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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

#571

Post by oblio »

recroad wrote: post #567
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.

Are you mostly creating new things or integrating with complex, undocumented, untestable systems?

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

#572

Post by grttq »

CuriouslyC wrote: post #408
grttq wrote: post #323

Earlier quoted context omitted.

Swear people like you were hyping the frontier labs so hard not long ago. Funny to see the change of tone - a lesson for people not to get too ahead of themselves.

There's no change in tone, I'm still very bullish on the tech, Claude in particular just isn't worth the API price, which I've always felt was too damn high. I have paid for Gemini 2.5 Pro, Deepseek 3.2/4 and GLM 5 tokens happily though.

Lmao you won’t admit it will you?

You financially benefit from stuff like agents. Of course you will be the last to admit publicly when things aren’t quite heading in the right direction. The gap between hype and reality is ever increasing.

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

#573

Post by everforward »

dirck-norman wrote: post #187
specproc wrote: post #124

Earlier quoted context omitted.

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…

Feelings aren’t fact. A lot of data shows the doomerism is not reflected in the actual numbers and much of it has to do with rapid inflation and continued vibes. Consumption has risen, inflation adjusted wages have risen for blue collar and white collar alike. Most social mobility has been the middle class moving into the upper middle class, not moving to the lower class. The main thing holding people back is the hou…

> The main thing holding people back is the housing crisis. This is orthogonal to the value creation of businesses.

This feels wholly at odds with saying most social mobility is upwards. So most of the social movement is into a class where a home and vacations are a given, but we also have a growing class of people who can't afford a home? Per BLS, average real wages are down 0.3% YoY https://www.bls.gov/news.release/realer.nr0.htm .

> Value creation is growth. If it didn’t exist the S&P would still be 42.55$.

This reductively assumes "value creation" is the only effect on the S&P pricing. You'll note a ton of graphs correlate with it, e.g. https://tradingeconomics.com/united-states/inflation-cpi is the US inflation rate, which also tracks the S&P pricing. Ie if a company is worth $100 a year ago and inflation was 4%, I'd expect to pay $104 for their stock with 0 value creation whatsoever.

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

#574

Post by lunar_mycroft »

mesmertech wrote: post #15
binary0010 wrote: post #12

So how do openai and anthropic plan to keep customers when GLM-5.1 is just as good and open source and a lot cheaper? I don't see the business model working. My closest friend actually does automation software for large companies. He does not use Claude or openai at all. He primarily uses gpt 120b on cerebras and glm-5.1 for heavy thinking work. And some other small models for various tasks. All open source. And thes…

For coding you always want to go with the best model in the category, not something that would be the best model if we went 1 year back which GLM 5.1 is, and I'm saying that as a big fan of GLM cause I run a translation site where GLM is good enough for the price. Most of the money right now is in coding. Openai and Anthropic just have to be 6 months ahead of SOTA open source models and they'll capture most of the en…

> For coding you always want to go with the best model in the category

This is transparently false, because the best "model" is still competent human developers. They're just more expensive. If you're willing to use current LLMs at all, it means you're willing to sacrifice quality for a better price, and your disagreement with the comment you were replying to is entirely about what the optimum tradeoff is.

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

#575

Post by simonw »

yogthos wrote: post #568
peteforde wrote: post #528

Earlier quoted context omitted.

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/20…

Interesting story. Here's what it says:

> According to a person familiar with the company’s internal analysis, Cursor estimated last year that a $200-per-month Claude Code subscription could use up to $2,000 in compute, suggesting significant subsidization by Anthropic. Today, that subsidization appears to be even more aggressive, with that $200 plan able to consume about $5,000 in compute, according to a different person who has seen analyses on the company’s compute spend patterns.

The load-bearing detail here is if that means $2,000 of internal server+electricity costs, or $2,000 if they were to charge at their API pricing instead of the subscription cost.

The latter is how I understand these things to work right now. If it's the former then yeah, Anthropic are losing a TON of money on those subscriptions.

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

#577

Post by HerbManic »

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.

Pretty much. Ed does a lot of great work in digging through all this stuff but his conclusions always feel far too doomer oriented. OpenAL should have closed 5 times by now if you have been following his assertations from the start.

There will be big parts of what he says are true once the rubble settles but it will not be anywhere near what he is predicting. How that will shape out may not be great for the average person, what money shuffling tricks will be used? But it won't be a total wreck.

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

#578

Post by [deleted] »

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…

[deleted]

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

#579

Post by hintymad »

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…

> 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.

Just realized something: if one worries about losing jobs to AI, token's high unit cost is good news. To say the least, high cost would delay the displacement, if any, right?

In the meantime, someone shared the below on X. I guess the moral of the story is that "good enough" does not just displace software engineers, but also models.

   > I Went From $3,000/Month on Claude to $5/Week on DeepSeek

   > And honestly?80% of my work is identical.

   > For the past two months, I was burning $3-5K monthly on Claude Code. Every idea from design to development to testing - full end-to-end automation, even simulating users to test my products and provide feedback.

   > Extremely token-intensive. But Claude's caching sucked, making it insanely expensive.

   > Then I discovered DeepSeek V4.

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

#580

Post by dmix »

yokoprime wrote: post #546
simonw wrote: post #533

Earlier quoted context omitted.

What's the psychosis?

Sometimes it feels like theres this opposite AI psychosis, where anything AI is bad and boils the ocean, takes our jobs and makes RAM expensive. Its a component in the current economy, but things like tariffs, closing the strait of hormuz etc is equally bad for the economy. Anyway, just find it strange to be so militantly anti a certain tech.

That’s the modern internet. What sells is the most overdramatic doom and gloom take possible.
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