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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

#331

Post by hansmayer »

aspenmartin wrote: post #312
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!

> "in 6 months" that AI will be doing all of SWE work I assume this is the quote you're referring to from Davos? "I have engineers within Anthropic who say I don’t write any code anymore. I just let the model write the code, I edit it. I do the things around it… we might be six to twelve months away from when the model is doing most, maybe all of what SWEs do end to end." that was in Jan, he said "might" and he said…

Reasonable things? He said the same shit over and over over the last several years. Yes, lets hold him accountable - you don't make such "oopsies" accidentally, several times in a row.

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

#332

Post by arbuge »

FuriouslyAdrift wrote: post #246
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 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.

> 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.

What makes you so confident about this prediction? Hardware costs haven't exactly been cratering recently.

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

#333

Post by 10000truths »

amilios wrote: post #300
slopinthebag wrote: post #255

Earlier quoted context omitted.

Do more planning yourself, be smart about the context, break down tasks into smaller components, give it more guidance. You can't just lazily prompt it to complete large features autonomously and expect good results.

But if the closed-source models can do this without the additional effort, that's a significant gap, no?

The point is that the price gap is so much larger than the capability gap, that even with the extra compute needed to make up for the lack of capability, you can still come out ahead in terms of amortized $/work done.

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

#334

Post by superxpro12 »

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…

It's going to be a typical saturation curve. A lot of upfront tokens spent on things that have stockpiled over the years, and then the derivative on token spend trends to zero as the users run out of immediate things to try. Sure there will be ongoing maintenance and experiments, but it wont be nearly as close as the initial inrush.

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

#335

Post by bigfishrunning »

amilios wrote: post #300
slopinthebag wrote: post #255

Earlier quoted context omitted.

Do more planning yourself, be smart about the context, break down tasks into smaller components, give it more guidance. You can't just lazily prompt it to complete large features autonomously and expect good results.

But if the closed-source models can do this without the additional effort, that's a significant gap, no?

See that's the thing, they can't. Every model needs hand holding and guidance.

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

#336

Post by hansmayer »

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…

> I welcome you to also hold yourself accountable in the coming months if this trend continues. ;)

My company did not swallow hundreds of billions in shady investment deals and is not publicly traded. We work with real money, and the revenue on our books is the revenue that is actually booked, not fake revenue we plan in 2 years time to maybe happen. So no, I am not going to hold myself accountable. But people who work with other people's money should be absolutely held accountable when their wild imaginations don't come true, repeatedly, quarter after quarter, year after year!

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

#337

Post by yalogin »

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…

To get that revenue and adoption they have to vastly increase their infrastructure spending. If they are currently losing in even the 200/month plans how is it sustainable?

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

#338

Post by simonw »

Imustaskforhelp wrote: post #214
hansmayer wrote: post #133

Earlier quoted context omitted.

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…

I didn't exactly say that they were about to become wildly successful companies. I suggested that they had "found product-market fit" - not too impressive for more than a decade of work - and that their revenue may even be "enough to start covering their costs".

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

#339

Post by Tuna-Fish »

golem14 wrote: post #324
Tuna-Fish wrote: post #248

Earlier quoted context omitted.

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…

Why would any company brag about their margins ? Yet they do, to attract investors.

The key AI labs are not public companies, they are at liberty to brag about their margins to potential investors in private.

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

#340

Post by chasd00 »

lunar_mycroft wrote: post #182
solenoid0937 wrote: post #138

Earlier quoted context omitted.

> 20% if you're a developer. 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. Of course it will. The value of an employee is a multiple of what they get paid. If you pay an employee $500k and they make $2M for your company (like Meta), then…

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.
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