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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

#771

Post by simonw »

AndrewKemendo wrote: post #764
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…

Your severely underestimating the idea that people are just not going to use developers for certain things in the future For example I don’t anticipate somebody making a living off of making website ever again Somebody with absolutely no technical experience who needs a website for their business can now make one with almost no money whatsoever. That’s good enough for their business. and the code can be totally shit…

Why would a small business use a coding agent to build a custom website when they could use something like Squarespace or Shopify with prebuilt templates that mean they have to know even less than if they were to use some kind of chat UI?

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

#772

Post by tomhow »

827a wrote: post #108

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

#773

Post by fulafel »

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…

The most often cited figure for knowledge workers seems to be 1B, an order of magnitude difference to your assumption.

Also, according to https://isaiprofitable.com/ total industry spend is also an order of magniture less than what your assumption is.

So in your model 0.2% of knowledge worker salaries instead of 5%, IF all the AI players win the investing gamble and do infact make back their money.

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

#774

Post by DeathArrow »

I think we are overly fixating on Anthropic and OpenAI.

Since there are lots of models that are competitive and have a much better pricing, both OpenAI and Anthropic seem inefficient. I don't get why someone would want to buy shares after IPO apart from fomo and artificially built enthusiasm.

Anthropic and OpenAI may well be the Altavista and the Yahoo of the AI age.

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

#776

Post by johnecheck »

IX-103 wrote: post #729
whatshisface wrote: post #173

Earlier quoted context omitted.

Here are a few thoughts: - The publicly available information about how inference costs compare to training costs is conflicted. EEs involved in datacenters talk about power usage spikes during training runs as if they were a major factor in the designs, but academic papers discussing cost-optimal scaling confidently treat inference-time compute as a major factor. - On the side of the balance indicating that training…

I don't see how it would be possible for inference costs to dominate training costs, even after amortization. Training involves multiple passes over the entire training dataset, ideally in large batches where you can perform inference on as many samples as possible simultaneously and then perform backpropagation to adjust the model weights (which is about as expensive as inference). Let's consider the size of the dat…

Not saying you're wrong, but I'll note why inference might dominate despite everything you mentioned.

A given model is trained once but applied N times. A large enough N will dominate training, no matter how complex and costly it was.

But how long is a model useful for? How often will labs need to train new models? Time will tell.

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

#777

Post by danny_codes »

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…

Why? If it's good enough, it's good enough. Though I read the code that gets vibed so maybe my use-case is different.

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

#778

Post by danny_codes »

j_w wrote: post #137
antman wrote: post #33

The costs are exorbitant and most software is not produced by companies with such a huge moat. Anthropic made a profit through their recent bait amd switch pricing. There is zero useful insights online to indicate whether this might die due to commoditisation with good enough open models or fail the race to get more people subsidising unsustainable growth with other people’s money. Who knows? In any case they dont se…

Continuing with your skepticism: > Stories are circulating of companies surprised at how expensive their LLM bills are becoming from usage by their staff > Enterprise customers are now paying API prices How long before enterprise customers start to question the bill? Anthropic goes from not making money to doing pricing shakeup, and now they are making money and the biggest spenders are shocked at prices. Seems like…

And switching cost is basically zero, so there's not much friction. In my harness it's literally just saying model=X

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

#780

Post by iancmceachern »

It reminds me of this Steve Jobs Clip:

https://youtu.be/0lvMgMrNDlg?si=QkkOnngYTjaSPlIy

He said, so many years ago, that there will become a time where computing power is so prevalent that we will stop using the person to make the computers job easier and start using the computer to make the humans job of interfacing with it easier.

But in this context, it would mean the other side of increase productivity is decreased time to do the same work. These are the same thing.

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