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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

#861

Post by zjaffee »

seanp2k2 wrote: post #141
regularfry wrote: post #107

Earlier quoted context omitted.

The bottleneck has moved from producing a thing that works to knowing that the thing was the right thing to build. The more of the latter they can take on, the fewer knowledge workers are needed at all . So rather than 5% of every knowledge worker's salary going into tokens, 100% of the knowledge worker's total employment cost goes into tokens and you get a 20x productivity boost as a theoretical minimum across those…

>The bottleneck has moved from producing a thing that works to knowing that the thing was the right thing to build I would argue that that's been the case for quite some time before AI. As an example, what innovative amazing world-changing products have Google or Meta launched in the past decade with their very high numbers of very talented and highly-compensated engineers? The issue with most big tech companies are…

If you really think this you simply have no theory of mind for this stuff. There are tons of immensely successful products in the ad space that both of those companies have launched. They don't need to innovate in the product or technology space (doing so certainly makes a big difference in having more placement for ad real estate), but to suggest there have been no real innovations (specifically engineering specific innovations) related to ad tech would be completely ridiculous to suggest. You don't need to change the world to get rich, just look at wall street where major innovations have been made in the pricing models of fixed income securities.

Second to this are countless other areas that have a major impact on the companies bottom line that are entirely engineering driven, especially at google given they are a cloud provider and have meaningfully grown the workspace business and launched waymo in this time.

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

#862

Post by pas »

bigbluedots wrote: post #724
spamizbad wrote: post #285

Earlier quoted context omitted.

I will also tell you, as someone who works at a company that's trying to remain profitable, that token spend has caught the eyes of finance and much like cloud spend they've already started applying pressure to control costs. This May my team is protected to use 30% fewer tokens than we did in April - this was by intention. I suspect we'll drop more in June.

It might be time to start interacting with agents using grug speak only

https://github.com/JuliusBrussee/caveman

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

#863

Post by klausa »

irishcoffee wrote: post #401
datadrivenangel wrote: post #386

Earlier quoted context omitted.

what models are you using on that? My experiences with apple hardware have convinced me that it is not really good enough for coding locally.

It isn’t the models, it’s the closed api and the tooling associated with it. It’s driving me crazy how not-talked-about this is.

You can point both Codex and Claude Code at a local model and they'll work just fine. Codex even explicitly supports that as a feature! [1]

With a nice UI on top, for the desktop app too: [2]

[1]: https://developers.openai.com/codex/config-advanced#custom-m...

[2]: https://docs.ollama.com/integrations/codex-app

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

#864

Post by amelius »

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.

Eh, one question. Where do you intend to buy the hardware if datacenters take over the market?

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

#866

Post by unmole »

oblio wrote: post #841
unmole wrote: post #710

Earlier quoted context omitted.

> They've got, ballpark, $5t to $10t What are you basing this on? For reference, Anthropic raised ~$70 billion in total and OpenAI ~$190 billion. Why do they need to make 20-40x that?

All the planned infrastructure commitments. At least for OpenAI I think they're supposed to spend $300+bn in the next few years.

I still don't understand why that means they need to make 5-10 trillion over the next 5 years.

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

#867

Post by MaKey »

cassianoleal wrote: post #75
binary0010 wrote: post #28

Earlier quoted context omitted.

Yes I'm an engineer (20 years most in games/graphics industry) and only use it for code. I've been using glm 5.1 this week a lot. I went in expecting another "decent" but not really "up to standard" open source model. I highly doubt I'll ever use Claude again. I think you are wrong about Claude being any significant level better

I've been mostly coding with GLM-5.1 as well and I agree with you. DeepSeek V4 Flash is another very good surprise. Incredibly cheap, fast and effective.

I've been using DeepSeek v4 Flash with OpenCode for the whole week to refactor a Terraform code base I inherited and it worked surprisingly well.

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

#868

Post by girvo »

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.

> takes our jobs and makes RAM expensive

I mean it is doing both of those, so thats fair to be honest.

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

#869

Post by amelius »

MASNeo wrote: post #433
FuriouslyAdrift wrote: post #246

Earlier quoted context omitted.

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.

On prem AI makes sense for more than just the cost. More control, IP, model improvements you can keep, data privacy to name a few. People will realize that AI is not like compute the moment they get their own knowledge sold back at a premium.

> People will realize that AI is not like compute the moment they get their own knowledge sold back at a premium.

But what if your competitors sell their knowledge to AI companies?

Then you're still screwed.

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

#870

Post by gcr »

For an alternate albeit somewhat contrarian view, also see Ed Zitron’s piece that add context to Anthropic’s profitability: https://www.wheresyoured.at/anthropics-profitability-swindle...

TL;DR Ed argues that the deal between Anthropic and xAI could have been negotiated in such a way as to make Anthropic only appear profitable during its “ramp-up” period in June, which incidentally is also the month that Anthropic is making tons of other pricing changes.

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