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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

#971

Post by overgard »

supern0va wrote: post #677
overgard wrote: post #485

Earlier quoted context omitted.

Ed actually provides sources and goes into an incredible amount of detail as to how he came to his conclusions. The average AI booster just goes "I totally built ten businesses off vibe coding but I can't tell you anything because it's a SECRET!". And the mainstream tech media is so in the pocket of big tech and AI corporations that they might as well just publish their PR emails at this point. Yeah, I'll listen to E…

Ed actually seems to make some really serious errors in his work. Tim Lee called out a particularly egregious one here, though it's one of many: https://x.com/binarybits/status/2050562429709377986 That said, I really mean it when I say that I don't actually think Ed is a good choice for the anti-AI movement. I think an actual opposition is useful, but he ain't it. I really recommend you read the Wired profile if you…

It's an interesting profile, but I don't see why it would change my opinion of him. I already knew he works in PR, it's not like a thing he hides. I don't think one error in a spreadsheet really proves anything (plus he's pretty honest about being an amateur at financial analysis -- but most of what he's looking at is pretty basic math and it's baffling that nobody has an answer to his pretty straightforward questions of how-will-this-ever-make-money)

I guess like, I don't know about an anti-ai "movement", personally I like AI-the-product but I think AI-the-industry is extremely sketchy and has motivations that I think are awful. As with all technology revolutions, my issue is more with the people than the technology itself.

I don't really like how this whole thing has become "pro ai" vs "anti ai" though. For me, I'm just really irritated when I use AI every day, I'm a professional software developer, and all my experiences with it do not match the (very annoying) hype. I kind of wish we could just go back to talking about software engineering and if people like vibe coding, great, go do that and stop all the annoying think pieces that just give CEO's even worse AI psychosis.

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

#972

Post by mv4 »

datadrivenangel wrote: post #386
mv4 wrote: post #347

Earlier quoted context omitted.

I configured a dual DGX Spark cluster, and it's certainly "good enough" for my agentic and coding needs.

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.

Minimax M2.7.

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

#973

Post by an0malous »

londons_explore wrote: post #966
an0malous wrote: post #688

Earlier quoted context omitted.

> If open source models are ~3-6 months behind SOTA, and ~opus4.6 capabilities are good-enough for product market fit, do the frontier labs have half a decade to catch up on their prior burn? They know they do not and that’s why they’re all trying to IPO right now, so they can pass the bag to consumer investors

The printing press was good enough for product market fit back in the 1700's. But now it isn't. Last year's AI models will be the same. Do you want to spend 3 hours prompting free AI to fix your code or 1 hour prompting AI you paid $20 for?

That's only if these AI companies can keep improving their model performance faster than open source options can keep up. I don't think performance will keep scaling with more training data, and even if it does they've likely already used the entire history of content created by humans for training. Everything points towards diminishing returns in an increasingly crowded space of competitors, there's no other reason for these companies to be rushing to an IPO if they felt secure in their market positioning.

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

#974

Post by tabs_or_spaces »

Product market fit and profitability are two different things.

Arguably product market fit was fond last November already. I don't think agents were the turning point that caused this.

Profitability, not yet. For me, it depends on whether companies are seeing a positive ROI from their ai investments. This website is skewed more towards big tech companies, but everyone that's not big tech needs to see positive ROI with using ai tools. Short term might see a profit, but medium to long term we still need to wait a bit.

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

#975

Post by TheSoftwareGuy »

QGQBGdeZREunxLe wrote: post #936
bob1029 wrote: post #925

Earlier quoted context omitted.

I think we could eventually get to a point where $1000/m+ consumption would be considered a bargain. I currently pay ~$150/m in tokens to cover my 1099 work. If I had to pay $1000 for those same tokens each month, I would still be massively positive on my margins. I bill customers based upon # of completed features & bugs, not total time spent at the computer. Tokens would have to more than 10x in cost before I would…

How are you billing clients when using AI? Do you pass on costs or do you multiply time saved by your hourly rate and bill that?

Sounds like he pays for AI himself. He said he bills by the feature/bug. So he keeps all the productivity gains from using AI

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

#976

Post by aspenmartin »

Oras wrote: post #844
aspenmartin wrote: post #236

Earlier quoted context omitted.

What I also find confusing though is that folks seem to ignore trajectory which is maybe the biggest lede to bury. As Simon says, we have had "good enough" coding agents for 6 months, that is a blink of an eye, and at my company my job has now completely changed. It's almost like a dream. And that's just one inflection point. We've had several and there are many more on the horizon. So while I could be convinced that…

yeah but if you have to pay $2k to $3k per month, would you still use it?

me, personally, today? no. My company? Yes.

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

#977

Post by nebben64 »

kkarpkkarp wrote: post #963
mock-possum wrote: post #789

Earlier quoted context omitted.

How many sessions are you running simultaneously, how careful are you being about token consumption and context window management, and what level of reasoning are you using (with which models?) 8hrs a day doesn’t really mean anything without a lot additional qualifiers. fwiw lately I’ve been straddling 2 or 3 claude codes and one Claude cowork, primarily on 4.7 with high effort - the company’s paying for it, so I’m d…

at most I run 2-3, but usually one. About token consumption and models: that's the thing. I hear this question often, but my answer is always the same. As I am Cursor user, I run it always in Auto mode (so Cursor decides which model to use, I don't even know which is in use). Sometimes I switch from Auto to defined model but I found it quickly triggers "you are out of tokens" notices so nope: I stick to Auto :) 20 us…

> "you are out of tokens" notices

there's your answer. You're likely a heavy user. It's just that in this particular case Auto is shuffling models & reasoning efforts just right so you stay afloat.

There are a lot caveats when people say they're running out credits in hours: lots of people runnings clawS (multiple) 24/7; lots of people using Agent Teams or similar; lots of people just max reasoning for everything; etc.

If you get your work done in the 20 plan, thank the credit Gods and sleep easy. Price hikes are probably coming, or just reasons to draw more credits out from you in one form or another (e.g. new OAI device draws from you 20 sub to use)

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

#978

Post by nektro »

anthropic rumored to be having a profitable quarter is a ruse to ready them up for IPO or otherwise. they could've had a profitable quarter at any point in their history but they only do so if they stop making models; this has been established. they make a model, they sell inference and make a ton of money, they train the next model at 10x the cost, they sell inference and make a ton of money, they train the next model at 10x the cost, repeat

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

#979

Post by FuriouslyAdrift »

disiplus wrote: post #442
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.

same, but you need more then 100k of hw to run something like kimi k2.6 for a bigger team. on the other hand there is a ds4 flash that you can run on a macbook with 128gb ram. an that one is perfectly usable for a lot of tasks. https://github.com/antirez/ds4

I think the quote came out to $107k. 4 AMD MI300A's. Around 60k tokens per second, 512GB of GPU memory.

https://www.gigabyte.com/Enterprise/GPU-Server/G383-R80-AAP1

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

#980

Post by m463 »

Tuna-Fish wrote: post #248
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…

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…

I wonder if inference costs will go down...

or will it be like microsoft office, where the software bloats to use/fill current hardware?

(and in this case bloats might mean better thinking or pulling in more data)

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