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Are you saying they'd be profitable if they didn't pour all the winnings into research? From where I'm standing, the models are useful as is. If Claude stopped

Are you saying they'd be profitable if they didn't pour all the winnings into research? From where I'm standing, the models are useful as is. If Claude stopped improving today, I would still find use for it. Well worth 4 figures a year IMO.

dvfjsdhgfv 1y ago
For me, if Anthropic stopped now, and given access to all alternative models, they still would be worth exactly $240 which is the amount I'm paying now. I guess Anthropic and OpenAI can see the real demand by clearly seeing what are their free:basic:expensive plan ratios.
- danielbln 1y ago
  You may want to pay for Claude Max outside of the Google or iOS ecosystem and save $40/month.
apwell23 1y ago
> Well worth 4 figures a year IMO only because software engineering pay hasn't adjusted down for the new reality . You don't know what its worth yet.
- fkyoureadthedoc 1y ago
  Can you explain this in more detail? The idiot bottom rate contractors that come through my team on the regular have not been helped at all by LLMs. The competent people do get a productivity boost though. The only way I see compensation "adjusting" because of LLMs would need them to become significantly more competent and autonomous.
  - lelanthran 1y ago
    > Can you explain this in more detail? Not sure what GP meant specifically, but to me, if $200/m gets you a decent programmer, then $200/m is the new going rate for a programmer. Sure, now it's all fun and games as the market hasn't adjusted yet, but if it really is true that for $200/m you can 10x your revenue, it's still only going to be true until the market adjusts! > The competent people do get a productivity boost though. And they are not likely to remain competent if they are all doing 80% review, 15% prompting and 5% coding. If they keep the ratios at, for example, 25% review, 5% prompting and the rest coding, then sure, they'll remain productive. OTOH, the pipeline for juniors now seems to be irrevocably broken: the only way forward is to improve the LLM coding capabilities to the point that, when the current crop of knowledgeable people have retired, programmers are not required. Otherwise, when the current crop of coders who have the experience retires, there'll be no experience in the pipeline to take their place. If the new norm is "$200/m gets you a programmer", then that is exactly the labour rate for programming: $200/m. These were previously (at least) $5k/m jobs. They are now $200/m jobs.
    - fkyoureadthedoc 1y ago
      $200 does not get you a decent programmer though. It needs constant prompting, babysitting, feedback, iteration. It's just a tool. It massively boosts productivity in many cases, yes. But it doesn't do your job for you. And I'm very bullish on LLM assisted coding when compared to most of HN. High level languages also massively boosted productivity, but we didn't see salaries collapse from that. > And they are not likely to remain competent if they are all doing 80% review, 15% prompting and 5% coding. I've been doing 80% review and design for years, it's called not being a mid or junior level developer. > OTOH, the pipeline for juniors now seems to be irrevocably broken I constantly get junior developers handed to me from "strategic partners", they are just disguised as senior developers. I'm telling you brother, the LLMs aren't helping these guys do the job. I've let go 3 of them in July alone.
      - handfuloflight 1y ago
        > It needs constant prompting, babysitting, feedback, iteration. What do you think a product manager is doing?
        fkyoureadthedoc 1y ago
        Not writing and committing code with GitHub Copilot, I'll tell you that. These things need to come a _long_ way before that's a reality.
      - lelanthran 1y ago
        > It needs constant prompting, babysitting, feedback, iteration. It's just a tool. It massively boosts productivity in many cases, yes. It doesn't sound like you are disagreeing with me: that role you described is one of manager, not of programmer. > High level languages also massively boosted productivity, but we didn't see salaries collapse from that. Those high level languages still needed actual programmers. If the LLM is able to 10x the output of a single programmer because that programmer is spending all their time managing, you don't really need a programmer anymore, do you? > I've been doing 80% review and design for years, it's called not being a mid or junior level developer. Maybe it differs from place to place. I was a senior and a staff engineer, at various places including a FAANG. My observations were that even staff engineer level was still spending around 2 - 3 hours a day writing code. If you're 10x'ing your productivity, you almost certainly aren't spending 2 - 3 hours a day writing code. > I constantly get junior developers handed to me from "strategic partners", they are just disguised as senior developers. I'm telling you brother, the LLMs aren't helping these guys do the job. I've let go 3 of them in July alone. This is a bit of a non-sequitor; what does that have to do with breaking the pipeline for actual juniors? Without juniors, we don't get seniors. Without seniors and above, who will double-check the output of the LLM?