4 ms·

Coding assistants won't win this game. They sure will win the hearts of developers, but to scale you need mass adoption and products for which users want to pay

by oezi 6mo ago

Coding assistants won't win this game. They sure will win the hearts of developers, but to scale you need mass adoption and products for which users want to pay substantially. OpenAI is falling behind in the small features in their chat and app offering and have failed to innovate in their expensive offerings. Codex btw is getting very competitive. It is fast and no longer far behind.

igtt 6mo ago
The reality is given how much OAI has raised, they have to get to a place where they are doing insane revenues… We’re talking on the level of meta, google and probably more if they keep raising money. They really went all in with hubris and they’re gonna get punished eventually.
- fragmede 6mo ago
  Just like Uber did?
  - rchaud 6mo ago
    Uber doesn't have to convert hundreds of millions of users to a paid plan - it was paid to begin with. Much easier to raise prices from a low base than to raise them from $0. When push came to shove, Uber also cut payments to drivers and replaced them with a tip screen. Is Nvidia going to accept tip annuities on ChatGPT responses instead of full payment on its chips? Most importantly, Uber did not have fast-depreciating cars on its balance sheet - OAI meanwhile is planning to spend the GDP of a mid-size nation on owning fast-depreciating datacenters, which they deem necessary to cope with the demand for their services.
nayroclade 6mo ago
The strategic playbook of the web era said: Get a huge userbase of normies, then figure out how to monetise them (usually via advertising). OpenAI stumbled into the userbase via ChatGPT, but it's unclear if the strategy or the economics apply to AI. Anthropic tried to compete in the consumer market, but couldn't, so focussed on coding and enterprise, and it looks like that's actually turning into a smart choice, at least right now, because it turns out people will pay subscription costs for agents that do their job for them.
- phist_mcgee 6mo ago
  But will they pay the unsubsidized cost when anthropic needs to turn a profit?
  - igtt 6mo ago
    And they actually can’t increase the price much. Token generation is the metric Jensen Huang keeps pushing to temper analysts, which also affect nvidia’s future expected cash flows of course. If increasing the price causes that metric to drop, the whole narrative falls apart and fear will spread in the stock market. They’re all racing very close to the edge. Some closer than others.
- chromacity 6mo ago
  There are three possible paths that sort of substantiate current valuations: 1) Business: LLMs become essential to every company, and you become rich by selling the best enterprise tools to everyone. 2) Consumer: LLMs cannibalize search and a good chunk of the internet, so people end up interacting with your AI assistant instead of opening any websites. You start serving ads and take Google's lunch. 3) Superhuman AGI: you beat everyone else to the punch to build a life form superior to humans, this doesn't end up in a disaster, and you then steal underpants, ???, profit. Anthropic is clearly betting on #1. Google decided to beat everyone else to #2, and they can probably do it better and more cheaply than others because of their existing infra and the way they're plugged into people's digital lives. And OpenAI... I guess banked on #3 and this is perhaps looking less certain now?
7e 6mo ago
Agents increase the velocity of OpenAI and Anthropic; whomever has the best in-house agent moves the quickest.
- maxnevermind 6mo ago
  Any publicly available evidence to back that up? There have been post-exit blog posts from OpenAI employees on HN before and it did sound like the only black magic they use there is that many employees work 16 hrs a day during launch of new features. I know that some current Claude Code devs are doing interviews where they claim that they use Claude Code extensively but they clearly have a conflict of interest while they are still employed at Anthropic, so it would be like asking a barber if you need a haircut.
  - sumedh 6mo ago
    Look at the number of features (PRs) being pushed by these companies.

by oezi 6mo ago

igtt 6mo ago

The reality is given how much OAI has raised, they have to get to a place where they are doing insane revenues… We’re talking on the level of meta, google and probably more if they keep raising money. They really went all in with hubris and they’re gonna get punished eventually.

fragmede 6mo ago
Just like Uber did?
- rchaud 6mo ago
  Uber doesn't have to convert hundreds of millions of users to a paid plan - it was paid to begin with. Much easier to raise prices from a low base than to raise them from $0. When push came to shove, Uber also cut payments to drivers and replaced them with a tip screen. Is Nvidia going to accept tip annuities on ChatGPT responses instead of full payment on its chips? Most importantly, Uber did not have fast-depreciating cars on its balance sheet - OAI meanwhile is planning to spend the GDP of a mid-size nation on owning fast-depreciating datacenters, which they deem necessary to cope with the demand for their services.

nayroclade 6mo ago

The strategic playbook of the web era said: Get a huge userbase of normies, then figure out how to monetise them (usually via advertising). OpenAI stumbled into the userbase via ChatGPT, but it's unclear if the strategy or the economics apply to AI. Anthropic tried to compete in the consumer market, but couldn't, so focussed on coding and enterprise, and it looks like that's actually turning into a smart choice, at least right now, because it turns out people will pay subscription costs for agents that do their job for them.

phist_mcgee 6mo ago
But will they pay the unsubsidized cost when anthropic needs to turn a profit?
- igtt 6mo ago
  And they actually can’t increase the price much. Token generation is the metric Jensen Huang keeps pushing to temper analysts, which also affect nvidia’s future expected cash flows of course. If increasing the price causes that metric to drop, the whole narrative falls apart and fear will spread in the stock market. They’re all racing very close to the edge. Some closer than others.
chromacity 6mo ago
There are three possible paths that sort of substantiate current valuations: 1) Business: LLMs become essential to every company, and you become rich by selling the best enterprise tools to everyone. 2) Consumer: LLMs cannibalize search and a good chunk of the internet, so people end up interacting with your AI assistant instead of opening any websites. You start serving ads and take Google's lunch. 3) Superhuman AGI: you beat everyone else to the punch to build a life form superior to humans, this doesn't end up in a disaster, and you then steal underpants, ???, profit. Anthropic is clearly betting on #1. Google decided to beat everyone else to #2, and they can probably do it better and more cheaply than others because of their existing infra and the way they're plugged into people's digital lives. And OpenAI... I guess banked on #3 and this is perhaps looking less certain now?

7e 6mo ago

Agents increase the velocity of OpenAI and Anthropic; whomever has the best in-house agent moves the quickest.

maxnevermind 6mo ago
Any publicly available evidence to back that up? There have been post-exit blog posts from OpenAI employees on HN before and it did sound like the only black magic they use there is that many employees work 16 hrs a day during launch of new features. I know that some current Claude Code devs are doing interviews where they claim that they use Claude Code extensively but they clearly have a conflict of interest while they are still employed at Anthropic, so it would be like asking a barber if you need a haircut.
- sumedh 6mo ago
  Look at the number of features (PRs) being pushed by these companies.