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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

#891

Post by vidarh »

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…

I have stats from a harness that tells me glm5.1 is far more cost effective for us than Opus with the rate of defects and rework taken into account. In fact, with a decent harness I'm now increasingly favouring eHaiku over Opus for execution too. Opus is still worth it for planning, though, and far better at one-shotting things.

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

#892

Post by 3form »

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.

>Anyway, just find it strange to be so militantly anti a certain tech.

You know, that's fair. I'm much more against super-rich investing hundreds of billions in the things they don't understand, creating massive disruptions in their wake.

AI didn't create stupidity and greed. In the end, it's just another tech. I'm just tired, time and again, of people who I would hope to know better (and repeatedly they prove me wrong).

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

#893

Post by rgrieselhuber »

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 hear this and I keep wondering what I’m missing. My productivity has shot through the roof over the last year as a result of having these tools. I’ve been able to unlock projects that I’ve wanted to do for years.

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

#894

Post by wheresmylogin »

DrewADesign wrote: post #632
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…

Because they can think more than one quarter into the future? Why on earth would someone adopt something into their core workflow that was fantastically unprofitable? Uncertainty and business don’t mix. Most people aren’t hype-eating bacteria that only care about maximizing their next paycheck.

One reason is that all the code you write with this goes in your private git. If using AI no longer is possible because of cost, you can still profit a lot from what you did with it before.

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

#896

Post by lunar_mycroft »

noname120 wrote: post #824
lunar_mycroft wrote: post #574

Earlier quoted context omitted.

> For coding you always want to go with the best model in the category This is transparently false, because the best "model" is still competent human developers. They're just more expensive. If you're willing to use current LLMs at all, it means you're willing to sacrifice quality for a better price, and your disagreement with the comment you were replying to is entirely about what the optimum tradeoff is.

It was true 6 months ago, not anymore. Frontier models now outperform developers on many tasks, be it on quality/readability/maintainability, and let’s not talk about speed…

I've seen the code they produce without extensive help from human developers, this is clearly false.

Good to see the classic "yeah the models weren't good enough six months ago, but this time they actually are, promise! Please forget you were hearing the exact same thing six months ago!" is alive and well though.

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

#897

Post by oxedom »

jreynar wrote: post #889

I may be biased because I work on an AI powered enterprise productivity product, but while I agree they have PMF right now, I wonder whether people's use will evolve in ways that undercut the current PMF. Chatting with an assistant is great if there's no product with tailored UI available that also has the AI capabilities. But once there is, I suspect people may switch, or more importantly enterprises may switch beca…

MCP-Apps could be the solution for tailored UI.

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

#898

Post by lunar_mycroft »

aspenmartin wrote: post #648
lunar_mycroft wrote: post #574

Earlier quoted context omitted.

> For coding you always want to go with the best model in the category This is transparently false, because the best "model" is still competent human developers. They're just more expensive. If you're willing to use current LLMs at all, it means you're willing to sacrifice quality for a better price, and your disagreement with the comment you were replying to is entirely about what the optimum tradeoff is.

Well it may be false that you always want the best model, but the point is performance of you+ is far more cost effective than you+someone else

Maybe, but that's a different claim than the one I was responding to. And also raises the question of "if the lower quality but cheaper output of frontier models is more cost effective than humans, is the even lower quality but even cheaper output of OSS models is more cost effective still?" With an absolute rule like GP suggested ("no, you always want the best code generator") the answer is clear, but it get much murkier if you reject such rules (as you have to to be an LLM coding proponent)

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

#899

Post by bluGill »

lmm wrote: post #675
alexpotato wrote: post #377

Earlier quoted context omitted.

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…

> it turned out that people claimed they were going to watch films 10-12 hours a day, every day of the week. Impossible. And what happened? How many hours per day/week are people spending watching now?

What people: I'm sure some people are watching 10-12 hours per day - in places like nursing homes or hospitals. I know a reasonable number of people who watch a film nearly every day: 2-3 hours. Most people watch something every few days - often a tuesday night movie night for the family (or something like that). There are some who never watch anything. I don't know what the statistics are on this.

My friends in day care tell me the kids hate "movie day" because movies are all the get at home and they are sick of them - they want to play all day. (but I'm not sure if this is representative of anything other than the types of people who put their kids in that particular daycare)

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

#900

Post by rhubarbtree »

PMF is such a bullshit term. There’s no precise definition. It’s bs.

The fact is that investment is at a scale so large that current trajectories are nowhere near going to provide ROI.

The model companies are trying to milk every drop of ARR they can before IPOing. That is entirely the current narrative. You can hurt ARR before it churns if your goals are short term.

Anthropic being profitable is laughable. Sure, by some accounting measure that no one seriously uses. But looking at revenue and what they’re raising you can see the true story.

The truth is we need a revolutionary step up in capability to justify capex spend. It’s possible that might come - Opus 4.5 brought one - but failing that we’ll see the bubble pop once the IPO pumping is done.

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