[1] If no one is hiring juniors anymore, then the pipeline is broken. And since the market price of a programmer is going to be set at $200/m, where will you find new entrants for this market? Hell, even mid-level programmers will exit, because when a 10-programmer team can be replaced by a 1-person manager and a $200/m coding agent, those 9 people aren't quietly going to starve while the industry needs them again. They're going to go off and find something else to do, and their skills will atrophy (just like the 1-person LLM manager skills will atrophy eventually as well). ---------------------------- [1] Recall that my first post in this thread was to say that the LLM coding agents have to get so good that programmers aren't needed anymore because we won't have programmers anymore. If they aren't that good when the current crop starts retiring then we're in for some trouble, aren't we?
  - cgh 1y ago
    There's another specific class of person that seems helped by them: the paralysis by analysis programmer. I work with someone really smart who simply cannot get started when given ordinary coding tasks. She researches, reads and understands the problem inside and out but cannot start actually writing code. LLMs have pushed her past this paralysis problem and given her the inertia to continue. On the other end, I know a guy who writes deeply proprietary embedded code that lives in EV battery controllers and he's found LLMs useless.
- johnnyanmac 1y ago
  I mean, it adjusted down by having some hundreds of thousands of engineers laid off in he last 2+ years. they know slashing salaries is legal suicide, so they just make the existing workers work 3x as hard.
jsnell 1y ago
They'd be profitable if they showed ads to their free tier users. They wouldn't even need to be particularly competent at targeting or aggressive with the amount of ads they show, they'd be profitable with 1/10th the ARPU of Meta or Google. And they would not be incompetent at targeting. If they were to use the chat history for targeting, they might have the most valuable ad targeting data sets ever built.
- bugbuddy 1y ago
  I heard majority of the users are techies asking coding questions. What do you sell to someone asking how to fix a nested for loop in C++? I am genuinely curious. Programmers are known to be the stingiest consumers out there.
  - LtWorf 1y ago
    According to fb's aggressively targeted marketing, you sell them donald trump propaganda.
    - disgruntledphd2 1y ago
      It's very important to note that advertisers set the parameters in which FB/Google's algorithms and systems operate. If you're 25-55 in a red state, it seems likely that you'll see a bunch of that information (even if FB are well aware you won't click).
      - LtWorf 1y ago
        I'm not even in USA and I've never been in USA in my entire life.
        disgruntledphd2 1y ago
        Wow, that's either a bug or an incredibly incompetent advertiser.
vikramkr 1y ago
That's calculating value against not having LLMs and current competitors. If they stopped improving but their competitors didn't, then the question would be the incremental cost of Claude (financial, adjusted for switching costs, etc) against the incremental advantage against the next best competitor that did continue improving. Lock in is going to be hard to accomplish around a product that has success defined by its generalizability and adaptability. Basically, they can stop investing in research either when 1) the tech matures and everyone is out of ideas or 2) they have monopoly power from either market power or oracle style enterprise lock in or something. Otherwise they'll fall behind and you won't have any reason to pay for it anymore. Fun thing about "perfect" competition is that everyone competes their profits to zero
miki123211 1y ago
But if Claude stopped pouring their money into research and others didn't, Claude wouldn't be useful a year from now, as you could get a better model for the same price. This is why AI companies must lose money short term. The moment improvements plateau or the economic environment changes, everyone will cut back on research.

