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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

#481

Post by nostrademons »

regularfry wrote: post #456
nostrademons wrote: post #369

Earlier quoted context omitted.

Google's internally developed and sometimes even launched plenty of innovative new products in the past decade. Stadia, Fuchsia, federated learning, and the whole transformer architecture that underlies this AI boom are good examples. The problem is they get killed by some other executive who is afraid of their department looking bad by comparison. I think this is fairly illustrative of the challenges in AI becoming…

What I think is happening is that the scale of thing you can hope to build at a below-corporate scale should radically grow. Corporate environments should suffer for this, being that inefficient. > YCombinator was founded on that premise - small teams of founders and early employees could be orders of magnitudes more productive than the 1000s of corporate employees at their competitors. I think this is still true, bu…

I dunno if the employees were ever really needed for scale. WhatsApp famously had 300M users and 13 employees at the time of acquisition; Instagram was something like 50M users and 55 employees. If you know what you're doing software scales basically infinitely, and the employees are there to make the software just slightly more tailored to specific user populations (and because upward career mobility for managers involves having more headcount). Yeah, building a revenue model takes people, but Valve employs only about 400 people and makes billions, as do various quant hedge funds like DE Shaw or RenTech.

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

#482

Post by overgard »

Anthropic isn't actually profitable from what I'm reading, a discount briefly pushed them into the black. This guy makes the case well: https://www.wheresyoured.at/anthropics-profitability-swindle...

I'm skeptical that their current price raise is sufficient, and I'm also skeptical that most users/businesses will accept more significant price raises that will be needed. Especially for individual users, $200 a month is already incredibly expensive, I really don't think most people are going to be willing to pay more like $1000 a month.

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

#483

Post by red75prime »

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…

> 200m knowledge workers in the world, 30m developers

Your scope is too narrow. The companies target more than white-collar jobs. And $1t is around 0.5% of the world economy.

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

#484

Post by 20k »

freakynit wrote: post #106
onlyrealcuzzo wrote: post #62

Earlier quoted context omitted.

> We're talking about a world where you need 5% of every knowledge workers salary to go into tokens. They are assuming ~10% global GDP growth instead of ~3%. You probably don't need the same %s if the pie grows a ton. I'm highly skeptical we get that growth, but if you aren't, it makes it easier to digest.

I mean this case with AI-productivity fires itself back when we talk about GDP. The more AI causes productivity increases, the less and less number of workers will be needed. This will heat up the job market even more and bring salaries down. Net effect of this productivity increase: less consumption by the masses, even though you may be producing more good and much more efficiently. A third effect also comes into pl…

>Am I overthinking all this?

Nope, if AI were to realise the hype, you have to take into account macroeconomics. Usually this isn't a problem for most businesses

>The more AI causes productivity increases, the less and less number of workers will be needed. This will heat up the job market even more and bring salaries down.

People also underestimate that the reason why companies are so excited about AI isn't to increase productivity, its to fire workers and crack down on worker rights. They won't lay people off because AI means they don't need as many people to get the job done, they'll fire everyone while doing a much shittier job, because they hate having to abide by worker's rights and pay people

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

#485

Post by overgard »

supern0va wrote: post #278
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…

>according to Ed Zitron So, unsourced vibes from a shady guy whose entire empire is built on being against AI? I genuinely don't know how folks can continuously buy into anything he has to say after that Wired piece. The credibility there is seriously lacking. Please, continue to be skeptical of the labs. But people need to stop talking about this dude as if he's the Holy Grail of the anti-AI movement. It's going to…

Ed actually provides sources and goes into an incredible amount of detail as to how he came to his conclusions. The average AI booster just goes "I totally built ten businesses off vibe coding but I can't tell you anything because it's a SECRET!". And the mainstream tech media is so in the pocket of big tech and AI corporations that they might as well just publish their PR emails at this point. Yeah, I'll listen to Ed thank you very much.

I think it's telling that most critics don't address his actual points, but instead his credibility because he's a "hater".

