Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

I think Anthropic and OpenAI have found product-market fit

simonwillison.net

Post reply on HN
Print view View original

561–570 of 1001 posts

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

#561

Post by mcmcmc »

overgard wrote: post #506
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…

A couple of years ago Altman was saying the price of AI compute is going to drop 90% year over year or something like that, so I don't think they're nervous about talking about lowering their costs. They probably just haven't been able to lower their costs. You have to keep in mind that about 99% of their announcements are targeted towards investors (their most important revenue source..), so they're not going to be…

Ah yes, Sam “Not Consistently Candid” Altman

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

#562

Post by BoorishBears »

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…

> +20% speed for +20% spend isn't going to motivate a trillion dollars a year in spending.

I'm increasingly realizing this math is wrong, because LLM use is really sticky.

If Anthropic 100x'd prices tomorrow for their best model, so some companies offered 50% salary to keep 100% of your AI usage:

a) There are programmers who would take this deal. They've gotten to the point of doing what feels like even less than 50% of the work, developers were already pretty well paid, so they'll take it.

b) There are companies that'd offer this deal. Even if the only people who are taking this deal are not the best engineers, and the AI output is not the greatest, I think the last 6 or so years have seen a lot of companies realize capitalism is not as competitive as it seems.

They're not worried about putting out a worse product because... frankly, what else are you going to do? CF lay a bunch of people off, support gets awful: well you're probably not building a new Cloudflare in the next few years.

In the meantime the AI will get incrementally better, their market share will grow, and you won't be able to compete without taking the same faustian bargain.

-

Maybe I was just naive but it's making me realize how much we take for granted in the world. Both the quality and relative value of things don't have to go up over time. Quality can go down while prices go up, and nothing will really stop it. Competition should stop it, but competition is really slow and can be interfered with. And as prices go up competition gets really hard.

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

#563

Post by grttq »

downrightmike wrote: post #508
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…

Bubble popped when they increased prices. IPO may help cover some of the costs, but AI is very elastic and can be swapped out for any other company second to second. Which is why I think they bought up ram and disks like they did, to starve out competition and local models.

Correct. That’s exactly right.

The move to buy up ram is straight out of a industrial organisation textbook.

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

#565

Post by grttq »

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…

Correct the cost is part of the economics.

Thats why most here shouldn’t engage in the discussion - they parrot on about benefits without identifying and articulating the costs and moreover how it affects the firms financial position.

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

#566

Post by aspenmartin »

jimbokun wrote: post #544
aspenmartin wrote: post #199

Earlier quoted context omitted.

I don't know, if you've ever tried to build something at companies of that scale you run into incredibly boring problems "what data table do I need for X" and "who is the right person to reach out to for Y" and "they aren't answering me I guess I'll have to escalate" I don't think there is any shortage of great ideas at these companies, they are just extremely bloated. And I don't think its something like indecision…

Legal approvals won’t be in that category. You still want someone whose ass is on the line if they get it wrong.

Absolutely but you want to package it to them nicely and efficiently. The biggest blocker is legal and everyone else speak two completely different languages and we often don’t know what’s important to flag and legal doesn’t know enough to ask all the right questions. Also, many things can be templated, and in an industry where regulations and precedents change so quickly, agents are at the very least a good tool to flag issues (e.g. we were approved to use data X for Y but now decision Z negates this). The propagation of this information is not very effective now and legal review at tech companies, while absolutely essential, is somehow a worse experience than going to the DMV when it’s crowded.

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

#567

Post by recroad »

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 just don’t understand how people are getting negative value out of AI or even only 20% productivity boost. I can only conclude that people don’t know how to use agents.

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

#568

Post by yogthos »

peteforde wrote: post #528
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…

Ed is a smart guy, but you or anyone basing your opinion on what one eloquent journalist says is ultimately a risky bet, no matter how much his reporting hits your particular dopamine receptors. Please don't forget that Ed's entire brand identity is now 1:1 with exposing "AI" as a giant, unmitigated failure. That's a very specific flow chart to hook your caboose to when none of this is even remotely close to endgame.

We don't have to take Ed's word for it. Anybody who's capable of doing grade school math can see that the numbers simply don't work. These companies are literally spending orders of magnitude more money than they're actually bringing in. Cursor, who've been renting Claude, estimated just recently that a $200-per-month Claude Code subscription could use up to $2,000 in compute. https://www.forbes.com/sites/annatong/2026/03/05/cursor-goes...

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

#569

Post by grttq »

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?

Do you know what economic trade offs are?

Both implicit and explicit..?

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

#570

Post by jcmfernandes »

These folks have no lasting moat and they know it. We are still close to the November 2025 inflection point, so they had a clear advantage during these past few months. That will soon fade as open-weights models become really good, which is arguably already the case with DeepSeek V4.
Post reply on HN