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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

#981

Post by anthonyrstevens »

hansmayer wrote: post #392
supern0va wrote: post #328

Earlier quoted context omitted.

I must admit that I am going to find it fascinating when we hit the point where it becomes nearly impossible to deny the efficacy of these tools. I have straight up had people, even in real life, suggest that I'm lying about my productivity gains or what I'm able to accomplish with them. Like, I understand the reasonable arguments against (I even agree with a few), but it's clear that some people have fully inserted…

In the meanwhile, Google AI search still says the next year after 2026 will be 2028.

No it doesn't, at least not for me.

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

#982

Post by regularfry »

jimbokun wrote: post #537
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…

That’s very unimpressive return on investment compared to what was promised.

I have nothing riding on any specific multiple. Choose your own adventure there.

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

#983

Post by roncesvalles »

m1coti wrote: post #301
roncesvalles wrote: post #226

Earlier quoted context omitted.

Outsourcing of knowledge workers didn't work out because at large enough scales, the geographic arbitrage disappeared. Companies mostly always got what they paid for. The determinant of success was only whether the task needed American-tier labor or could make do with sub-American quality labor.

I am not sure this feels right. I agree that the US currently has leading minds in terms of tech, but I am not sure it is too big of difference with the EU knowledge workers. EU is still a lot cheaper then US in terms of wages you would need to pay.

EU doesn't have the scale. There are probably more SWEs in one little town in the Bay Area than entire European countries.

Also, many European devs simply move to the US. Immigration is the primary means by which the arbitrage disappears.

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

#984

Post by Wowfunhappy »

Wowfunhappy wrote: post #548
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…

...does anyone have a guess as to the total amount of money spent on software developer salaries each year? What percentage of that would the AI companies need to capture to be profitable? (I'm not trying to imply that LLMs can replace software engineers, it's just an interesting comparison. If nothing else, I suspect that if the cost of development goes down, demand for custom software will go up.)

^ For what it's worth, Claude estimates $1.3–1.5 trillion.

https://claude.ai/share/8a3de813-677e-4a75-9b7f-1785495c2569

Honestly doesn't seem great for the AI companies.

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

#985

Post by galaxyLogic »

somewhereoutth wrote: post #909
galaxyLogic wrote: post #606

Earlier quoted context omitted.

> frontier models getting more and more out of date Why are they getting out of date? Is it because we have new content from the internet that the older models did not have? Or are we simply trying to increase the size of the training data? In other words not more up-todate in terms of time the content was created vs. wanting to use bigger training-input-sets?

lack of new content from the internet will make them go out of date. Not just facts and figures, but (for example) new programming languages/techniques.

I see makes sense. Then it it kinda says that quality of the model is the topicality of its inputs I assume.

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

#986

Post by soonnow »

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.

I see even smaller companies ask for that. Less about cost, European companies have a deep mistrust of US companies at the moment. I see companies a tenth of your companies size ask about local models.

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

#987

Post by worldsavior »

infecto wrote: post #921
mold_aid wrote: post #875

Earlier quoted context omitted.

I don't know, "workaday professionals will find $200/month a particularly good deal, such that there will be widespread adoption" sounds either credulous enough to support the diagnosis or dishonest enough to dismiss. I am a "knowledge worker" who is doin' fine, has a lot of templated written work/report writing, and there is no way in hell I am justifying that kind of spending to my boss or my family.

I think is the classic dilemma where people don’t know how to value their time. Typical tech worker costs a company around $100/hour minimum. That $200 subscription cost can look mighty attractive if it saves some time or mental load. I don’t think there is anything about addiction or spooky with that math. I suspect a lot of this is coming from tokenmaxxing firms but on the flip side on our small team, we end up spe…

You're blowing hot air. Take it elsewhere.

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

#988

Post by nephihaha »

bluGill wrote: post #899
lmm wrote: post #675

Earlier quoted context omitted.

> 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…

I've encountered plenty of people who have the TV on all the time when they are at home (and awake). That's from when they get back from work right up til when they go to sleep. So that could easily be five hours. TikTok and YouTube have eaten into that but are much the same thing.

Binge watching is common as is sports.

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

#989

Post by extraextra »

neltnerb wrote: post #521
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 companies that want to go public need to look profitable or potentially profitable. And before they go public they have to release real, actual, legally demonstrable numbers for their costs and revenue anyway.

When they will actually file to go public, their numbers will be intensely scrutinized. That's all that global headlines will be talking about for weeks on end. Why would they create forward expectations before it's necessary?

Of course they don't want to create forward expectations in a volatile macro environment, with the public listing being 6 months out.

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

#990

Post by bob1029 »

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?

I eat the cost right now.

The fee schedule is simple: Every work item is assigned a difficulty level by the business + in-house dev team. That is multiplied by a base fee and that establishes the bounty for the item. I get paid this amount the moment the work item flows into production and is approved by customer.

There are no limits. If they were to hand me 120 days worth of work and I finish it in one week, I would get paid exactly the same. I don't have to be clandestine about this either. The contract clearly describes this arrangement, so there are some cases where it's like "wow I can't believe we're gonna pay $10000 for that amount of labor", but we all know that isn't the point. They know they got exactly what they bargained for. It's just ahead of schedule, which provides even more intrinsic value to the business.

In this arrangement, if I were to bill the client for my token usage, a small conflict in interest could arise. It's not a big deal, but most things start out that way.

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