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

#486

Post by numpad0 »

rrr_oh_man wrote: post #163
bigbuppo wrote: post #136

Earlier quoted context omitted.

AutoCAD is still the budget-friendly CAD program it has always been. You don't build big boats in AutoCAD.

Winch Design [0], which have built some of the world's largest superyachts [1], seem to be using AutoCad. [2] Afaik it's also the same with Lürssen (but don't quote me on that) [0] https://winchdesign.com/ [1] https://www.superyachts.com/directory/1516/winch-design/flee... [2] https://www.autodesk.com/design-make/articles/naval-architec...

Likely not the "base model" of AutoCAD.

Those tools are used in ways that they're integral to processes. They have their equivalents of ticket systems that are linked to code repositories with LFSs and bunch of IDE type tools and automated and manual test systems and build systems. Their equivalents of PR discussions and Selenium screenshots needs to check all boxes in the right ways for legal and traceability purposes.

Without all that might be $175/user/month but you're not shipping apps with just vi and bare gcc.

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

#487

Post by duped »

supern0va wrote: post #328
duped wrote: post #149

Earlier quoted context omitted.

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

I must admit that I am going to find it fascinating when we hit the point where it becomes nearly impossible to deny the efficacy of these tools. I have straight up had people, even in real life, suggest that I'm lying about my productivity gains or what I'm able to accomplish with them. Like, I understand the reasonable arguments against (I even agree with a few), but it's clear that some people have fully inserted…

I don't deny their efficacy, I'm saying that there's a massive crop of grifters and liars building them and using them.

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

#488

Post by christina97 »

surgical_fire wrote: post #351
skybrian wrote: post #293

Earlier quoted context omitted.

There's a good reason to look at it separately: if inference is profitable then they make money (or at least lose less money) when they get more customers, because any fixed costs are spread across more usage.

Depreciation is part of the cost of inference. Inference happens in GPUs that have a relatively short lifespan. Those GPUs are very expensive. Inference is expensive because a GPU can only process a certain amount of requests in a given timeframe. Remember that Anthropic is constrained in compute. If they are constrained, it means that those GPUs are not idle. If they have more customers, they will need more GPUs. If…

I think the key thing that depreciates is all their models. You train one at crazy cost and 6 months later it’s worth $0. If you ignore that depreciation you look much more profitable.

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

#489

Post by rstuart4133 »

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.

I get the impression the hive mind hasn't come to terms with the point that a model is optimised for certain tasks. It's like having someone ask you "is that a good hammer?". Good for what? There are claw hammers, sledgehammers, ball-peen hammers, club hammers, mallets, .... Yes, in a pinch, they can all bang in nails, but you wouldn't choose a dead blow hammer for that if you had a choice.

The Gemini Flash is very good at searches. Just about any low end model can toss out a poem. All the higher end models (open source and otherwise) seem to be able to churn out code that passes tests. The smaller, "less capable" ones are much faster at it, which means in the hands of a skilled practitioner are the best choice for that task. But they rapidly fall apart where there isn't a hard source of truth (like a good test suite) to grind against. Because of that you have to use a bigger model for bug finding. In that task the open source models tend to fail on larger code bases, where something like Opus still shines. I gather Mythos is an absolute monster, and unparalleled, and unavailable. I'm sure one of the reasons for that is it's so expensive to run.

Or to put it another way - you don't use a 100 tonne crane to pick up the shopping. And ... the smaller models will happily run on in-house hardware. You may not do it today because of the current DRAM price and integrated NPUs have just started shipping, but in 5 years time models will be running on your phone.

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

#490

Post by topaz0 »

deaton wrote: post #202
TimTheTinker wrote: post #117

Earlier quoted context omitted.

I thought Anthropic and OpenAI's combined CapEx has been source: https://isaiprofitable.com/

Maybe so far, but they've committed to well over a trillion in future capex.

And there's the indirect capex that their revenues will pay for indirectly, like in the case of oracle
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