> Note, at 5% productivity boost, humans are not just in the loop, they are the loop. AGI or large-scale replacement of humans is not even needed, but the financial opportunity is already immense, and it scales with how much human productivity can be improved (i.e. how much work can be offloaded to LLMs.)

The studies I've seen recently (at least in the software space) put it at something like a 10% increase in coding speed, which for me would probably translate to something like a 3% increase in productivity. I spend a lot more time on things like getting agreement between teams, documenting approaches to things that don't exist on the wiki, etc, that LLMs are significantly less effective at. Or just can't do; no one will be happy if I send an LLM instead of me to meetings.

I suspect a lot of roles are like that. They give a 10-30% boost to the core role function, but that core role is still only 30-50% of what you do.

> that is ~1.5 - 2.5T in value annually

That seems really large, but it's ~2-3x Walmart's yearly revenue, and OpenAI and Anthropic both have estimated valuations that compare to Walmart's market cap. And this is before we consider that they need to do it for cheaper or why would anyone bother. Realistically, potential revenue is probably half that at best.

It's also before cutthroat pricing really kicks in. People are willing to pay for Claude right now; I still suspect that as time goes on people will start looking towards Deepseek/GLM/etc models that provide 95% of the performance at 10% of the price. That'll cut the market even further.

The question is how much demand for knowledge work swells as prices fall, and whether that's a soft landing or a crash.

> That seems really large, but it's ~2-3x Walmart's yearly revenue, and OpenAI and Anthropic both have estimated valuations that compare to Walmart's market cap. ...

It's also before cutthroat pricing really kicks in.

Right, that's more of an estimate on the value proposition of the overall AI industry, rather than valuations of the industry or specific players. While I don't think OpenAI and Anthropic will capture all of the potential upside, I do suspect they will do much better than other players despite the competition (https://news.ycombinator.com/item?id=48740472)

> And this is before we consider that they need to do it for cheaper or why would anyone bother.

Typically yes, but there are reasons companies may be willing to pay the same amount or even more, such as "AI doesn't need sleep, holidays, insurance, or benefits" and "AI is easier to procure and replace than humans."

> The studies I've seen recently (at least in the software space) put it at something like a 10% increase in coding speed...

Curious to see which studies you're looking at, the studies I'm thinking of (some here: https://news.ycombinator.com/item?id=45379452) are from 2024 - 2025, so already old and before agents really took off.

However, your point about meetings and agreements and documenting is much more germane. My theory is that the largest productivity gains -- and subsequent labor displacement -- will come from reducing coordination overhead: https://news.ycombinator.com/item?id=48040999