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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

#631

Post by jwpapi »

I have to give them kudos. This whole thing is the greatest swindle of all time.

AI has some use cases, but not at the price it’s currently priced at. I’ve been on AI since GPT-2 with a lot of heavy users. Every user has the same story, curiosity, surprise, hype, hate, realization. Enterprise is usually a bit behind and are right now at hype cycle, that’s where they sold all the deals and do the IPO.

It’s really a VC masterclass.

Don’t get me wrong there is are useful cases of AI, but not the way the want it to be. Quite similar to Blockchain. The idea of decentralized money has right to exist. 99% of other coins not.

AI is a faster, but still less accurate search engine. AI is great in finding bugs, it’s great at ruber duck debugging.

The reason I call it a swindle is, because along with the marketing it gives tons of people in the world the impression, they can now build their own startup, game, infra etc without the need to learn it themselves. This leads to millions of abandoned and low qualiy projects and products, because the vast majority has never built the mental modal necessary to solve the problem thoroughly. In the end they’ve wasted months and money (but burnt tokens). This is what I call a swindle.

All early adaptors I know have not drastically winded down their usage, not because of money, but because there is no new case. If you want to explore a new project you can get onboarded quickly learn a lot and then switch to documentation and live testing. For me usage is the lowest it has been the last 2 years.

I would not let AI touch my code. I have anxiety around it, because it will gripple back up. I will let it read my code and let me know what I did wrong so I’m sharpening myself.

100s of companies including open source solution can offer that for me.

All my non-tech friends are now in hype cycle and share their hype and fore forseeable frustration with me.

I have to say I’m in a way impressed in how AI has been rigorously vc-utilized (conciously or not-conciously) to generate these vast companies with the whole world watching.

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

#632

Post by DrewADesign »

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…

Because they can think more than one quarter into the future? Why on earth would someone adopt something into their core workflow that was fantastically unprofitable? Uncertainty and business don’t mix. Most people aren’t hype-eating bacteria that only care about maximizing their next paycheck.

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

#635

Post by omcnoe »

regularfry wrote: post #502
cogman10 wrote: post #167

Earlier quoted context omitted.

This is the same argument that has been historically made for outsourcing developers. Get 20 more devs for the cost of 1 dev in the US. I suspect that AI will fail to pan out to the same extent for the same reason why outsourcing hasn't fully panned out (even though every company tries it after getting big enough). The problems that will come up will be and always have been ongoing maintenance. AI is great at writing…

> I suspect that AI will fail to pan out to the same extent for the same reason why outsourcing hasn't fully panned out My mental model for that is that outsourcing fails where the work is being done organisationally far from the knowledge needed to do it. We know that's true of teams inside organisations, there's been a lot of research on how distance in the organisational tree negatively impacts productivity. Outso…

Outsourcing also fails because it’s a pathological case of adverse selection. The businesses that outsource projects are ones who are organisationally incapable of managing those projects well internally. But, that inability extends to their oversight of outsourcing shops as well.

End result is that many outsourcing firms are borderline fraudulent in the way they treat their customers.

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

#636

Post by aspenmartin »

jwpapi wrote: post #631

I have to give them kudos. This whole thing is the greatest swindle of all time. AI has some use cases, but not at the price it’s currently priced at. I’ve been on AI since GPT-2 with a lot of heavy users. Every user has the same story, curiosity, surprise, hype, hate, realization. Enterprise is usually a bit behind and are right now at hype cycle, that’s where they sold all the deals and do the IPO. It’s really a VC…

Trying to parse the raw claims here maybe you can help me out

- it’s a swindle because ROI of tokens for coding models is not positive? As in it doesn’t bring enough value to charge like the $100/mo?

- enterprise customers are too dumb to see this

- IPO to max out the CEO profits for what is ultimately blockchain vaporware

Am I getting that right? Or am I putting words in your mouth?

> it gives tons of people in the world the impression, they can now build their own startup, game, infra etc without the need to learn it themselves.

I can’t speak for peoples beliefs and motivations, but this seems to be strawmanning, no? AI is a powerful tool to force multiply people. You can’t just prompt “build me an enterprise SaaS app worth $1B” or “build me GTA6 and don’t hallucinate” but is that your impression of what’s happening? Dario and Sam are saying “if you buy our coding agent subscription you can build a game with zero skill and one shot and then be rich”?

If you don’t find value in AI agents I can see reasons why that could easily be true today. Also if it just gives you the heebie-jeebies. But to say it’s a swindle on par with the blockchain I think that contradicts an enormous amount of signals and also the actual dialogue (not just headline sound bytes) around what these systems are capable of today and what we expect them to do say at the end of the year.

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

#637

Post by aspenmartin »

squeegmeister wrote: post #463
aerhardt wrote: post #132

I find this analysis confusing. PMF for coding was likely reached some time last year. Profitability, which is different, we don’t know. The article kind of confuses both without making a strong economic case or using numbers in a compelling way. I don’t understand what the Uber case has to do with this either. The Uber COO clearly said that at least in terms of ROI he’s not seeing the results either. My take is the…

The article also treats the word "good" as load-bearing in a way that should have you questioning their analysis: "I’ve called November 2025 the November inflection point because that was when GPT-5.1 and Opus 4.5, combined with their respective coding agent harnesses, got good—good enough that we’ve spent the last six months adapting to agent systems that can reliably get useful work done."

Yet it’s backed up by adoption across the industry

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

#638

Post by lbreakjai »

jillesvangurp wrote: post #476
sourcecodeplz wrote: post #6

With deepseek and xiaomi mimo models slashing their prices 99%, I don't see a great future for openai / antrhopic with regards to their 1T valuations. Maybe 1T valuation will be the whole market, West + East.

Most of the corporate world in the EU or North America will be hesitant to rely on Chinese AI providers. There are some very real blockers for that for things like data security, compliance, etc. And recent geopolitics don't help. Legalities aside, you need to look not at the model quality but at the infrastructure needed to scale these models from tens (now) to hundreds (soon) of millions of users. Only a handful of…

Run it on Bedrock. If you're already on AWS, procurement doesn't even need to be involved.

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

#639

Post by aspenmartin »

shimman wrote: post #589
simonw wrote: post #533

Earlier quoted context omitted.

What's the psychosis?

That leaders are completely fine with impoverishing vast swaths of American workers because of "progress?"

I’m so curious: let’s say you’re the president or the CEO of a major tech corporation building frontier AI systems.

What are your directives?

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

#640

Post by bradleyjg »

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's a _huge_ shift. Most people I know cite +20%-40% velocity with these tools, against the actual work their company cares about doing.

We all have our own observations and mine don’t significantly diverge. But that’s bottom up. At this point shouldn’t we be seeing it top down?

If we are beyond potential and into significant productivity gains, why isn’t that showing up for the customers?

Why didn’t delta airlines get significantly more operationally efficient in the last 3 months due to the introduction of better software?

This is a genuine question, I am seeing a disconnect.

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