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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

#361

Post by jacobgkau »

dirck-norman wrote: post #187
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…

Feelings aren’t fact. A lot of data shows the doomerism is not reflected in the actual numbers and much of it has to do with rapid inflation and continued vibes. Consumption has risen, inflation adjusted wages have risen for blue collar and white collar alike. Most social mobility has been the middle class moving into the upper middle class, not moving to the lower class. The main thing holding people back is the hou…

> Consumption has risen, inflation adjusted wages have risen for blue collar and white collar alike.

My wages haven't risen for nearly 5 years, while inflation has occurred over the past 5 years. Why the blanket statements?

> The main thing holding people back is the housing crisis. This is orthogonal to the value creation of businesses.

Are you suggesting a "housing crisis," in your words, wouldn't impact consumption? I'm watching my spending (and living like a child in his parent's house, except it's not my parent and I have to pay for it) in the hopes that in about a decade, I'll have saved up enough of a down payment for a home somewhere in my state that I could actually afford the mortgage on the remaining amount. There are plenty of things I'd potentially spend money on but won't as long as I feel like I'm economically stuck and have a chance in hell of saving my way out of it. So this feeling translates to fact.

If you think my personal experience is just an anecdote and doesn't count because it's not being told through the lens of large-scale numbers, fine. But I really agree with the person you replied to that you're gonna have to be a whole lot more specific than "value creation" if you want people to spend money on your AI products "in this economy," whether it's because they're actually strapped for cash or just pretending like you seem to think they are.

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

#362

Post by jonas21 »

cootsnuck wrote: post #297
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 it was but a few months ago that their CFO said, in a court filing, that Anthropic's revenue across the entire lifetime of the company "exceeds $5 billion". Pretty strange. https://www.reuters.com/commentary/breakingviews/anthropic-g...

How is it strange? The "exceeds $5B" quote was from December 2025. Anthropic has seen tremendous growth since then, ever since Claude Code with Opus 4.5 got really good at coding.

If you've ever been at a startup, this is exactly what it looks like when you go from not having product-market fit to having it (though with a few extra zeros on the end compared to most).

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

#363

Post by sourcecodeplz »

pzo wrote: post #181

> If you are a heavy user of coding agents these plans are a fantastic deal. I just ran the ccusage tool on my laptop to get an estimate of how much I would have spent if I were to pay for API tokens in the past 30 days and got You think this is fantastic deal only because they use similar like tricks where they inflate the price and tell you something supposed to cost $1000 but they have this today promo for $100. I…

Yep, exactly this. And I have so much less anxiety that I have to use my 5-hour/weekly usage or I lose it... with deepseek api the credits never expire, I can use them when I want, how much I want and the prices are ridiculously low for the quality/intelligence/performance.

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

#364

Post by aspenmartin »

bambax wrote: post #350

> 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 yo…

I would be very curious what kind of answer would satisfy you here. Simon isn't building a product, where $200 is a line item on a balance sheet. If he tells you what sort of analyses or time savings $200/mo on coding agents have enabled him, do you honestly think that would satisfy you?

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

#365

Post by supern0va »

hansmayer wrote: post #325
supern0va wrote: post #278

Earlier quoted context omitted.

>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 an…

>Actually he provides sources when he analyses stuff and imho much better than the usual corporate

You said it was likely an internal leak to the WSJ "according to Ed Zitron". Did Ed have a source for that, or was it just vibes?

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

#366

Post by simplyluke »

doug_durham wrote: post #356
simplyluke wrote: post #305

Earlier quoted context omitted.

Yeah, that's the part that just seems to be wildly under-discussed to me. If open source models are ~3-6 months behind SOTA, and ~opus4.6 capabilities are good-enough for product market fit, do the frontier labs have half a decade to catch up on their prior burn? AI cost ballooning faster than companies can afford is becoming a very common topic in my circles right now. The era of "I'll pay infinitely more for margin…

Open source models that you can run locally are much more than 3 to 6 months behind. 6 months was the November inflection for Claude. No open source model is as good as Claude Opus 4.6.

> that you can run locally

That's doing a lot of work here.

The future I see isn't most companies buying hundreds of thousands in hardware to run models, it's them adding a line item to their AWS bill. Inference costs on the larger hosted open source models are dramatically lower than the frontier labs API pricing.

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

#367

Post by eikenberry »

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…

> For coding you always want to go with the best model in the category [..]

And this is why many companies go out of business. You always want the best bang for your buck, sometimes this is the "best model" and sometimes it is not.

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

#368

Post by lunar_mycroft »

chasd00 wrote: post #340
lunar_mycroft wrote: post #182

Earlier quoted context omitted.

The difference between what the employer makes per employee and what they spend in compensation doesn't matter. If the increase in productivity isn't greater than the increase in cost, there isn't a reason to pay for AI over hiring more developers. Imagine an employer with 10 employees paying $500k per employee and making $2M per employee in revenue (to use your numbers). They could hire two more employees and spend…

There’s a lot relationship and culture management overhead involved when adding 2 more people to a 10 person company. I think any business leader would take the productivity speed up from buying a tool over hiring more people and integrating personalities/habits/viewpoints to an existing established culture any day of the week.

You're basically positing that the real cost of a 20% headcount increase is higher and/or the productivity gain is is lower than 20%. That isn't an unreasonable claim, but it's basically rejecting the premise here. You might just as well object to the premise that you can buy a 20% speedup by spending an extra 20% on tokens.

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

#369

Post by nostrademons »

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…

Google's internally developed and sometimes even launched plenty of innovative new products in the past decade. Stadia, Fuchsia, federated learning, and the whole transformer architecture that underlies this AI boom are good examples.

The problem is they get killed by some other executive who is afraid of their department looking bad by comparison.

I think this is fairly illustrative of the challenges in AI becoming as impactful as the Internet. The bottleneck is not making things. There are plenty of people who are really good at making things and can easily be 10x or 100x as productive as the average corporate worker. YCombinator was founded on that premise - small teams of founders and early employees could be orders of magnitudes more productive than the 1000s of corporate employees at their competitors.

The bottleneck is on bringing your product to market. If your innovative new product is built within a corporate environment, it'll get killed unless the executive you work under can get a promotion out of it, and you'll be denied all sorts of help with approvals, launch process, PR, marketing, branding, etc. If it's a startup, they'll try to shut you out with exclusive distribution deals, legal threats, lobbying efforts to change the legal environment, PR campaigns, FUD, etc.

The Internet was revolutionary because it let millions of people bring products to market without asking permission. Instead of having to bid for retail shelf space among dozens of entrenched competitors that all had sweetheart deals with the retailer, you could just put up a website and sell it to anyone across the globe. Instead of following hundreds of regulations that governed existing commerce, you could just launch something and sort it out later. AI doesn't really have that property - if anything, it makes things more centralized, with more gatekeepers, and so seems more likely to destroy economic value than add to it.

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

#370

Post by flexagoon »

ciconia wrote: post #354
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…

> make developers 2x, 5x, 10x as productive on stuff that matters What does this even mean? Is this about speed of development? Is this about headcount? LoC? How are coding agents contributing to productivity in places like GitHub, Shopify or Meta? I mean companies that already have an established product. I really wanna understand this because I'm not seeing that GitHub's product suddenly became so much better than…

Productivity is measured in the number of AI-generated Twitter posts developers can make about their AI-generated startups
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