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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

#211

Post by materielle »

whatshisface wrote: post #173
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…

Here are a few thoughts: - The publicly available information about how inference costs compare to training costs is conflicted. EEs involved in datacenters talk about power usage spikes during training runs as if they were a major factor in the designs, but academic papers discussing cost-optimal scaling confidently treat inference-time compute as a major factor. - On the side of the balance indicating that training…

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 this line of thought.

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

#212

Post by nr378 »

xnorswap wrote: post #147
simonw wrote: post #16

Earlier quoted context omitted.

I'm not sure what you're pushing back against here. I spent $200. If I had been paying API pricing it would have been $2,180.16. The article is about how enterprise customers get charged API pricing, which means if I had been employed by one of those companies I would have cost them $2,180.16. What am I missing?

Have you or I misunderstood the "teams" plan? edit: I missed the "enterprise" feature matrix with the usual audit/compliance stuff to force the biggest enterprise customers onto enterprise plans. Otherwise the "teams" plan is much better value for any business. orig-continued: https://claude.com/pricing/team Teams premium is "Everything in standard, plus more usage*" And from my experience, it's a very generous usage…

Claude Teams and Claude Enterprise are 2 distinct plans. Simon is right that Enterprise seats have no included usage (and so all usage is charged at API billing rates), whereas Teams seats do.

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

#213

Post by Legend2440 »

hansmayer wrote: post #175
Legend2440 wrote: post #23

>Somehow this fragment turned into headlines like Uber’s COO says it’s getting harder to justify the money spent on AI tokenmaxxing, because the market for stories about AI failures remains enormous. I notice this all over the place. Many people hate AI and want it to fail, and they're willing to invent misinformation if it supports that idea.

Well, it is a big news when the COO of Uber says it no? Not quite some small consultancy shop here.

But the COO did not say that. The headline was deliberately misrepresenting what he said.

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

#214

Post by Imustaskforhelp »

hansmayer wrote: post #133
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…

This should be the top comment. Also, I think its not that many people, including our Simon here, are not good at math. Its more like, some of them seem to be incentivised to not be cough, cough, "good at math". How else will the hype sell?

At a certain point, I genuinely feel like the best way this hype is being sold is by making people genuinely believe in it.

and in that sense, if Anthropic and OpenAI are able to create the projection that they can-be profitable despite finances seeming bubbly at best, I think that what happens is that these companies spew so much amount of content that people like Simon get into it too.

There is a deeper problem of people falling into AI psychosis too, in general, I am not sure if Simon has fallen into it or not

I think that the greatest point which can be made here is to not offload your thinking to others and to think about the situation yourself. Sounds familiar (looks like we are all off-loading our thinking itself to machines)

Side-note: As humans, we have a tendency to quickly judge or make quick decisions which stems from our times foraging and scavenging in jungles.

Another Side-note: at a certain point, I am unsure of how much to think about AI or not, certainly discussions about it that were happening 2 years ago weren't helpful in contexts that they are used now (well not in any way or form that a person discussing and getting into the weeds of AI 2 years ago is better than a person just getting into it say 2-3 months ago)

With the industry (moving so fast) [but that doesn't mean that you can't catch up with it, I feel like the fast word has made people think that they are falling behind which is imo wrong i suppose]*, It is basically unsure to me of any FOMO or anything if you aren't using AI already, I find this notion naive.

People might be making strong opinions (AI psychosis) and skills on the tools available at the moment the same done 2 years ago. We don't quite know about the tech as these are still black-boxes and how they progress and what these "AI skills" might survive or not in future. Heck, we aren't even sure if these tools might survive or not or wouldn't be made magnitudes more expensive simply to break even as they are given to us for the first time at percentages of the price.

I don't know if I should form (strong) opinions yet and also a question of its worth so much thinking efforts in the first place, probably just gonna do my own thing (the way I want to) which includes learning C at the moment. because learning is fun.

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

#215

Post by cj »

> Coding agents really did change everything. These are tools which burn vastly more tokens

The assumption here is that this is a positive thing.

But this very well could end up being a major negative long term by increasing the cost per user, reducing margins.

More usage = more cost = less profit.

It's not obvious that more usage is good. It's only good if revenue per user increases more than cost does. I'm skeptical about that.

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

#216

Post by sixhobbits »

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…

Pmf is this weirdly defined thing where "if you're not sure you have it then you don't".

I think it was clearly useful for months to people who had tried it and taken the time to understand it, but now that knowledge has spread to the point where wallet holders are convinced it's not just passing fad or hype so now pmf can be "claimed".

I agree it's weird to say "those people have pmf" though, usually it's something you define for yourself

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

#217

Post by bflesch »

duped wrote: post #149
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…

AI companies/users are filled with liars and grifters, so any numbers/outlook they report should be highly suspect.

There's a saying "the fish stinks from the head".

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

#218

Post by aspenmartin »

cryo32 wrote: post #201
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…

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?

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

#219

Post by jgbuddy »

specproc wrote: post #124
jgbuddy wrote: post #57

Earlier quoted context omitted.

You are making the assumption that the models are only used / paid for by 2.5% of the population (your knowledge workers value). There will be new value created by these models which people are happy to pay for which simply did not exist at all before. It is also naive to say that the hyperscalers are going to be expecting a return on this in 5 years, it will be entirely propped up by investments / IPOs as has been t…

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.

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

#220

Post by aprdm »

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…

"Next 5y" doesn't apply to AI factories
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