away from actual sanity

> enterprise who cannot walk away from these $200/month plans

Any org with more than 150 users aren't on $200/month plans, they are forced into API pricing + $20/month/user

For individuals and orgs small enough to get to use the subscription plans, that's all well and good until usage limits keep going down, or cost goes up. If you compare the usage you get on $200/month maxed out vs. what that would cost at API pricing, the $200/mont plan is an absolute steal. I doubt it will last long.

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

#115

Post by seniorThrowaway »

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.

[dead]

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

#116

Post by naravara »

121789 wrote: post #95
browningstreet wrote: post #80

Earlier quoted context omitted.

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

uber sure....but how did wework survive? they are a smoldering husk of a failed company looted by its founder

The company’s gone but the assets just got sold to other commercial real estate firms.

Uber was basically only ever software to help people use their own cars so a very small part of their valuation was physical stuff to upkeep, it was just deals and obligations they had.

Not sure how it shakes out for Anthropic and OpenAI. There’s a lot of physical capacity that needs to be built out and can depreciate. But there’s also a lot of network effects and dependencies being built in with enterprise users.

I don’t know how swappable the tooling is either. I think over the long term the UI, model training and documentation, and infrastructure are going to end up being run by different parties and I’m not sure which leg of that chain ends up in a position to skim most of the profit off. My guess is that Apple and Google end up raking in all the money since they control the OS and app stores while the rest of the stack gets driven down to being generic commodities. At least where mass market consumer adoption is concerned.

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

#117

Post by TimTheTinker »

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…

I thought Anthropic and OpenAI's combined CapEx has been source: https://isaiprofitable.com/

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

#118

Post by simonw »

freakynit wrote: post #106
onlyrealcuzzo wrote: post #62

Earlier quoted context omitted.

> 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 pl…

> The more AI causes productivity increases, the less and less number of workers will be needed.

That only holds if companies have a fixed need for "productivity" which is met by their current employees, such that their employees becoming more productive means they need less of them.

Every company I've ever worked for has wanted to achieve way more than they are able to get done with current resources.

But generally yes, the biggest open question about all of this is how the impact will play out on the economy, job opportunities etc. I've not seen anyone come close to a confident prediction about how this will play out.

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

#119

Post by Havoc »

mesmertech wrote: post #13

If nothing else this blog did give me the idea that I should split my $200 claude max plan into two $100 CC max and $100 codex plan, esp because Claude is now offering 1.5x weekly limits so its the 5x usage is now more like 7.5x usage.

>I should split my $200 claude max plan into two $100 CC max and $100 codex plan

You may want to get one of them to check the math on that :p

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

#120

Post by layer8 »

regularfry wrote: post #107
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…

Who pays for that value, and from what, if all knowledge workers lose their jobs?

It sounds like the economy would largely reduce to the small minority class of independently wealthy people.

Post reply on HN