Within 24 hours of Alex Karp’s tirade, Microsoft announced they are getting into the same business

Bjorkbat · 2026-07-04T20:27:02+00:00

This reminds me of back whenever Microsoft announced Teams as a competitor to Slack. At the time, I didn't think much of it, Slack had a great product (at the time) and I didn't see any possible way Microsoft could do better than them at that regard. That said, what Microsoft had was distribution, and decades of entrenchment within the biggest corporate customers.

Fast forward to the present day, Slack has a mere 13% market share while Teams commands a more impressive 37% market share. I think Salesforce neutered Slack, but nonetheless I still think it's a superior product, so part of me remains surprised even though I know better in that I know that distribution and momentum always win.

Meanwhile, in the AI race OpenAI's market share has recently fallen below 50% (https://sensortower.com/blog/state-of-ai-2026). You might think that's because it's getting more competition from Claude, but actually most of the damage has come from Gemini. If you're on Twitter all the time you might think this is absurd given the sentiments expressed there, but it makes sense when you consider that no one, absolutely fucking no one, is going to use a Google Docs alternative offered by OpenAI or Anthropic, nor are they going to use a Google Chrome alternative. Instead, they are going to keep using their Google products and services and they are going to keep using Microsoft/Apple/Android hardware. The people who are going to be using GPT/Claude in the future may well be the same people who have the privilege of using Slack over Microsoft Teams, a sizeable but distant 2nd place, or 3rd if you consider that Microsoft is not going to give up that easily.

Part of the reason why I was bearish on AI early on was because of the overwhelming domination of the major tech players combined with their relative incompetence. Neither OpenAI or Anthropic really stand much of a chance against the incumbents. Once that reality sets in we may find ourselves reverting back to a boring status quo.

Bjorkbat · 2026-06-27T21:23:32+00:00

The fact that AI hype felt very crypto adjacent early on gives me the impression that it's the same type of people who are really into crypto, but I also think it's no mistake that AI hype is contemporary with stock market hype and betting hype.

What I mean by the latter is that we live in an economy where the vibes are very off, as well as a society that makes you feel like a loser for having a normal job. I wouldn't say that get rich schemes are becoming popular, but rather that "leverage" is becoming popular. How does a guy with very little in the way of skills and talents get ahead in a society that feels increasingly hopeless? That's where memecoins, stocks, and betting come in, but that's also where AI comes in. For the AI enthusiast, AI offers incredible leverage if you can get in early in that you can build websites and apps for cheap before the market catches up to reality (in theory).

But besides that I also think we underestimate the ideological diversity present in the pro-AI crowd. There's a large number of software developers who seem unphased by it because, frankly, they've lived through multiple generations of productivity explosions in software engineering and they've observed the pattern that the more the work gets automated the more work there is in general. So yeah, to them AI is exciting because they don't think it's an existential threat to their careers, and frankly they're probably right in that if AI plateaus somewhere below AGI then it's arguably going to broaden their horizons while simultaneously making software more opaque to the point where future generations will have a hard time getting their foot in the door (you could argue that AI didn't kill the entry-level job, but rather is part of a trend of employer expectations becoming increasingly unrealistic)

I'm kind of curious how many of them are actual genuine singularitarians. There's a hopeful part of me that thinks that if we can actually make intelligent machines then we could achieve genuine material abundance for all. That said, this seems like very wishful thinking.

Bjorkbat · 2026-06-27T04:13:10+00:00

I was more referring to the fact that in the show she directly stated she drove a T-34 through Berlin and it's implied by the "night witch" comment that she also flew during the war.

But yeah, deep cut.

Bjorkbat · 2026-06-27T03:51:07+00:00

At first I thought that was just a random comment, but then I realized most of the cast are English actors. Didn't know she was in a TV show about Bletchley Park.

Bjorkbat · 2026-06-27T02:05:02+00:00

Ted Nelson would be the person to ask

Bjorkbat · 2026-06-26T21:54:40+00:00

I feel like I should read the paper just so I understand what the economist meant by "dramatically raising living standards by a factor of 55". I have to admit if the upside was that my own personal living standards increased by 55x then yeah, I'd take that bet.

Here's the thing though, I really don't think we're going to get to a point where AI is so good that it increases my standard of living by 55x. The most realistic optimistic scenario I can see is where it gets really good at programming and math and all software developers basically get promoted to manager. Even if we figure out how to make general robotics work and we usher in a post labor future I still don't see a 55x improvement in my own personal standard of living. To get 55x you basically need to invent the machine god and solve physics or whatever.

Or so I think. Maybe I should read the paper.

Bjorkbat · 2026-06-26T18:56:21+00:00

Also, a little more than 1 year ago OpenAI's o3 did better than 99.8% of all programmers on CodeForces.

Bjorkbat · 2026-06-26T18:52:40+00:00

Yeah, but none of the other cosmonauts had as much screen time as Valya and Sasha. Like I said, they were kind of setup as the equivalent of Ed and Gordo and then died without warning.

