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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

#611

Post by Gigachad »

dmix wrote: post #580
yokoprime wrote: post #546

Earlier quoted context omitted.

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.

It's more the tech leaders than the internet. Sam Altman, Jeff Bezos, Eric Schmidt and such get up on stage or interview regularly with a shit eating grin telling us all about how they are coming for our jobs, will make us obsolete, and there is nothing you can do about it.

It's a natural response for society to despise these people who have such contempt for us. It's almost embarrassing these days being at a social function and telling people I work in software, it's got a negative stigma almost like working in gambling or the military.

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

#612

Post by brazukadev »

simonw wrote: post #533
noddingham wrote: post #530

I feel like there's a bit of AI psychosis in this particular post. >"These are tools which burn vastly more tokens, but are also quickly becoming daily drivers for the work carried out by extremely well-compensated professionals." >"Somehow this fragment turned into headlines like Uber’s COO says it’s getting harder to justify the money spent on AI tokenmaxxing, because the market for stories about AI failures remain…

What's the psychosis?

> because the market for stories about AI failures remains enormous

How enormous? 1 trillion dollars, 2, 10 trillion enormous?

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

#613

Post by solomatov »

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, 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.

Currently, the difference is substantial, but what happens if capabilities saturate?

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

#614

Post by Salgat »

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…

My hope is that hardware improvements (better node densities every 2-3 years, better designs, etc) will pick up the majority of the savings for these companies in the future, assuming LLM performance starts to taper off with diminishing returns.

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

#615

Post by bg24 »

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…

Is it possible that you are narrowly sizing the opportunity? While PMF does not always mean that early pioneers will be the leaders, I think the market itself goes beyond knowledge workers and developers. Agents, robots, drones etc will all use LLM or some world model.

I am rather more concerned about competition from CHINA. With how Huawei (2000 -> 2020) crushed every other telecom company and went from nobody to the most revered leader in 20 years, and with the depth of leadership in manufacturing and work culture, if China surpasses USA in AI, all US companies lose.

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

#616

Post by grttq »

overgard wrote: post #594
brokencode wrote: post #43

Earlier quoted context omitted.

Usage costs will come down with better hardware. Hardware is improving rapidly each generation.

A lot of the new hardware requires retrofitting existing datacenters for appropriate cooling, or is waiting to be installed because the new datacenters haven't been built yet. By the time they're installed it's likely a lot of Blackwell GPUs are going to be very out of date. Newer hardware is turning into huge capex bills along with the corresponding depreciation costs. Basically, it's not the same as plugging a new…

Technological obsolesence is a bitch eh.

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

#617

Post by theschmed »

timmg wrote: post #591
sixhobbits wrote: post #216

Earlier quoted context omitted.

Pmf is this weirdly defined thing where "if you're not sure you have it then you don't". I think it was clearly useful for months to people who had tried it and taken the time to understand it, but now that knowledge has spread to the point where wallet holders are convinced it's not just passing fad or hype so now pmf can be "claimed". I agree it's weird to say "those people have pmf" though, usually it's something…

> Pmf is this weirdly defined thing where "if you're not sure you have it then you don't". I'm not sure if this runs counter to your point or not, but: I don't see any future where LLMs aren't a core part of Software Engineering. The horse is out of the barn. There is no going back.

Yeah but the product is not “LLM” it’s “proprietary frontier model LLM paid by the token”.

And I don’t even necessarily disagree with OP! It’s more like the competition is shifting so quickly that your competitors could undercut your PMF in a blink of an eye.

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

#618

Post by lbreakjai »

onlyrealcuzzo wrote: post #396
freakynit wrote: post #106

Earlier quoted context omitted.

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…

> The more AI causes productivity increases, the less and less number of workers will be needed. Why does this have to be the case with AI but it didn't have to be (and wasn't) the case with the steam engine, electricity, the automobile, or the computer & internet? Certainly, AI could be different. It's curious to me why the vast majority of people on here think it must be different.

Because the previous revolutions only automated a small subset of jobs, it didn't automate manual work.

Some people take the view that AI could make knowledge work largely irrelevant. Any niche humans could carve for themselves would only live long enough to generate training data for the AI to automate.

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

#619

Post by grttq »

overgard wrote: post #603
aenis wrote: post #549

The end game here is going back from a model where a bunch of product and tech management people sit in the U.S. or Europe, and try to manage thousands of mediocre talent sitting somewhere far away. The new model is you give those coding tools to good engineers colocated with your product people, and you ship good stuff much faster. If you can achieve such a setup, the token costs can be $50k per seat per month and y…

Good lord, what company would want to spend 600k per employee just to go maybe %20 faster (what the studies seem to show is a realistic estimate for productivity gains), I'm building a product right now with some AI coding (despite my negative sentiment about AI in general they are useful). I am both the product person and the engineer, and I'm pretty decent at using it, so according to the hype I should be seeing li…

To me the question is, can the frontier labs make the variance of output lower + make the output of higher quality to justify their prices?

If not lower priced chinese offerings will be better as its cheaper per token - giving you more attempts to offset the variance.

My feeling on the former is no... I believe they tried really hard but they've settled on pure marketing now to attempt to fight off the chinese with perceived superiority in quality.

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

#620

Post by slopinthebag »

jillesvangurp wrote: post #476
sourcecodeplz wrote: post #6

With deepseek and xiaomi mimo models slashing their prices 99%, I don't see a great future for openai / antrhopic with regards to their 1T valuations. Maybe 1T valuation will be the whole market, West + East.

Most of the corporate world in the EU or North America will be hesitant to rely on Chinese AI providers. There are some very real blockers for that for things like data security, compliance, etc. And recent geopolitics don't help. Legalities aside, you need to look not at the model quality but at the infrastructure needed to scale these models from tens (now) to hundreds (soon) of millions of users. Only a handful of…

Run Deepseek on Deepinfra then? Or Fireworks if US-based is important. None of these are real issues outside maybe convincing your legal team to do a bit of homework.
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