dvfjsdhgfv 1y ago

For me, if Anthropic stopped now, and given access to all alternative models, they still would be worth exactly $240 which is the amount I'm paying now. I guess Anthropic and OpenAI can see the real demand by clearly seeing what are their free:basic:expensive plan ratios.

danielbln 1y ago
You may want to pay for Claude Max outside of the Google or iOS ecosystem and save $40/month.

apwell23 1y ago

> Well worth 4 figures a year IMO only because software engineering pay hasn't adjusted down for the new reality . You don't know what its worth yet.

fkyoureadthedoc 1y ago
Can you explain this in more detail? The idiot bottom rate contractors that come through my team on the regular have not been helped at all by LLMs. The competent people do get a productivity boost though. The only way I see compensation "adjusting" because of LLMs would need them to become significantly more competent and autonomous.
- lelanthran 1y ago
  > Can you explain this in more detail? Not sure what GP meant specifically, but to me, if $200/m gets you a decent programmer, then $200/m is the new going rate for a programmer. Sure, now it's all fun and games as the market hasn't adjusted yet, but if it really is true that for $200/m you can 10x your revenue, it's still only going to be true until the market adjusts! > The competent people do get a productivity boost though. And they are not likely to remain competent if they are all doing 80% review, 15% prompting and 5% coding. If they keep the ratios at, for example, 25% review, 5% prompting and the rest coding, then sure, they'll remain productive. OTOH, the pipeline for juniors now seems to be irrevocably broken: the only way forward is to improve the LLM coding capabilities to the point that, when the current crop of knowledgeable people have retired, programmers are not required. Otherwise, when the current crop of coders who have the experience retires, there'll be no experience in the pipeline to take their place. If the new norm is "$200/m gets you a programmer", then that is exactly the labour rate for programming: $200/m. These were previously (at least) $5k/m jobs. They are now $200/m jobs.
  - fkyoureadthedoc 1y ago
    $200 does not get you a decent programmer though. It needs constant prompting, babysitting, feedback, iteration. It's just a tool. It massively boosts productivity in many cases, yes. But it doesn't do your job for you. And I'm very bullish on LLM assisted coding when compared to most of HN. High level languages also massively boosted productivity, but we didn't see salaries collapse from that. > And they are not likely to remain competent if they are all doing 80% review, 15% prompting and 5% coding. I've been doing 80% review and design for years, it's called not being a mid or junior level developer. > OTOH, the pipeline for juniors now seems to be irrevocably broken I constantly get junior developers handed to me from "strategic partners", they are just disguised as senior developers. I'm telling you brother, the LLMs aren't helping these guys do the job. I've let go 3 of them in July alone.
    - handfuloflight 1y ago
      > It needs constant prompting, babysitting, feedback, iteration. What do you think a product manager is doing?
      - fkyoureadthedoc 1y ago
        Not writing and committing code with GitHub Copilot, I'll tell you that. These things need to come a _long_ way before that's a reality.
    - lelanthran 1y ago
      > It needs constant prompting, babysitting, feedback, iteration. It's just a tool. It massively boosts productivity in many cases, yes. It doesn't sound like you are disagreeing with me: that role you described is one of manager, not of programmer. > High level languages also massively boosted productivity, but we didn't see salaries collapse from that. Those high level languages still needed actual programmers. If the LLM is able to 10x the output of a single programmer because that programmer is spending all their time managing, you don't really need a programmer anymore, do you? > I've been doing 80% review and design for years, it's called not being a mid or junior level developer. Maybe it differs from place to place. I was a senior and a staff engineer, at various places including a FAANG. My observations were that even staff engineer level was still spending around 2 - 3 hours a day writing code. If you're 10x'ing your productivity, you almost certainly aren't spending 2 - 3 hours a day writing code. > I constantly get junior developers handed to me from "strategic partners", they are just disguised as senior developers. I'm telling you brother, the LLMs aren't helping these guys do the job. I've let go 3 of them in July alone. This is a bit of a non-sequitor; what does that have to do with breaking the pipeline for actual juniors? Without juniors, we don't get seniors. Without seniors and above, who will double-check the output of the LLM?[1] If no one is hiring juniors anymore, then the pipeline is broken. And since the market price of a programmer is going to be set at $200/m, where will you find new entrants for this market? Hell, even mid-level programmers will exit, because when a 10-programmer team can be replaced by a 1-person manager and a $200/m coding agent, those 9 people aren't quietly going to starve while the industry needs them again. They're going to go off and find something else to do, and their skills will atrophy (just like the 1-person LLM manager skills will atrophy eventually as well). ---------------------------- [1] Recall that my first post in this thread was to say that the LLM coding agents have to get so good that programmers aren't needed anymore because we won't have programmers anymore. If they aren't that good when the current crop starts retiring then we're in for some trouble, aren't we?
- cgh 1y ago
  There's another specific class of person that seems helped by them: the paralysis by analysis programmer. I work with someone really smart who simply cannot get started when given ordinary coding tasks. She researches, reads and understands the problem inside and out but cannot start actually writing code. LLMs have pushed her past this paralysis problem and given her the inertia to continue. On the other end, I know a guy who writes deeply proprietary embedded code that lives in EV battery controllers and he's found LLMs useless.
johnnyanmac 1y ago
I mean, it adjusted down by having some hundreds of thousands of engineers laid off in he last 2+ years. they know slashing salaries is legal suicide, so they just make the existing workers work 3x as hard.

jsnell 1y ago

They'd be profitable if they showed ads to their free tier users. They wouldn't even need to be particularly competent at targeting or aggressive with the amount of ads they show, they'd be profitable with 1/10th the ARPU of Meta or Google. And they would not be incompetent at targeting. If they were to use the chat history for targeting, they might have the most valuable ad targeting data sets ever built.

bugbuddy 1y ago
I heard majority of the users are techies asking coding questions. What do you sell to someone asking how to fix a nested for loop in C++? I am genuinely curious. Programmers are known to be the stingiest consumers out there.
- LtWorf 1y ago
  According to fb's aggressively targeted marketing, you sell them donald trump propaganda.
  - disgruntledphd2 1y ago
    It's very important to note that advertisers set the parameters in which FB/Google's algorithms and systems operate. If you're 25-55 in a red state, it seems likely that you'll see a bunch of that information (even if FB are well aware you won't click).
    - LtWorf 1y ago
      I'm not even in USA and I've never been in USA in my entire life.
      - disgruntledphd2 1y ago
        Wow, that's either a bug or an incredibly incompetent advertiser.

vikramkr 1y ago

That's calculating value against not having LLMs and current competitors. If they stopped improving but their competitors didn't, then the question would be the incremental cost of Claude (financial, adjusted for switching costs, etc) against the incremental advantage against the next best competitor that did continue improving. Lock in is going to be hard to accomplish around a product that has success defined by its generalizability and adaptability. Basically, they can stop investing in research either when 1) the tech matures and everyone is out of ideas or 2) they have monopoly power from either market power or oracle style enterprise lock in or something. Otherwise they'll fall behind and you won't have any reason to pay for it anymore. Fun thing about "perfect" competition is that everyone competes their profits to zero

miki123211 1y ago

But if Claude stopped pouring their money into research and others didn't, Claude wouldn't be useful a year from now, as you could get a better model for the same price. This is why AI companies must lose money short term. The moment improvements plateau or the economic environment changes, everyone will cut back on research.