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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

#321

Post by jkelleyrtp »

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 agree in principle with the math. But I believe that in reality if revenues don't show up quickly, then lenders will just restructure the debt and defer the payback period. Similar to SF commercial real-estate; many buildings should've come due during the depressed covid market, but lenders (banks) were willing to delay payment until the market picked up again.

The scale of these investments put the lenders at substantial risk, so the lenders will do anything to make it work. If the current lenders will be damaged by extended payback periods, they can simply sell the debt to someone else who won't be.

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

#322

Post by rvz »

firesteelrain wrote: post #83

Anyone actually making money paying all of these monthly fees? Or just hobbyists? I have yet to see any real ROI posted anywhere.

This is the same question I said about people running OpenClaw. You don't hear about anymore.

Other than the hosting providers, I am also yet to see anyone directly making money from their OpenClaw agent.

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

#323

Post by grttq »

CuriouslyC wrote: post #71

Companies are kool-aid drinking now due to hype, but given how much they're spending, if they don't see REAL, BIG wins from it soon, they're going to scale it back quickly and switch to Chinese models. Claude isn't worth the API cost for a lot of development work, and once companies have had time to collect and crunch data they'll see this.

Swear people like you were hyping the frontier labs so hard not long ago.

Funny to see the change of tone - a lesson for people not to get too ahead of themselves.

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

#324

Post by golem14 »

Tuna-Fish wrote: post #248
materielle wrote: post #211

Earlier quoted context omitted.

I'm about to leave a shallow comment, but I am a bit skeptical of the supposed drop in inference costs. If AI labs saw a lot of potential there, they'd surely be bragging about it non-stop? So the fact that publicly available information is conflicted is probably a sign that at the very least, the numbers aren't amazing. Yes I know there's no evidence and this is lazy reasoning. But there's probably a bit of truth to…

Why on earth would AI labs be bragging about how little the product they sell actually costs them to make? You don't want to do anything that reduces it's perceived value to the user, that might make them less willing to pay for it. Also, inference costs are bound to go way down with more optimized architectures. GPUs are fundamentally not great at inference. No platform where the weights are streamed from a large po…

Why would any company brag about their margins ? Yet they do, to attract investors.

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

#325

Post by hansmayer »

supern0va wrote: post #278
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…

>according to Ed Zitron So, unsourced vibes from a shady guy whose entire empire is built on being against AI? I genuinely don't know how folks can continuously buy into anything he has to say after that Wired piece. The credibility there is seriously lacking. Please, continue to be skeptical of the labs. But people need to stop talking about this dude as if he's the Holy Grail of the anti-AI movement. It's going to…

> So, unsourced vibes from a shady guy whose entire empire is built on being against AI?

Actually he provides sources when he analyses stuff and imho much better than the usual corporate "Sam Altman says we should ask ChatGPT how to raise babies" crap. Also, I don't know many 'shady' guys who have built entire "empires", nor does he seem to actually have an empire. Usually being shady means you are kind of unknown and all. I am not glorifying Ed, don't even know him personally. I am not even impressed with his writing style much to be honest. But he brings important facts and information to light, which otherwise would have been lost in the cacophony of corporate media light treatment of these con-men. Holy Grail? Blowing up in our faces? WTF are you talking about?

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

#326

Post by swatcoder »

WarmWash wrote: post #287
swatcoder wrote: post #123

Earlier quoted context omitted.

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.

Personally, I've only encountered any of those people on line, and almost exclusively here on HN.

Most people I've met -- and again, in a pretty darn skewed sample globally -- see $65/mo as a lot of money to spend on technology of any kind and can't think of anything much they need from "a personal knowledge worker in their pocket". I don't know a single person in real life who remains excited about AI at all, and only a few software engineers who feel it'd be worth that much.

Everybody seems to be mostly confident with the "knowledge productivity" in their personal and professional life and a pretty skittish about spending in today's economy. Most would be excited about a magic new robot that affordably saved them from unwanted physical labor and drudgery, but nobody needs much real help making appointments or filling out forms or whatever.

That's not to say I won't be proved wrong some day, with some further innovations in AI products, but global-scale demand isn't waiting for anything that's been released so far.

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

#327

Post by irishcoffee »

alex_suzuki wrote: post #266
FuriouslyAdrift wrote: post #246

Earlier quoted context omitted.

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.

I’m curious: are you spending on beefy developer machines, or some kind of shared local inference server? Would be interested to know more if it’s the latter.

I am aware of at least a handful of companies doing the latter. I don’t work for them and cannot speak to their setup.

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

#328

Post by supern0va »

duped wrote: post #149
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.

I must admit that I am going to find it fascinating when we hit the point where it becomes nearly impossible to deny the efficacy of these tools. I have straight up had people, even in real life, suggest that I'm lying about my productivity gains or what I'm able to accomplish with them.

Like, I understand the reasonable arguments against (I even agree with a few), but it's clear that some people have fully inserted their head into the sand and just don't want to believe any of this could be true. Which will be harsh, since I think getting hit with this train all at once in the future is going to be a rougher ride than a slower coming-to-terms-with, even if the result is one we're unhappy with.

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

#329

Post by eikenberry »

slopinthebag wrote: post #255
smokel wrote: post #29

Earlier quoted context omitted.

For coding assistance, I have tried OpenCode with several large open models through OpenRouter. All were fairly bad compared to Claude Opus. Could you provide some hints on how I should be holding these open models so that I might get more value out of them? I agree with the common trope that open models lag behind by about a year, but something magical happened just around a year ago when the state of the art models…

Do more planning yourself, be smart about the context, break down tasks into smaller components, give it more guidance. You can't just lazily prompt it to complete large features autonomously and expect good results.

+1 .. just wanted to reiterate that this is the answer. The open models work great if you just do a little more of the design/architectural work up front and organize your work appropriately.

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

#330

Post by mfuzzey »

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…

It's actually worse than that. It's not just financial depreciation or that the existing hardware becomes obsolete due to being less powerful than new hardware but also that hardware being run all the time at high load actually has a limited lifetime of a few years so it will physically break...
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