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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

#311

Post by awesome_dude »

FuriouslyAdrift wrote: post #246
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 work for a tiny little company ($150MM annual rev with 9% net) and we are already looking at dropping $100k on hardware to run local models because, for us, they're "good enough." Our estimated spend for AIaaS would exceed that cost in less than a year. In a few years, there will be hardware capable of running frontier models good enough for most things at accessible prices for even tiny companies.

> In a few years, there will be hardware capable of running frontier models good enough for most things at accessible prices for even tiny companies.

I was going to say - the models are just going to keep growing at a pace exceeding the pace of hardware pricing/availability

But then I realised that, far more likely, there will be a plateau reached (again) where nobody is seeing gain, and at that point hardware will catch up

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

#312

Post by aspenmartin »

hansmayer wrote: post #243
pier25 wrote: post #185

Earlier quoted context omitted.

Yeah I'll believe it when I see it. Revenue is increasing but so are their costs. Back in 2024 their CEO claimed training costs would rise to $10-100B in the next years. https://www.tomshardware.com/tech-industry/artificial-intell...

Their CEO claims a lot of wild shit. He claimed in January this year, that in about 2-3 weeks from this moment, i.e. "in 6 months" that AI will be doing all of SWE work. Lets hold these people accountable for a change!

> "in 6 months" that AI will be doing all of SWE work

I assume this is the quote you're referring to from Davos?

"I have engineers within Anthropic who say I don’t write any code anymore. I just let the model write the code, I edit it. I do the things around it… we might be six to twelve months away from when the model is doing most, maybe all of what SWEs do end to end."

that was in Jan, he said "might" and he said 6-12 months. Yes! Let's hold him accountable for saying reasonable things!

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

#313

Post by jgbuddy »

mrandish wrote: post #240
jgbuddy wrote: post #57

Earlier quoted context omitted.

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 recentl…

100%, a driving factor will likely be how good we can make models that are so small they use almost no compute. Until then it is a race for adoption and moat-building (or screwing people over?) once you have users

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

#314

Post by quantumleaper »

jstummbillig wrote: post #286
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.

The kind of farm that would use AI is already 99% machinery and automation.

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

#315

Post by bigfishrunning »

mirekrusin wrote: post #279
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…

Now try to take back llms from developers and see what happens.

If, by some miracle, all LLMs ceased working right this second, any developer who would no longer be productive should not have been a developer in the first place.

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

#316

Post by mfuzzey »

jgbuddy wrote: post #219
specproc wrote: post #124

Earlier quoted context omitted.

I'm sorry, what the feck does "value creation" mean here? I live in a place where people are so, insanely squeezed from every angle. Wages are stagnant, prices rocketing. Where is the money to pay for this value going to come from? No one I know feels richer than they did a decade back. I've not been able to meaningfully put up my prices for a decade. People are tired and stressed and scared, particularly scared of a…

A literal example is that I can use AI to file my taxes instead of spending a weekend and hundreds of dollars to have an accountant do it for me. It costs me like $5. that 245$ delta is the value of that output to me, as long as I am confident it is correct.

Seems to be a thing in the US to need specialised software, an accountant or AI to file taxes.

In most of Europe individuals at least don't need any of that. I'm in France and it's just a connection to a government run website to enter a few figures, takes less than an hour most of it is already pre-entered (salary etc), the main thing to add manually is charitable donations.

If you're running a business then yes an accountant can be good (or be required depending on the legal form of the business) but not for individuals.

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

#317

Post by simonw »

csomar wrote: post #307
simonw wrote: post #178

Earlier quoted context omitted.

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…

All of these are about AI misuse, not skepticism of AI. By skepticism I mean doubting whether AI actually delivers on its promises which, based on this last post, sounds like something you think we're already past. Many people still think AI coding agents are slop on steroids despite all the current hype around AI actually shipping functional products.

It's hard for me to write about skepticism that coding agents deliver on their promises when I've been using them daily and know, for an absolute fact, that they boost my own productivity.

(And that's after taking into account the METR paper that says engineers over-estimate their productivity with these tools.)

I have plenty of doubts about AI delivering on its promises outside of coding. I don't write about AGI because I think it's science-fiction hysteria. I write about slop precisely because it represents a mis-use of AI that demonstrates people completely misunderstanding what it's useful for.

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

#318

Post by odie5533 »

mesmertech wrote: post #15
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…

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…

If I generate code with Claude, ChatGPT, and GLM 5.1, I can't say which model is which reliably. I exclusively use Claude more out of superstition than reason.

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

#319

Post by atleastoptimal »

I think this was obvious since the birth of ChatGPT

Intelligence is a universal good, it can apply to anything, and no, "human intelligence" is not the only form that is useful nor special. There are limitations to AI but also huge advantages, and its obvious that the advantages are worth paying for, given their revenue.

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

#320

Post by aspenmartin »

csomar wrote: post #307
simonw wrote: post #178

Earlier quoted context omitted.

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…

All of these are about AI misuse, not skepticism of AI. By skepticism I mean doubting whether AI actually delivers on its promises which, based on this last post, sounds like something you think we're already past. Many people still think AI coding agents are slop on steroids despite all the current hype around AI actually shipping functional products.

Love when people say "its promises". What specifically are you disappointed with? Simon's posts are high quality and evidence driven. AI has already delivered an incredible amount. Read Epoch for industry trends and analyses, METR to, everything points to a pretty consistent picture.

"Many people still think AI coding agents are slop on steroids despite all the current hype around AI actually shipping functional products."

Oh yes, tons and tons, especially on HN. But the plural of anecdote is not data. Enterprise spend speaks for itself. You are using AI-coded functional products all the time. Do you want like a diff history for the Google codebase or something?

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