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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

#621

Post by airstrike »

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.

True but that is maybe 5% of what is being promised by the average booster

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

#622

Post by peteforde »

HerbManic wrote: post #577
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.

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 p…

> It won't be a total wreck.

Honestly, I think it's very short-sighted to assume that all of this will be seen as any kind of wreck in the long term.

Normies are still catching up and reacting to chat-based LLMs.

HN types are further ahead of the curve, but still catching up and reacting to agentic coding and design workflows.

What often gets completely ignored is that entirely new modalities for how the underlying tech can be applied will continue to be demonstrated, and those will once again cause new ripples of excitement and disgust.

There are companies building world models and systems for protein discovery. Comparatively speaking, these approaches are barely in the zeitgeist today.

Deciding that we already have the data points we need to extrapolate how all of this plays out is like someone in 1974 deciding that microprocessors are just for accounting and inventory. Don't be that someone.

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

#623

Post by tomjakubowski »

yokoprime wrote: post #555
pembrook wrote: post #53

Earlier quoted context omitted.

API pricing drops DRAMATICALLY in enterprise agreements. As with pretty much anything priced on volume/usage. Enterprise deals are negotiated ad-hoc, the listed pricing is simply a jumping off point for the final negotiated discount. If you’re going to give 20,000 employees Claude code you are not going to be spending $1B per year on Anthropic tokens as if you gave everyone an individual API key. Just as Anthropic is…

As someone who has seen the enterprise deals, they are not subsidised in any way shape or form. Anthropic may wave the seat fee, maybe get lower "expected" consumption. This changes what the company pays up front. but token prizing is fixed.

To confirm, you're saying the enterprise deals you've seen match the prices per token listed here?

https://platform.claude.com/docs/en/about-claude/pricing

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

#624

Post by panarky »

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…

> 5% of every knowledge workers salary to go into tokens

In general, I don't think you can reason from the existence of potentially stranded investments back to revenue projections.

And when you frame this as percentage of salaries, that's a sneaky implication that this is only about reducing salaries and headcount, and not about adding capability, or doing things you couldn't do before, or making fewer mistakes, or capturing more revenue, or expanding margins, or competing more effectively.

That said, 5% of knowledge worker comp actually seems very low to me, given the capabilities, and considering the percentage of "knowledge work" that is absolute bullshit.

Two weeks ago I received an email from my HOA saying I'd been billed for a service I never asked for. So I replied to the email saying they'd made a mistake. There are now more than 30 messages in the thread, involving at least 8 "knowledge workers" at the property management company all passing the buck, and the problem is no closer to resolution.

An agent could wipe out all 8 of those bullshit jobs and solve my simple problem in five minutes instead of two weeks. Think of how many hundreds of thousands people are doing this nonsense just in the property management industry alone.

5% is nothing.

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

#625

Post by marcosdumay »

reducesuffering wrote: post #535
vonneumannstan wrote: post #470

HN is the least agi-pilled place on the internet

HN has been on every wrong side of AGI predictions since the founding article on OpenAI...

You mean that HN has been predicting AGI will happen, or you mean the Singularity happened earlier today and I missed it that humanity is already all killed?

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

#626

Post by tomjakubowski »

lrae wrote: post #422
pembrook wrote: post #53

Earlier quoted context omitted.

API pricing drops DRAMATICALLY in enterprise agreements. As with pretty much anything priced on volume/usage. Enterprise deals are negotiated ad-hoc, the listed pricing is simply a jumping off point for the final negotiated discount. If you’re going to give 20,000 employees Claude code you are not going to be spending $1B per year on Anthropic tokens as if you gave everyone an individual API key. Just as Anthropic is…

> Just as Anthropic isn’t paying AWS SES $10,000,000 to send 1 email update How much do you think emails cost? That number is just so far off? But besides that, running SES is also quite a bit cheaper than SOTA ai models with high demand (and comparatively) no competition. And quite a bit more pressure to make money (soon).

I think it was a figurative example. For what it's worth, $10,000,000 buys you 100 billion (1e11) outbound emails on SES at the sticker price ($0.10/1000 emails). One source puts the number of emails sent worldwide in 2024 at 132 trillion (1.32e14).

https://aws.amazon.com/ses/pricing/

https://www.statista.com/statistics/456500/daily-number-of-e...

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

#627

Post by timmg »

theschmed wrote: post #617
timmg wrote: post #591

Earlier quoted context omitted.

> 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.

There will be cheaper solutions. And they will generally be less capable than the more expensive ones. Just like most other products.

But my guess is that the cost of SWEs themselves mean that the more expensive ones will be worth the delta to most companies.

But time will tell.

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

#628

Post by lbreakjai »

altruios wrote: post #42
simonw wrote: post #16

Earlier quoted context omitted.

I'm not sure what you're pushing back against here. I spent $200. If I had been paying API pricing it would have been $2,180.16. The article is about how enterprise customers get charged API pricing, which means if I had been employed by one of those companies I would have cost them $2,180.16. What am I missing?

> If I had been paying API pricing it would have been $2,180.16 The point being made above is that API pricing is calculated... somehow... seemingly arbitrarily. Possibly untethered to the infrastructure costs entirely: which would be the basis of any 'value', however that holds the labor theory of value, which isn't accurate either. So how do you accurately price these tokens at all (other than through price-discove…

I don't really understand the holdup about that specific line? Anthropic publishes the cost per million of tokens, what's arbitrary about looking at your consumption, and doing the math?

Or are you saying that Anthropic is determining that cost per million arbitrarily?

If so, it'd be like asking to explain why things fall on the ground other than through gravity. Companies pick the price they think the market will bear, and adjust based on new information.

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

#629

Post by protocolture »

alexpotato wrote: post #377
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 was in college in the late 1990s/early 2000s and I distinctly remember an econometrics professor state the following: "As cable TV and Pay Per View came out, there were studies done about how many movies people would watch if given unlimited access to films. The results were bandied about as proof that we should build out all this infrastructure to support this line of business. When the data was further analyzed b…

>I feel like we are in a similar boat here where some people are assuming: >- EVERYONE is going to be using max tokens >- tokens will NEVER get cheaper due to improvements in hardware, software, design, market forces etc etc

I feel like the reverse assumption is being made, that the current model looks like IBM doubling down on Mainframes soon to become cheap enough to deploy everywhere, when the real action is that the costs coming down represents cheaper hardware or more efficient software, and that a big chunk of "cheaper" AI will be eaten by smaller products deployed by individuals. Whatever the Personal Computer of AI looks like is going to be more disruptive than just an API endpoint you can fling tokens at.

We already see this with things like chrome auto installing an LLM.

You cant tell me with complete certainty that theres a moat here for the people spending 1 trillion + on this infra.

>When the data was further analyzed by statisticians etc, it turned out that people claimed they were going to watch films 10-12 hours a day, every day of the week. Impossible.

I also think this applies to people suggesting that companies will sack workers for AI, when the costs of replacing everything someone does in a day is more expensive in terms of tokens (likely even at a reduced price) than just hiring a bloke.

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