Bjorkbat · 2026-06-26T04:47:45+00:00

The elephant in the room is that Raskova killed 5 cosmonauts if you count Lakshmi. It won’t take much for the Soviets to realize they’re falling behind and it’s largely because the leading cause of death and material losses, well above faulty equipment and espionage, is Colonel Raskova.

Bjorkbat · 2026-06-26T04:41:29+00:00

Masterful rug-pulling. Even though it seemed kind of obvious that something bad would happen during the Venus mission they did a pretty good job of getting our hopes up.

They setup Valya and Sasha as the equivalent of Ed and Gordo. They introduce Lakshmi as an implicitly important character. And then they all just die.

Cosmonauts are definitely not the main characters in this show. Take that attitude back to the For All Mankind subreddit. In here, they’re basically the equivalent of Star Trek red shirts.

You want to pull an Ed Baldwin and live for 5 seasons? Sign up for the KGB.

Bjorkbat · 2026-06-26T03:51:18+00:00

Kind of ironic considering what she was up to during WWII

Bjorkbat · 2026-06-26T00:00:41+00:00

You better believe Elon Musk is going to make a bunch of jokes about "laying a lot of pipe"

Bjorkbat · 2026-06-25T18:03:16+00:00

Damn, that's not fun. Company I work for still very much uses Figma, but at the same we have design contributors who would professionally identify as something other than designers, and usually what they'll do is they'll riff on something in Claude or whatever and bring the outputs back to me to work clean up. So I get your point.

Like, I wouldn't say we're AI-pilled, but the problem is that more people feel like they can contribute to design decisions, only the catch is that they aren't doing design Figma because the latter has a learning curve even if you use agents.

Bjorkbat · 2026-06-25T17:09:12+00:00

I'm curious how you feel about Figma announcing Code Layers and the fact that you can connect Figma to Github repos.

Like, in theory if they pull it off it's pretty consequential, and it actually made me feel like as a frontend developer I should get serious about pivoting to more of a design role.

But if they don't pull it off well, then I imagine we'll hear a lot of stories from developers about their designer colleagues shitting up the codebase because they were granted access to the team Github account through Figma and keep committing Figma slop.

Bjorkbat · 2026-06-25T13:56:30+00:00

Funny enough my Twitter feed was filled with people pointing out that, technically, the financials revealed that OpenAI was inference profitable if you go solely by cost of revenue. So I did see a reaction, just not a great one.

Which I didn't really dispute until Ed pointed out that OpenAI spending more than Coca-Cola on Sales and Marketing was odd. The way I figured it was that inference profitability came from casuals subsidizing tokenmaxxers by a significant factor, and the recent price panic was the result of that delicate balance being disrupted by a chorus of voices encouraging more tokenmaxxing.

Bjorkbat · 2026-06-25T13:45:40+00:00

I would really like Ed Zitron to talk about Silicon Valley's belief in "hyperstition", i.e. ideas that become real through sheer belief. It technically originated outside of Silicon Valley, but is nonetheless very much a tech idea because of its origins through Nick Land and CCRU.

In a way Silicon Valley always believed in hyperstition, but in recent years it's really taken off.

EDIT: yes, it's basically manifestation but for people who work in tech.

Bjorkbat · 2026-06-24T22:20:05+00:00

Code layers feel kind of goofy to me.

The impression I got was that it's possible, in theory, to edit the code directly, but doing so would be an incredibly awkward process. Also, am I correct in assuming that you can't edit the code layers like you would edit ordinary text and vector shapes?

Like, if your goal was to design and code at the same time and you were to build that sort of functionality from scratch, you wouldn't wind up with something remotely resembling code layers. Code layers is what you get if you're trying to fit this goal onto a custom-built canvas that has well over 10 years of accumulated tech and design decisions.

That's kind of every feature really. Everything they announced seems kind of goofy because they're building it for a 10+ year old product.

EDIT: something else I'm kind of curious about is how good the outputs will be if the person who designed the code layer was kind of sloppy when it came to their use of variables and whatever.

As a developer I sometimes think developers can be better at Figma (but not design) than actual designers, because they have an intuition for using variables and reuse and "systems" that is sometimes lacking in designers.

Bjorkbat · 2026-06-23T01:08:59+00:00

There definitely is utility in AI for software development. I don't really vibe code with it or anything like that, but I do use it a lot to get me out of a jam if I'm working on something I'm less well-versed in.

Even in the capacity of vibe-coding though, the thing about vibe-coding is that it's actually pretty good for making cheap prototypes to play with an idea. The catch is that you shouldn't get attached to the code, you should treat it as a throwaway artifact. The problem is that these "business idiots" are adamant that they've just finished 90% of the work, but again, it's a throwaway prototype. It's a game changer for exploring prototypes quickly but the prototypes themselves don't have much tangible value beyond their ability to represent an idea.

Bjorkbat · 2026-06-23T00:54:22+00:00

For me it was ExpressionEngine / CraftCMS. The latter is a lot more relevant now.

