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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

#231

Post by surgical_fire »

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…

Also, if I understand correctly, they are rumored to have a profitable EBITDA.

It's a funny metric considering Depreciation is a huge cost for them.

"We are profitable when we don't count our expenses"

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

#232

Post by simonw »

_verandaguy wrote: post #196

With respect to Simon, whose writing I've usually agreed with in the past and whose insights I've liked: this is a bad take that overlooks the extent to which corporations are imposing the use of AI on employees, and in particular ICs, who make up a majority of the AI-using workforce by headcount. Many of us are either openly having our performance reviews tied to AI use, especially at larger enterprises. Whether tha…

Are you saying that Anthropic's huge leaps in revenue are caused by stupid company policies and token leaderboards, and the moment companies stop imposing AI on their employees revenue will drop to a point where Anthropic are unlikely to be profitable?

I don't think that's the case. I think the token leaderboard thing (which is clearly ridiculous) affects a tiny portion of companies and is already going out of fashion.

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

#233

Post by alexchamberlain »

simonw wrote: post #178
righthand wrote: post #145

Earlier quoted context omitted.

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.

308 posts on AI ethics: https://simonwillison.net/tags/ai-ethics/ 52 on AI misuse: https://simonwillison.net/tags/ai-misuse/ 149 on the unsolved challenge of prompt injection: https://simonwillison.net/tags/prompt-injection/ 40 on slop: https://simonwillison.net/tags/slop/ If you want an "LLM evangelism blog that rarely, if ever, has any critical analysis that isn’t pro-industry" there are plenty out there. I'm not o…

I think you should highlight your exemplary pre-AI writing too.

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

#234

Post by archagon »

logtempo wrote: post #180
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% speed for +20% spend isn't going to motivate a trillion dollars a year in spending. Except that if your company go 20% faster than the others companies, you win market shares. But then, everyone will use the same tools and companies will be at even speed, but the tool will stay. Now...if the market is saturated, it's useless to try to do things faster. Cheaper yes, but not faster.

Pretty much all major tech companies today are horribly bloated and mostly metastasizing instead of innovating. I'm not sure how 20% increased productivity will help in any way with that. If anything, it might accelerate enshittification and turn potential customers off even more.

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

#235

Post by KaiShips »

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…

[flagged]

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

#236

Post by aspenmartin »

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…

What I also find confusing though is that folks seem to ignore trajectory which is maybe the biggest lede to bury. As Simon says, we have had "good enough" coding agents for 6 months, that is a blink of an eye, and at my company my job has now completely changed. It's almost like a dream.

And that's just one inflection point. We've had several and there are many more on the horizon. So while I could be convinced that ROI is maybe not even positive today despite the ridiculous enterprise spend, it's perfectly rational to pave the way today for what's coming over the next few months let alone years down the line.

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

#237

Post by Our_Benefactors »

bigbuppo wrote: post #136
smokel wrote: post #49

Earlier quoted context omitted.

AutoCAD is $175 per user per month [1]. [1] https://www.autodesk.com/products/autocad/buy

AutoCAD is still the budget-friendly CAD program it has always been. You don't build big boats in AutoCAD.

As someone completely outside the 3D design world who always thought of AutoCAD as the gold standard - really? What program would be used instead? Please enlighten me.

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

#238

Post by hansmayer »

simonw wrote: post #197
hansmayer wrote: post #151

Earlier quoted context omitted.

Funny you should mention Uber. What was it their COO said recently about the AI costs?

I quoted exactly what they said in my piece, under the heading "The AI-failure stories around this are pretty thin": https://simonwillison.net/2026/May/27/product-market-fit/#th... > But then you sometimes go and talk to your senior engineering leaders and you’re saying, OK, how many projects that were on the cutting room floor got moved above the line because of the productivity gains because 25% of our code commits…

? What are you talking about mate? The man all but says "this shit does not work for us". It iss layered in that careful, sanitised corporate shit-sandwich communication approach, where you take a nice piece of shit and layer it in between two slices of avocado so its sweeter to swallow for the "consumer" of your message.

He also said in that article that what prompted the discussion was the public statement by the Uber CTO that he had already burnt through his organisations yearly AI-budget in April. Please stop this shilling mate, and trying to hide the overall perspective between this or that word.

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

#239

Post by simonw »

krupan wrote: post #204
simonw wrote: post #104

Earlier quoted context omitted.

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…

Are you saying that the software you wrote using those tools generated enough revenue to cover the $2000?

Not yet, but that's because it was almost all open source and I'm really bad at generating revenue from that.

When I account for the amount of time it saved me there's no question $2,000 was worth it.

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

#240

Post by mrandish »

jgbuddy wrote: post #57
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…

You are making the assumption that the models are only used / paid for by 2.5% of the population (your knowledge workers value). There will be new value created by these models which people are happy to pay for which simply did not exist at all before. It is also naive to say that the hyperscalers are going to be expecting a return on this in 5 years, it will be entirely propped up by investments / IPOs as has been t…

> There will be new value created by these models which people are happy to pay for which simply did not exist at all before.

True, but I think the GP's point was that what consumers will pay won't be nearly as profitable as what enterprises will pay to increase the output of their developers and knowledge workers. ChatGPT is currently the overwhelming leader in consumer AI usage but only ~5% pay $20/mo.

As a recently retired serial tech founder, I'm now one of those consumers. I use AI webchat daily for general search, Q&A and even to write little automation scripts for myself, yet I haven't paid anyone anything for AI yet. Even after being heavily restricted and performance nerfed to hell in recent months, free webchat AI is still fine for everything I do, and I'm not remotely price sensitive.

Even as AI compute costs fall over time, I doubt serving ads against AI webchat to consumers will generate the kind of high-margin, sustainable growth VCs get excited about. It's so undifferentiated I bounce around between all four leading providers because there's virtually no moat locking casual consumers to any chatbot beyond a single question thread. I guess if it had a nearly infinite context window seamlessly integrated across all sessions, that might be somewhat sticky for some consumers but it could also get creepy for some others - and it would devour gobs of the scarcest resource in AI. Beyond Maslow's Hierarchy of Needs, the mobile phone is the largest revenue, long-term mass consumer product ever but I just got a new flagship phone from a top-tier provider for $30/mo over 3 yrs. IMHO, even an all-you-can-eat, infinite context window, next-gen Mythos couldn't reach and sustain mobile phone levels of global consumer adoption at ~$20/mo. Unlike professional developers and knowledge workers, consumers don't have any "job to be done" big enough for an LLM to command that much of their zero-sum discretionary spend.

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