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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

#341

Post by m1coti »

cogman10 wrote: post #250
roncesvalles wrote: post #226

Earlier quoted context omitted.

Outsourcing of knowledge workers didn't work out because at large enough scales, the geographic arbitrage disappeared. Companies mostly always got what they paid for. The determinant of success was only whether the task needed American-tier labor or could make do with sub-American quality labor.

That's certainly part of it. But the other part that I've heard time and time again is that in order for outsourcing to be successful you basically needed an american engineer in the mix hand holding everything, clarifying requirements, and vetoing bad code. That part of dev work, the requirements gathering, attention to details, clarifying requirements, is something AI also struggles with. A lot of companies basical…

I would not agree on that point. It really depends on company's structure. I mean it also depends with people that makes the team. I would say there are a lot of unknowns but I would certainly not generalize.

How I find your argument is that one distinguished engineer from US could do the same with the use of AI.

I worked with both and I know great and bad engineers from both sides. Only thing is that US has a bigger pool of great engineers.

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

#342

Post by mv4 »

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…

If people figure out how to run agents on-prem (already becoming feasible for both agentic tasks and coding on consumer hardware like Mac Studio 128GB+ or DGX Spark with some models) these companies will be in deep trouble.

Privacy is also a huge issue.

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

#343

Post by cryo32 »

aspenmartin wrote: post #218
cryo32 wrote: post #201

Earlier quoted context omitted.

This is never going to materialise. It’s dead in under 2 years. The market is shrinking and saturated already and it’s not because of AI gains but geopolitical instability and supply chain issues, some of which are caused by AI spending and stupid ass PE firms refocusing on AI supply chains. Only our pensions and futures burning.

What do you mean by the market is shrinking?

Literally revenue is collapsing in most sectors. Technology purchasing is declining. Service models are failing to turn a reasonable ROI.

People stopped buying shit.

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

#344

Post by pier25 »

aspenmartin wrote: post #309
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...

thats not that far off. Costs like $100Ms to train a frontier coding agent model today, billions if you count the full pipeline. Combine that with the infra we're building out, the fact that you have multiple labs building similar scaled models, the industry-wide costs of training frontier models could easily surpass 10B/yr in 2027

Yes, when he made that claim back in 2024 they were spending like $100M to train a model.

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

#345

Post by eikenberry »

amilios wrote: post #300
slopinthebag wrote: post #255

Earlier quoted context omitted.

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.

But if the closed-source models can do this without the additional effort, that's a significant gap, no?

That is the 3-6 month sota-open gap people talk about, a time-window that continues to move as new models are released on both sides.

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

#346

Post by khuey »

hamdingers wrote: post #159
121789 wrote: post #95

Earlier quoted context omitted.

uber sure....but how did wework survive? they are a smoldering husk of a failed company looted by its founder

I'm sitting in one right now and don't see any smoldering...

They literally went bankrupt and wiped out the original shareholders.

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

#347

Post by mv4 »

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.

I configured a dual DGX Spark cluster, and it's certainly "good enough" for my agentic and coding needs.

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

#348

Post by csomar »

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…

They are both (and also spacex) sprinting for IPOs. They know that the opportunity window is closing fast and that advancement in model quality has largely plateaued in the last year. Take as much investor money as you can get away with for now.

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

#349

Post by moduspol »

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.

Part of the value of paying an accountant is that you can get representation in case you are audited. Though I guess you did say you were confident it is correct.

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

#350

Post by bambax »

> That’s $2,180.16 worth of tokens for $200

So the author claims he's getting $2000 per month worth of frontier AI free of charge. Ok. If he's been doing that for 6 months that's $12k. What has this produced concretely? For $12k you can find a used car in decent condition. Heck for $1200 (his actual out-of-pocket spend) you get a brand new ebike! (on which you could put a pelican and make a photo of both if that's your fancy). But here it's unclear what has come of it.

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