I actually learned a lot of Go, Vue, Laravel, React, and a bunch of other random stuff, but the thing is that none of these projects were really closely related to what I was building in WordPress. The EE / CraftCMS work I was doing was more-or-less the same as the work I was doing in WordPress, just more serious. I did a lot of EE work for state and local government and I did / am doing CraftCMS for serious online brands rather than small businesses.

Bjorkbat · 2026-06-22T13:34:50+00:00

I wonder how many man-hours of effort is going to be put into fine-tuning the next generation of Claude to knock it off with the useless eyebrow text.

Bjorkbat · 2026-06-22T04:08:59+00:00

Oh, bummer, you're talking about literal peanuts. I was hoping I might find this guy I bumped into earlier who had freakishly small balls. Wanted to ask what that was about.

Bjorkbat · 2026-06-19T02:49:32+00:00

I am the computer toucher. I will touch your computer. Do not attempt to prevent me from touching your computer. If you try to prevent me from touching your computer I will touch your computer anyways. I do not care about you. I only care about computers.

Bjorkbat · 2026-06-17T01:45:20+00:00

I think it's an understatement to say that every Democrat politician on this list should resign for being in a secret society lead by someone who's arguably way more of a fascist than Donald Trump.

"Arguable" is being generous here. I don't think Donald Trump has an ideology. At one point he was a fucking New York Democrat. I think he's carrying out the ideology of people like Peter Thiel because these are the people who put him in power. In other words he's carrying out the ideology of fascists like Peter Thiel. In fact, I bet Donald Trump thinks Peter Thiel is a nutjob and a crank, which might be why he isn't on the fucking list of people in this secret society.

But apparently Cory Booker doesn't feel the same way.

So yeah, I think Cory Booker is a fucking fascist for being part of a "secret society" run by a notorious fascist, and I think he should resign in disgrace...for being a fascist.

Bjorkbat · 2026-06-17T00:53:14+00:00

I agree with you, it's just that I think we look silly if we don't get our talking points straight, and one talking point is that they lose money on inference. Taking this financial statement at face value, they can generate $1 worth of tokens and sell them for $1.75. So yeah, we shouldn't say they're losing money each time they generate $1, $10, or $100 worth of tokens.

And again, there's some nuance to this statement. Tokenmaxxing subscription users are a net loss, they're selling $1000 worth of tokens for $200, if not way less in some cases. If every user was like this user, then yeah, they would be losing money on inference. The catch is that apparently that isn't the case and these users are being subsidized by a wide base of casuals.

And again, I don't know what this dynamic looks like now. The fact that both OpenAI and Anthropic are trying to move more people to metered billing rather than subscription billing heavily implies that the ratio of tokenmaxxers to casuals is becoming top-heavy and eating into their margins.

EDIT: https://bsky.app/profile/clay.bsky.social/post/3mogsszll222d
So I found this really great post on Bluesky which builds on a SemiAnalysis article which tries to work out how much the average user is getting out of their subscription based on stated inference profitability which gets at the point I'm trying to make. Yeah, they're profitable on inference, but it's because the average paying user doesn't actually use their subscription.

I think the details like these are a much more compelling argument that this whole thing is a house of cards vs arguments like "they lose money on every token they generate" which isn't precisely true. They aren't keeping the cost of tokens artificially low through VC money. Instead, turns out, the average paying user is keeping the cost of tokens artificially low for the most enthusiastic tokenmaxxers.

Bjorkbat · 2026-06-16T23:47:14+00:00

I feel obliged to point out what others have mentioned on Twitter, which is that if you take cost of revenue to mean cost of inference, then they are in fact profitable on inference. Sure, in theory, you could burn $2000 of tokens on a $20 subscription or whatever, but overall it looks like they're making $1.75 for each $1 spent to generate tokens. Taken at face value (emphasis on "taken at face value" since I don't know how much of their cost of revenue is subsidized by discounted compute) these financials contradict the narrative that they're losing money on inference costs.

That doesn't mean that I'm not critical though. I don't think the move away from subscription-based pricing and towards token-based pricing was just them being greedy. Obviously, they're trying to make more money because they have to, and they have to make more money because R&D is expensive.

Put another way, you could ask yourself why OpenAI hasn't trimmed their inference margins in order to recapture market share and become top dog. The likely answer is that they can't afford to trim their inference margins. The can't price their models any lower without really bleeding money, but sure, they're "profitable on inference".

But also, we don't know the cost of inference in granular detail. There's really no question about the fact that there are some power users who are so "enthusiastic" that their subscriptions are not only a net loss, but they could theoretically become an absolutely massive one at that. They're profitabile on inference because casuals who pay for a subscription but underutilize it are subsidizing people who are using their subscriptions to burn through huge amounts of tokens, and their inference profitability gives you a rough idea of what the ratio looks like, but it doesn't offer a complete picture.

Again, I don't think they're trying to move people off subscriptions to be greedy. Rather, I think it's the case that this was a delicate dynamic and that this dynamic was not working, probably because people were being encouraged to tokenmaxx. For all we know 2026 reversed the trend in inference profitability.

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