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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

#141

Post by seanp2k2 »

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…

>The bottleneck has moved from producing a thing that works to knowing that the thing was the right thing to build

I would argue that that's been the case for quite some time before AI. As an example, what innovative amazing world-changing products have Google or Meta launched in the past decade with their very high numbers of very talented and highly-compensated engineers? The issue with most big tech companies are leadership, strategy, and product direction. I'm not saying that they don't make any profits, just that they probably aren't "building [the right thing]".

AI for product development and management would be far more impactful than automating rote coding tasks / building React UIs that mirror API structures IMO.

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

#142

Post by whatshisface »

layer8 wrote: post #120
regularfry wrote: post #107

Earlier quoted context omitted.

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.

There were no knowledge workers in the middle ages.

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

#143

Post by HDThoreaun »

swatcoder wrote: post #123
HDThoreaun wrote: post #60

Earlier quoted context omitted.

Source on 200 million knowledge workers worldwide? My understanding is that it's just above 1 billion. I dont think a billion subscriptions at $1000/yr is out of the question but it might take a decade to get roiling

You're suggesting that 1 in 8 people worldwide, including every one from infants and the elderly, are knowledge workers. Are you sure that's what you mean? I'm not even sure that 1 in 8 people I know would qualify as a knowledge worker, let alone a knowledge worker that might profoundly benefit from on-the-horizon AI. And I'm in a highly skewed population.

Well around 40% of people work. I dont think its crazy to say around a third of jobs are knowledge jobs, but what do I know

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

#144

Post by radicaldreamer »

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…

If knowledge workers get laid off in mass, you can expect political curbs on AI adoption.

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

#145

Post by righthand »

aerhardt wrote: post #132

I find this analysis confusing. PMF for coding was likely reached some time last year. Profitability, which is different, we don’t know. The article kind of confuses both without making a strong economic case or using numbers in a compelling way. I don’t understand what the Uber case has to do with this either. The Uber COO clearly said that at least in terms of ROI he’s not seeing the results either. My take is the…

It’s not supposed to be logical, it’s an LLM evangelism blog that rarely, if ever, has any critical analysis that isn’t pro-industry. Read any/all of the other posts and you won’t find much skepticism but you will find a lot of shilling how great it all is.

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

#146

Post by kgwgk »

mesmertech wrote: post #101
kgwgk wrote: post #24

Earlier quoted context omitted.

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 a…

> I still think I'd be using

That's fine. Other people may not want to pay 300x more and will rather make do with last year's SOTA.

> For coding you always want to go with the best model

Maybe you meant "For coding I always want to go with the best model"?

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

#147

Post by xnorswap »

simonw wrote: post #16
prepend wrote: 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?

Have you or I misunderstood the "teams" plan?

edit: I missed the "enterprise" feature matrix with the usual audit/compliance stuff to force the biggest enterprise customers onto enterprise plans. Otherwise the "teams" plan is much better value for any business.

orig-continued:

https://claude.com/pricing/team

Teams premium is "Everything in standard, plus more usage*"

And from my experience, it's a very generous usage, I've only hit the limits once or twice, and both times required multi-boxing agents.

I could single-window agentic development all day on opus-4.7 auto-mode without hitting limits.

If you're a business using claude, then that seems like the right plan, the enteprise/API plan seems more suited to where your product is built on top of the agent themselves, so seats/limits aren't really meaningful?

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

#148

Post by hansmayer »

solenoid0937 wrote: post #138
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…

> 20% if you're a developer. That's a _huge_ shift. Most people I know cite +20%-40% velocity with these tools, against the actual work their company cares about doing. +20% speed for +20% spend isn't going to motivate a trillion dollars a year in spending. Of course it will. The value of an employee is a multiple of what they get paid. If you pay an employee $500k and they make $2M for your company (like Meta), then…

[dead]

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

#149

Post by duped »

hansmayer wrote: post #128

> Anthropic are strongly rumored to be about to have their first profitable quarter No, its more like their own leak to WSJ and according to Ed Zitron -> seems to be heavily engineered via non-GAAP practices such as counting potential , but not realised revenue as actual revenue - the stuff for which I would be arrested if I did it at my company. Also it appears according to Ed's analysis - strangely they seem to be…

AI companies/users are filled with liars and grifters, so any numbers/outlook they report should be highly suspect.

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

#150

Post by Havoc »

What baffles me is the range of estimates.

Operating profit is both post depreciation and fees paid to third parties for hire. So aside from shenanigans like RSUs and financing interest that's already somewhat close to actual economics.

Meanwhile we've got commenters here talking of 5-10 trillion with a T revenue shortfall.

Those are very different takes on reality

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