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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

#491

Post by teiferer »

simplyluke wrote: post #366
doug_durham wrote: post #356

Earlier quoted context omitted.

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.

> that you can run locally That's doing a lot of work here. The future I see isn't most companies buying hundreds of thousands in hardware to run models, it's them adding a line item to their AWS bill. Inference costs on the larger hosted open source models are dramatically lower than the frontier labs API pricing.

The future I'm seeing is AI coprocessors running inference locally in most devices that today have a CPU. Just look at how powerful your mobile phone has become compared to your desktop computer 15 years ago and compared to a main frame 30 years ago.

The days of requiring a data center to run anything resembling opus 4.6 are already counted. (But the industry will fight hard to get people to keep paying the Claude tax.)

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

#492

Post by sofixa »

arbuge wrote: post #332
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.

> 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.

.> Hardware costs haven't exactly been cratering recently.

No, but local models have been booming in performance/quality improvements. The RAM shortage won't last forever (more supply will come online when if demand doesn't diminish), and then the math would be pretty easy.

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

#493

Post by benhurmarcel »

realo wrote: post #22

200$ per month per seat is nothing . A single 3D CAD license pack for the guys in our R&D group costs multiple thousands of dollars per seat, per month. It's about time software seats get some love too.

Now add up the engineer’s salary and you’ll find that software seats already cost more than those R&D ones.

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

#494

Post by jimbokun »

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 on the order of 1% to %2 of global GDP per year just to pay for their hardware commitments.

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

#495

Post by xboxnolifes »

hansmayer wrote: post #392
supern0va wrote: post #328

Earlier quoted context omitted.

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…

In the meanwhile, Google AI search still says the next year after 2026 will be 2028.

Ok? Then don't use AI to do arithmetic. It's not their strong suit.

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

#496

Post by red75prime »

vablings wrote: post #291
jstummbillig wrote: post #286

Earlier quoted context omitted.

> 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. This is where the napkin math is breaking down in a big way. There is absolutely no reason to assume this will only impact "knowledge workers". Farmers use computers. Farmers will use AI.

AI for what? None of the AI a farmer could or would use would be any more meaningful that light chatbot usage or already existing computer vision/gps

And around 400k H-2A workers. Humanoid robots... Who works on them I wonder.

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

#497

Post by overgard »

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…

One thing I genuinely don't understand is these companies are constantly taking in incredibly large amounts of investments, so presumably they're giving up large chunks of equity or these are loans that need to be paid back or they're committing to spending obligations they're very unlikely to be able to meet.

So besides the insane hardware buildouts you're correctly mentioning, I don't understand how anyone that invests in these companies is supposed to make their money back in any sort of reasonable timeframe?

The cynical part of me is looking at what happened to the NASDAQ rules recently where essentially index funds are going to be forced to buy SpaceX shares much earlier than they previously would have (ie, before the price has a chance to reach it's real valuation). Which, um, I'm guessing these stocks are going to drop pretty hard when people start looking at the financials of these companies.

My suspicion is that the point of these IPOs is essentially to dump the bill on the unwilling public by forcing various institutions to buy it (ie, your 401k or pension is buying this shit), and maybe their investors can squeeze some money out of this before the stocks reach an equilibrium that's probably like 1/10th of what they're "valued" at.

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

#498

Post by Ucalegon »

swalsh wrote: post #469
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, especially qwen are pretty dang good. But its not opus 4.6, the evals dont tell the full story. I question the assumption open source models are 3-6 months out.

Its not just about the quality of output, but you also can finetune them to proprietary needs, if the skillsets are their internally, to make them better without governance risks. So being SOTA doesn't matter as much, since generalized tasks are not what matter most to companies, its the specialization relative to business need or internal datasets.

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

#499

Post by mbesto »

simonw wrote: post #190
mbesto wrote: post #184

> but I suspect there’s a more important factor here: I think they’ve finally found product-market fit Ahhh the classic startup term that's definition is nebulous. But also, since when does any definition of product/market fit mean a product is profitable? And profitable in what sense? Unit economics? Overall company?

Oh I'm absolutely taking advantage of the fact that "product-market fit" has a bit of a nebulous meaning here. It's a great hook to build an article around. My core point is more that April 2026 was the point when Anthropic and OpenAI finally appeared to have figured out a credible business model.

> My core point is more that April 2026 was the point when Anthropic and OpenAI finally appeared to have figured out a credible business model.

How so? What's specifically changed? We still don't know what their unit economics are and everything you've documented is basically speculation at this point.

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

#500

Post by TimTheTinker »

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.

Here's the question - does that future spending already appear on partners' balance sheets
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