I used to agree with you but now do not. I now think the floor for this market is probably no worse than the annual revenue of cell phone plans in the US market. So say, $250 billion.

Now, that probably doesn't justify the valuations and hype being thrown around, but I think it gets at a real revenue number.

I also don't know how that number fits into the funding rounds already raised and VC dreams of IPOs for these two.

This isn't coming from deep analysis on a verifiable source, but I started asking people in my social circle (includes white-collar and blue-collar folks) about their LLM use. The biggest surprise in 2026 for me was that almost all of these people told me about regular (and sometimes sophisticated) use.

A more intriguing observation - I work on the side with high school students and have two college kids of my own. Their LLM usage (and their peers) is much, much lower than expected . . . that's a little counterintuitive given "popular" perceptions I read.

> I used to agree with you but now do not. I now think the floor for this market is probably no worse than the annual revenue of cell phone plans in the US market. So say, $250 billion.

I don't think we're talking about the same thing. I'm talking about what their IPO is going to do to their share price.

In any case, $250b revenue translates to, best case scenario, $50b profit. On an investment of $1t. It does not look good for those companies making up the $1t investment.

Gotcha. I'm past the point of having any confident thoughts about what happens to their share price at IPO.

What about the idea that there is a high likelihood that the potential share price for OpenAI and Anthropic are both going to be pretty divorced from a rational market price for either?

Interesting idea and reasonable number, but cell phones need a lot of infrastructure and they need interconnection. The risk here is that in the future a combination of near-sota open weights models optimised to use as little resources as possible and a reasonable drop in compute price, will make possible for small and tiny providers to compete with Anthropic/ OpenAI or even for people to run their own private models for most applications. Then large, expensive sota models would only be used for research and to answer the small subset of general user queries that need that kind of intelligence.

The open models are half the equation. The other half is Apple's hardware, which is likely to see major memory bandwidth improvements over the next 2-3 generations and will be capable of running substantial models locally. By that point the open models will be beyond today's SOTA.

> a TAM that consists almost solely of developers

That’s the wrong assumption. These models are good at office docs too.

> That’s the wrong assumption. These models are good at office docs too.

The cheap models handle that very well. The SOTA models still only have target TAM of developers only.

You only need SOTA for development. The $1t investment is in SOTA companies.

I have yet to see a model that can make a consistent and repeatable powerpoint deck that doesn’t need considerable manual revision

Find me someone who is putting raw text in and getting out a usable weekly staff meeting deck that doesn’t require massive revisions

It’s hard not to be cynical as a dev. Every time I see a non-dev messing around with tooling I feel pain and discomfort.

You can bet your ass I can make AI make a consistent and repeatable powerpoint deck.

Problem is a) the need to produce this “deck” is questionable, at best and b) thinking in “powerpoint” is severely lobotomizing and limits you and your company in ways I find hard to even enumerate.

The exact same bullshit is going on with “word”. People can’t separate content from form apparently and that’s a debilitating disability no AI can fix. Creating AI to help you with “word” documents is an infinitude of stupidity so dark and so deep it makes my eyes water and fear for the future of humanity.

All I can say is imagine you do NOT have “powerpoint”. Let’s say all you have is a whiteboard with a 10% pen so you have to keep it short. What do you intend to communicate? Drill down and stop thinking in “powerpoint” and start thinking in content.

Content and form are orthogonal, repeat after me.

Once you have a stable and consistent information schema you can create “decks” till the cows come home and they’ll all be great. You won’t even need special AI for it in all likelihood. If you do not have a firm handle on the payload itself you’ll be forever tangling with “fonts” and “charts” getting none the wiser.

Oh man ya’ll are going to hate me so much so I’ll just spew further so I can get along with my day.

Imagine REST APIs being built around button designs, serialized CSS in business objects, in short imagine completely mishandling information and tanging it up with vague social indicators like “looks like he did work” and “this looks like an executive would be impressed”. Businesses are peddling proxies instead of raw information and for the love of God I can’t figure out why. AI or no AI this is a self-inflicted mutilation of such epic proportions I find it hard to imagine AI even budging the needle in such a low-density low-value environment.

Bro what?

I agree but why is that?

Let’s face it - without the humans these machines ain’t shit - aka we have mechanically figured out ways to make machines better than us at certain things (on demand memory) but this idea they are intelligent is horse shit.

Btw the bar is low too! Most human created decks are garbage. And yet LLM’s don’t even beat those.

Unfortunately matters of taste like design aren’t as easy to specify

I doubt they’ll ever be.

Machines have nothing to do with what speaks to the human - at best they are media to transmit what a human wants to express.

Having all the data in the world doesn’t solve that. Although if enough of society gets exposed to slop and there is an erosion of taste and quality… in fact I’m gonna stop there. It’s a dark path.

But you can do office docs work with way cheaper models

They're passable at those. And still no moat.

I agree with everything you said about their situation, but it's not like that is what will be evaluated in an IPO. There will be continued hype by the companies, lobbying to win support of a corrupt administration, and a narrative spin by clueless media about this AI revolution that will give investors fomo.

>I fear their time to IPO may have passed.

They may not get the valuation they want, but as it appears to be on a plateau may be better to offload now?

As per SpaceX, so many big names are involved the media will be controlled to hype it up and the investment banks will forecast 100x revenue in 2 years...

Propaganda? Pay for “facts” to be placed in the model?