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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

#371

Post by ex-aws-dude »

simonw wrote: post #360
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've written a great deal of code - code that would have taken me years of work to produce without LLMs. (It's mostly open source, you're welcome to dig around in https://github.com/simonw and https://github.com/datasette if you like.) My time as an experienced software engineer is worth a lot of money - a whole lot more than $12,000 for the past six months.

And what was your return on investment?

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

#373

Post by PunchyHamster »

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…

That assuming once they start squeezing people won't just go to deepseek or other cheaper competition

> That's a _huge_ shift. Most people I know cite +20%-40% velocity with these tools, against the actual work their company cares about doing. +20% speed for +20% spend isn't going to motivate a trillion dollars a year in spending.

And most research shows people far over-estimating their own gains. Once companies start counting the actual (and not just reported) gains, the AI budgets will be more limited as people realize it's an useful and versatile additon but not replacement for most types of work

> We're not there yet. This is still the upswing of the hype cycle, and unless we figure out how to make developers 2x, 5x, 10x as productive on stuff that matters, this isn't going to play out well.

Upswing of the hype cycle while growth of tech itself is flattening, both coz of techs innate issues (which might or might not be solved, but some papers claim they are unsolvable with current approach) and just the fact the spike in growth caused so high economy cost that it put brakes on itself.

T

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

#374

Post by doug_durham »

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…

GLM-5.1 isn't just as good. It is no match for Opus running in Claude Code. Please try it yourself. Open source models are about a year behind at least.

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

#375

Post by hansmayer »

jonas21 wrote: post #362
cootsnuck wrote: post #297

Earlier quoted context omitted.

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).

Ah yes, December 2025...such a long, long time ago...

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

#376

Post by ex-aws-dude »

peder wrote: post #102
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…

> I don't see the business model working. Same. It's a nightmare from a Porter's Five Forces perspective. There will be a ton of businesses competing in this space, and there will be something of a moat due to how capital intensive the business can be, but there will still basically be infinite competitors. Great for consumers.

Well in reality AWS will just host one of them and most companies will use that

Like how snapchat kind of fell off because the feature could just be a subset of instagram

It seems like it would just become a commodity like EC2

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

#377

Post by alexpotato »

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 was in college in the late 1990s/early 2000s and I distinctly remember an econometrics professor state the following:

"As cable TV and Pay Per View came out, there were studies done about how many movies people would watch if given unlimited access to films. The results were bandied about as proof that we should build out all this infrastructure to support this line of business. When the data was further analyzed by statisticians etc, it turned out that people claimed they were going to watch films 10-12 hours a day, every day of the week. Impossible."

I feel like we are in a similar boat here where some people are assuming:

- EVERYONE is going to be using max tokens

- tokens will NEVER get cheaper due to improvements in hardware, software, design, market forces etc etc

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

#378

Post by simonw »

ex-aws-dude wrote: post #371
simonw wrote: post #360

Earlier quoted context omitted.

I've written a great deal of code - code that would have taken me years of work to produce without LLMs. (It's mostly open source, you're welcome to dig around in https://github.com/simonw and https://github.com/datasette if you like.) My time as an experienced software engineer is worth a lot of money - a whole lot more than $12,000 for the past six months.

And what was your return on investment?

As I commented elsewhere, I'm still bad at making money from my open source work: https://news.ycombinator.com/item?id=48296794#48298909

(I have a feeling if I could say "and I closed $2m in sales with the software I wrote!" people would find a way to say that didn't mean anything anyway, because how can I prove I wouldn't have made those sales writing it by hand?)

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

#379

Post by aspenmartin »

packetlost wrote: post #358
aspenmartin wrote: post #218

Earlier quoted context omitted.

What do you mean by the market is shrinking?

It's consolidating into fewer, higher value assets. Over 40% of the S&P500 is in companies that are heavily (potentially over ) invested in AI.

tech companies have grown disproportionately to other industries, but that says nothing about the growth in other industries

- S&P has a Q1 2026 blended revenue growth of 11.3% according to FactSet - most sectors are growing, not just tech

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

#380

Post by zamalek »

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…

The productivity is going into perverse incentives[1], e.g. we have improved (by which I mean "increased") token use. More PRs every day. More lines of code. All things we knew were shit-brained metrics a decade ago (obviously except token use).

We've also increased how much our coworkers need to read, or deal with. You can get an AI to make any point you want, so you can ignore the 5 humans raising alarms due to the 1 clanker you made say what you want to hear.

All numbers going up.

There are obviously people producing additional true value with it, probably, but that's almost certainly scarce.

[1]: https://en.wikipedia.org/wiki/Perverse_incentive

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