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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

#281

Post by WarmWash »

jmyeet wrote: post #111
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…

Prices are not going to stay where they are.

You have either never seen a tech cycle, or need to be reminded of that. The pressure to buy more expensive plans is already starting to form.

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

#282

Post by simonw »

slopinthebag wrote: post #272
simonw wrote: post #4

Earlier quoted context omitted.

I think it is applicable to a much wider range of knowledge work, but it's also harder to apply there. Software development has the huge advantage that mistakes and hallucinations are very easy to spot: the software works or it doesn't. Spotting errors in a research report or legal brief is a whole lot harder! But... non-software professionals spend a huge amount of their time on tasks that can be safely automated -…

> Software development has the huge advantage that mistakes and hallucinations are very easy to spot: the software works or it doesn't. Do we not care about code quality, maintainability, performance, extensibility, or understandability anymore? Honest question, not a gotcha, it's just previously getting software to pass all the tests was a small part of what we would consider "working" or perhaps "good" software. Ma…

> Do we not care about code quality, maintainability, performance, extensibility, or understandability anymore?

Yes, we should care. I've been writing a whole book about that: https://simonwillison.net/guides/agentic-engineering-pattern...

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

#283

Post by golly_ned »

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…

This is why 'agents' are the solution for these companies. Token spending goes through the roof. As long as a human is in the loop needing to read or review at human speed, that's a ceiling on how many tokens per user they can generate.

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

#284

Post by nonethewiser »

seanp2k2 wrote: post #141
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…

>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…

>I would argue that that's been the case for quite some time before AI.

I would agree but it's really minimized the building. More and more time is being spent on pre-coding work.

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

#285

Post by spamizbad »

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 will also tell you, as someone who works at a company that's trying to remain profitable, that token spend has caught the eyes of finance and much like cloud spend they've already started applying pressure to control costs. This May my team is protected to use 30% fewer tokens than we did in April - this was by intention. I suspect we'll drop more in June.

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

#286

Post by jstummbillig »

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…

> 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.

This is where the napkin math is breaking down in a big way. There is absolutely no reason to assume this will only impact "knowledge workers". Farmers use computers. Farmers will use AI.

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

#287

Post by WarmWash »

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.

I think the underestimation is how many people want a personal knowledge worker in their pocket, and are willing to pay ~$65/mo for it.

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

#288

Post by jvanderbot »

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…

Hey, I wrote this down one time. I estimated way higher yearly revenue required, to be adversarial. And you can keep the "cost per unit AI work" a parameter and play with the results.

But the point is that if people are willing to delegate part of their salary (e.g., buy consumer products), vs requiring employers to pay for the tokens, then it's quite possibly a net win. Something like "I pay a largeish fee every month to make my own job much easier", similarly to how we buy a car to make commuting easier.

https://jodavaho.io/posts/ai-jobpocolypse.html

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

#290

Post by simonw »

aerhardt wrote: post #265
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.

I like his other posts. He's bullish on AI, which is fine. I'd like to read a mix of bearish and bullish level-headed takes from people who are subject matter experts. His technical credentials are well past discussion - I love Django, and he comes across as a pretty upbeat but level-headed guy. Certainly beats radical takes in either direction from people who have no clue what they're talking about. It's just this a…

The thing that matters most to me is if reading what I wrote teaches you some new things and gives you something useful to think about.

If I make an argument and you disagree that's fine with me, provided I didn't use misinformation or sloppy thinking in making that argument.

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