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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

#801

Post by yokoprime »

danny_codes wrote: post #777
mesmertech wrote: post #15

Earlier quoted context omitted.

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.

It's driven a lot by the harness too. If you're using claude code, you're actively being pushed towards newer models, even though older ones work perfectly fine for your use cases

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

#802

Post by yokoprime »

RevEng wrote: post #731
mesmertech wrote: post #15

Earlier quoted context omitted.

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…

I strongly disagree. I'm an engineer - I'm all about the fastest, cheapest thing that meets the requirements. I don't need Opus 4.7, even for my complex programming tasks. It costs over 10x other models available that still give good enough answers. Those smaller models are also a lot faster to output tokens, which saves me time. Once the model gets good enough, the returns on bigger models diminishes quickly. I don'…

Same here, i can't say i've seen any difference in 4.6 vs 4.7 other than price

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

#803

Post by klausa »

simonw wrote: post #744
m3kw9 wrote: post #737

Earlier quoted context omitted.

Enterprises also use 200$ plans, they are not that stupid. They add a spill over API key for over usage.

OpenAI and Anthropic won't let them any more. Once you get above a certain size (I believe 150 seats) they push you onto the enterprise plans. I don't believe you have the option to keep with the $200/month flat rate subscriptions any more. I'd be happy to be convinced otherwise. (I dug into this a bit more and couldn't find anything in their consumer terms that say "you cannot use this personal account if your compa…

The purchasing department _really_ doesn't like it, but it's the corpsec department that will really want to murder you for using "personal" accounts to interact with corporate codebases.

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

#804

Post by vayup »

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…

> They've got, ballpark, $5t to $10t to make back in the next 5 years, or the hardware buildouts will start getting written down.

Depreciation and write-offs are about accounting models. Hardware will still be running after five years and still be making money. They may not be as efficient as the new hardware, but they will still be making real money even though they are valued at $0 in the books.

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

#805

Post by [deleted] »

bradleyjg wrote: post #640
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…

> That's a _huge_ shift. Most people I know cite +20%-40% velocity with these tools, against the actual work their company cares about doing. We all have our own observations and mine don’t significantly diverge. But that’s bottom up. At this point shouldn’t we be seeing it top down? If we are beyond potential and into significant productivity gains, why isn’t that showing up for the customers? Why didn’t delta airli…

[deleted]

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

#806

Post by fittingopposite »

FuriouslyAdrift wrote: post #246
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 work for a tiny little company ($150MM annual rev with 9% net) and we are already looking at dropping $100k on hardware to run local models because, for us, they're "good enough." Our estimated spend for AIaaS would exceed that cost in less than a year. In a few years, there will be hardware capable of running frontier models good enough for most things at accessible prices for even tiny companies.

Agree. You have these tipping points when a model is good enough to do some task. Yes, a better model will further improve your capabilities but the unlock is at a certain intelligence level. We see this also with humans. People with very low intelligence can't learn to read. Once you cross a certain threshold of intelligence you can learn to read. More intelligence doesn't really help you in the task of reading. A person with an IQ of 160 is not substantially better in reading than someone with an IQ of 85. If your IQ is 50, you might not be able to learn to read at all.

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

#807

Post by byzantinegene »

lumost wrote: post #516
materielle wrote: post #211

Earlier quoted context omitted.

I'm about to leave a shallow comment, but I am a bit skeptical of the supposed drop in inference costs. If AI labs saw a lot of potential there, they'd surely be bragging about it non-stop? So the fact that publicly available information is conflicted is probably a sign that at the very least, the numbers aren't amazing. Yes I know there's no evidence and this is lazy reasoning. But there's probably a bit of truth to…

For equal capability tokens, there has been about a 10x drop in cost every 6 months. We are still chasing the best because the best is moving rapidly, but it’s a simple thought experiment to work out what the cost to serve an 8B model from 2 years ago is in a world of 2T models. Note: parameter counts are illustrative. Concretely, qwen3.6 27B delivers opus 4.5 capability at 1/27th the cost on openrouter. Single chip…

8B models would be consider obsolete in the world of 2T models, at least if we're talking about the competitiveness of OpenAI/Anthropic. The only reason why they are valued so highly is their supposed dominance at the top end.

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

#809

Post by amarant »

golem14 wrote: post #324
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…

Why would any company brag about their margins ? Yet they do, to attract investors.

I mean, did anyone expect them to not have margins? Why keep it secret?

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

#810

Post by jillesvangurp »

slopinthebag wrote: post #620
jillesvangurp wrote: post #476

Earlier quoted context omitted.

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.

I don't think you are appreciating the physical constraints here. Deepseek doesn't really have the hardware in the US or EU to do anything at scale.

Sure, you can self host a non-frontier OSS model yourself; including Deepseek. And no doubt some people will pay one of the companies I mentioned to rent the infrastructure to do exactly that. Much of the rest of the world will be paying directly for direct access to the frontier models.

As for the legal/compliance stuff, I recommend you don't take any big decisions on that front without consulting lawyers. My understanding of that is that most serious companies in the EU have to take these topics pretty seriously. I'm sure in the US, hosting all your data and secrets in Chinese data centers isn't a whole lot less controversial.

The Chinese could of course choose try to match the current levels of investment Google, OpenAI, Anthropic, etc. are putting into local infrastructure. But as far as I know they aren't and there are probably a few political blockers for that.

Without infrastructure, their role is being a niche player in these markets. It doesn't really matter how good they are if they can't scale to most of the market.

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