Here's a source from 2019 that says: "By 2023, the number of knowledge workers in the world will increase to 1.14 billion, with more than four-fifths of that growth coming from the emerging world."
To add an actual source to this thread, a brief paper by researchers at the International Labour Organization (ILO) states that for knowledge workers globally "... there
are between 644 and 997 million jobs, which represents
between 19.6 per cent and 30.4 per cent of global
employment respectively." [1]
[1]: Berg, Janine and Gmyrek, Pawel, Automation Hits the Knowledge Worker: ChatGPT and the Future of Work (April 21, 2023). UN Multi-Stakeholder Forum on Science, Technology and Innovation for the SDGs (STI Forum) 2023, Available at SSRN: https://ssrn.com/abstract=4458221
Globally, sure. The assumption here is all users are on the same economic footing, they are not. Only about a 1/3rd (at most) of that count can afford $1000+ monthly, and even then that is wildly out of line with what most will.
I googled "number of knowledge workers worldwide" and read the top results. If you read it as I was confident in a billion I apologize, Im just trying to get an accurate count. What numbers do you have now and where did you find them?
That's not the TAM of 1B knowledge workers globally. If that were the case many industries would have a 2-3x target market.
To simplify break that 1B up into 3 levels of purchasing:
1) High-tier (US, Western EU, ANZ, Japan, South Korea, Singapore, UAE, etc) - 200-250M knowledge workers.
2) Mid-tier (Eastern EU, Latin America, urban China, India tech sector, etc) - 300-400M
3) Low-tier (Rest of the world) - 300-400M
Low-tier users are mostly free tier or heavily subsidized pricing.
Mid-tier are going to account for USD sub-$100 tiers. Probably averaging less than $50/seat.
High-tier are who you are assuming is the 1B. Users are not equal in that knowledge worker count, so there aren't 1B knowledge workers to charge money.
And when you consider Low-tier users a majority of those are free users which need to be subsidized by the High-tier users. So either free tiers get much more restrictive or the providers lose additional training data. A bulk of Low-tier users cost money and provide little to no revenue.
Edit:
And think about Mid-tier and Low-tier for 5 seconds. Why would they pay Anthropic or OAI when they get get 100x+ inference from DeepSeek or Xiaomi? Mid-tier may be the only area that is willing to spend money on a US provider, but I would wager significantly on the fact that users in the Low-tier almost universally do not care.
Thank you. So with these numbers it seems like half a billion subscriptions at $500/yr is on the table. Obviously theres going to be competition in this market and self hosting cheap models may become the dominant use case. Assuming the labs are able to get most of the market though, the market size is something like a quarter trillion a year within the next decade. It's hard for me to imagine the whole sector failing if that happens.
I do think free accounts are going to end pretty soon, and some of the workers in your tier 3 will pay, but even without them this seems like a pretty healthy market size. I also wouldnt be surprised if mid tier workers are able to afford the $1000/yr vs $500. I use yearly rates because I find it easier to compare them to GDP/salary numbers
I mean, sure. Assume all you want but to guess that the entirety of High-tier plus almost all of the Mid-Tier will spend, on average $500 per annum is bonkers.
I believe we've started to see the top of what individuals and businesses are willing to pay for the current model capabilities. We are nowhere near AGI and models are really only providing significant value in niche markets currently (programming and cybersecurity). And just like SaaS the enterprise has the option to buy hardware and leverage their own models at will which can potentially offset costs and TAM as well. I have talked to a number of large financial corporations in the last 6 months and most have internal initiatives. The same applies in the healthcare vertical.
$250B per annum with AI? That's 20% of global software spend now. Sure, that's possible but that assumes current market prices hold. What if inference ends up normalizing between DeepSeek/Xiaomi & Anthropic/OAI? There's 50% of your revenue and with current costs for inference and training in the US at astronomical levels the US AI industry could also very well be setup to implode overnight.
Lastly I don't believe free can go away anytime soon because it can't. As soon as Anthropic and OAI remove that option those users will move to whatever is. For most of those users it's not a luxury to choose, it is the only option.
The financial engineering occuring right now is something I don't doubt will be text book lessons of the future. We've seen it before and I believe Peter Sorkin when he says that we will see a crash of this bubble, it's just a matter of how catastrophic it ends up being.
I agree that a lot has to go right for the AI labs for it to work out for them, I just dont think it's already over like the top comment in this thread seems to. MSFT makes $55 billion on their office products, the AI labs can use a similar strategy I think. I think AI assistants will be more indispensable than office products within a decade. Hard for me to imagine doing office work without an assistant a few years from now, but maybe I need a better imagination.
A lot of those ‘edge cases’ in the definition of “knowledge worker” are probably the stuff that’s most likely to have significant parts of the work augmented or replaced by AI agents. Like, call-centers are almost certainly going to get turned over in a big way. It’s not like the median tier-1 support operator just reading off a script is much better than an LLM anyway.
