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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

#381

Post by hansmayer »

supern0va wrote: post #365
hansmayer wrote: post #325

Earlier quoted context omitted.

> 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?

The source was the article in the WSJ itself, which then referred to their source at the Anthropic. Which kind of is a textbook definition of "leak". Because otherwise Anthropic would have their lawyers hunting both the employee breaking their stringent NDA and the WSJ as well...

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

#382

Post by svara »

simplyluke wrote: post #305
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.

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…

There's still a lot of room for the best models to get better at coding .

Your argument rests on the "for marginal gains" part but it's really not clear that the gains are marginal in the foreseeable future.

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

#383

Post by m1coti »

supern0va wrote: post #310
hansmayer wrote: post #243

Earlier quoted context omitted.

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!

I work in big tech and probably 90% of code over the last month has been written by AI. And I suspect it's probably higher within Anthropic, which is probably what he's basing his opinion on. So, he's closer to correct than not. That said, your recollection is also flawed. It was in mid-March, and here's the relevant quotes: >I think we’ll be there in three to six months—where AI is writing 90 percent of the code. An…

Written, but was it reviewed? Do you need to edit code written by LLM?

I agree that most of the things are written by AI but writting code was never the bottleneck in big tech.

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

#384

Post by eikenberry »

brokencode wrote: post #43
antman wrote: post #33

The costs are exorbitant and most software is not produced by companies with such a huge moat. Anthropic made a profit through their recent bait amd switch pricing. There is zero useful insights online to indicate whether this might die due to commoditisation with good enough open models or fail the race to get more people subsidising unsustainable growth with other people’s money. Who knows? In any case they dont se…

Usage costs will come down with better hardware. Hardware is improving rapidly each generation.

Costs will plummet as better hardware becomes available and priced reasonable so that people can more easily run their own open models locally. But that won't help Antropic/OpenAI make more money, quite the opposite.

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

#385

Post by tedggh »

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…

Also, not all developers work on software products. The vast majority of developers work supporting software solutions as part of a much bigger business model, such as infrastructure, industry, healthcare and services. Many of these are complex organizations. So, unless you get to turn every employee into a 10x employee, the 10X coder along won’t necessarily make a 10X productivity contribution. What’s likely going to happen is the 10X coder will start to slow down or adding more (unnecessary) complexity to avoid having to sit and wait on overhead, for other areas of the business which are not easily automated away to AI to catch up. As a developer I can finish my project in June instead of December, but what if the customer is still not ready for integration until December? what do I do?

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

#386

Post by datadrivenangel »

mv4 wrote: post #347
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 configured a dual DGX Spark cluster, and it's certainly "good enough" for my agentic and coding needs.

what models are you using on that? My experiences with apple hardware have convinced me that it is not really good enough for coding locally.

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

#387

Post by jmyeet »

mfuzzey wrote: post #330
jmyeet wrote: post #111

Earlier quoted context omitted.

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...

I agree but it's even worse than that.

Data centers come down to performance-per-Watt. Electricity accounts for 20-30% of a data center's operating cost [1]. I don't know the exact breakdown but the GPU part of that is probably the majority given how power hungry GPUs are. The B200 is upwards of 1200 Watts [2]. The B200 is rated at ~4.5PFLOPS of dense FP8. So you're getting 3.75PFLOPS/W. We don't know what the next generation will look like. The A200 (Hopper architecture card that preceded the B200) had ~4PFLOPS apparently but also lower power consumption. Obviously this changes depending on whether you're looking at dense or spare and FP8 vs INT8 vs INT4 vs FP4, etc so we're just using FP8 as a yardstick.

Imagine a fictional B200 successor, the T200 that has 8PFLOPS of dense FP8 at 1000 Watts. Well then a DC built on that where the T200 will likely cost similar to what the B200 does now, you'll get nearly double PPW so the same size DC and same electricity load is going to be like 2 of your old DCs in operating costs. That's a big deal when you've laid out a trillion dollars.

[1]: https://iaeimagazine.org/electrical-fundamentals/how-much-el...

[2]: https://www.trgdatacenters.com/resource/h200-power-consumpti...

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

#388

Post by amelius »

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…

At least they're not going to make us watch ads.

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

#389

Post by PunchyHamster »

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.

But one will be in few months. And then you have choice of paying say $100k for hardware and pay just power cost (or pay someone to do that for you), or pay way, way more for your team to have access to marginal improvement.

And 5% worse model for 10% of the price of the bleeding edge will be worth it for majority of people

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

#390

Post by datsci_est_2015 »

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 could see such productivity gains being possible, if only because the current tooling around LLMs is terrible. The fact that we have 30 blog pieces per day making the front page of Hacker News about someone’s convoluted system to guide LLM output to something reasonable is absurd. There needs to be standardization in tooling, and it needs to be open source. Then, and only then IMO, will we see huge productivity gains.

But, at that point I think the big players’ moats will have dried up. Local models will probably be sufficient for 99% of daily office worker tasks.

So I disagree with TFA’s premise. I think this fear is probably shared amongst the LLM giants, and they’re still hoping that neural network transformers are somehow the path to AGI (probably not, imo).

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