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OpenAI is too cheap to beat

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Re: OpenAI is too cheap to beat

#131

Post by sharemywin »

a_wild_dandan wrote: post #53
latchkey wrote: post #16

I just paid the $20 for a month to try it out. In my super limited experience, GPT-4 is actually impressive and worth the money.

The value I get for that $20/month is astonishing. It's by far the best discretionary subscription I've ever had. That scares me. I hate moats and actively want out. Running the uncensored 70B parameter Llama 2 model on my MacBook is great, but it's just not a competitive enough general intelligence to entirely substitute for GPT-4 yet. I think our community will get there, but the surrounding water is deepening, and…

tentatively called “Claude-Next” — that is 10 times more capable than today’s most powerful AI, according to a 2023 investor deck TechCrunch obtained earlier this year.

this is the thing that scare me.

when do these models stop getting smarter? or at least slow down?

Re: OpenAI is too cheap to beat

#132

Post by toddmorey »

appplication wrote: post #106

The premise of this is flawed. OpenAI is cheap because of has to be right now. They need to establish market dominance quickly, before competitors slide in. The winner of this horse race is not going to be the company with the best performing AI, it’s going to be the one who does the best job at creating an outstanding UX, ubiquitously presence, entrenching users, and building competitive moats that are not feature d…

Just heard Steve today from Builder.io who did an impressive launch of Figma -> code powered by AI.

They trained a custom model for this. Better accuracy, sure, but I was a little surprised to watch how much faster it is than GPT4.

Based on their testing, they’ve become believers in domain specific smaller models, especially for performance.

Re: OpenAI is too cheap to beat

#133

Post by strangemonad »

zarzavat wrote: post #129
Bukhmanizer wrote: post #103

Earlier quoted context omitted.

The bleeding obvious is that OpenAI is doing what most tech companies for the last 20 years have done. Offer the product for dirt cheap to kill off competition, then extract as much value from your users as possible by either mining data or hiking the price. I don’t understand how people are surprised by this anymore. So yeah, it’s the best option right now, when the company is burning through cash, but they’re plann…

OpenAI doesn’t own transformers, they didn’t even invent them. They just have the best one at this particular time. They have no moat. At some point, someone else will make a competitive model, if it’s Facebook then it might even be open source, and the industry will see price competition downwards .

This argument has always felt to me like saying “google has no moat in search, they just happen to currently have the best page rank. Nothing is stopping yahoo from creating a better one”

Re: OpenAI is too cheap to beat

#134

Post by ommpto »

wg0 wrote: post #85
joefourier wrote: post #48

Earlier quoted context omitted.

AWS is extremely overpriced for nearly every service. I don’t know why anyone else outside of startups with VC money to burn or bigcos that need the “no one ever got fired for buying IBM” guarantee would use them. You’re better off with Lambdalabs or others which charge only $1.1/h per A100. Also that is a 8xA100 system as others have noted, but it is the 40GB one which can be found on eBay for as low as $3k if you g…

There are only two services that are dirt cheap and way too reliable, useful.That's S3 and SQS. Rest can get very expensive very soon. You can build a lot of stuff on top of these two.

Even for S3 while the storage is dirt cheap they still have exorbitant bandwidth pricing.

Re: OpenAI is too cheap to beat

#135

Post by jaredklewis »

mikpanko wrote: post #124
jaredklewis wrote: post #116

Earlier quoted context omitted.

> Offer the product for dirt cheap to kill off competition, then extract as much value from your users as possible by either mining data or hiking the price. Genuine question, what are some examples of companies in that "hiking the price" camp? I can think of tons of tech companies that sold or sell stuff at a loss for growth, but struggling to find examples where the companies then are able to turn dominant market s…

- Uber/Lyft increased prices significantly (and partially transition it into longer wait times) since they got into profitability mode - Google is showing more and more ads over time to power high revenue growth YoY - Unity has just tried to increase its prices

I think Google fits more in the "extract as much value from your users" bucket more than the price hiking one.

Uber/Lyft did raise prices, but interestingly (at least to me) is that if the strategy was the smother the competition with low prices, it didn't seem to work.

Unity is interesting too, though I'm not sure it would make a good poster child for this playbook. It raised prices but seems to be suffering for it.

Re: OpenAI is too cheap to beat

#136

Post by ldjkfkdsjnv »

appplication wrote: post #106

The premise of this is flawed. OpenAI is cheap because of has to be right now. They need to establish market dominance quickly, before competitors slide in. The winner of this horse race is not going to be the company with the best performing AI, it’s going to be the one who does the best job at creating an outstanding UX, ubiquitously presence, entrenching users, and building competitive moats that are not feature d…

Completely wrong, the best AI will win. There is insane demand for better models.

Re: OpenAI is too cheap to beat

#137

Post by mg »

appplication wrote: post #106

The premise of this is flawed. OpenAI is cheap because of has to be right now. They need to establish market dominance quickly, before competitors slide in. The winner of this horse race is not going to be the company with the best performing AI, it’s going to be the one who does the best job at creating an outstanding UX, ubiquitously presence, entrenching users, and building competitive moats that are not feature d…

I don't think Uber and AirBnB are good comparisons.

Both are B2C and have network effects.

Re: OpenAI is too cheap to beat

#138

Post by paul7986 »

appplication wrote: post #106

The premise of this is flawed. OpenAI is cheap because of has to be right now. They need to establish market dominance quickly, before competitors slide in. The winner of this horse race is not going to be the company with the best performing AI, it’s going to be the one who does the best job at creating an outstanding UX, ubiquitously presence, entrenching users, and building competitive moats that are not feature d…

The PI iPhone app has a solid UX and even better UX if Apple (bought it) integrated into Siri.

Re: OpenAI is too cheap to beat

#139

Post by latchkey »

dekhn wrote: post #23
daft_pink wrote: post #7

I’m confused don’t a100s cost 10,000 to buy? Why would you pay 166k per year to rent?

How much does an A100 consume in power a year (in dollar costs)? How much does it cost to hire and retain datacenter techs? How long does it take to expand your fleet after a user says "we're gonna need more A100s?" How many discounts can you get as a premier customer? Answer these questions, and the equation shifts a bunch!

$50m GPU capex (which is A LOT) is about 2-3MW of power, it isn't that much.

The problem though is that getting 2-3MW of power in the US is increasingly difficult and you're going to pay a lot more for it since the cheap stuff is already taken.

Even more distressing is that if you're going to build new data center space, you can't get the rest of the stuff in the supply chain... backup gennies, transformers, cooling towers, etc...

Re: OpenAI is too cheap to beat

#140

Post by YetAnotherNick »

zarzavat wrote: post #129
Bukhmanizer wrote: post #103

Earlier quoted context omitted.

The bleeding obvious is that OpenAI is doing what most tech companies for the last 20 years have done. Offer the product for dirt cheap to kill off competition, then extract as much value from your users as possible by either mining data or hiking the price. I don’t understand how people are surprised by this anymore. So yeah, it’s the best option right now, when the company is burning through cash, but they’re plann…

OpenAI doesn’t own transformers, they didn’t even invent them. They just have the best one at this particular time. They have no moat. At some point, someone else will make a competitive model, if it’s Facebook then it might even be open source, and the industry will see price competition downwards .

The difference between openai and next best model seems to be increasing and not decreasing. Maybe Google's gemini could be competitive, but I don't believe open source will match OpenAI's capability ever.

Also OpenAI gets significant discount on compute due to favourable deals from Nvidia and Microsoft. And they could design their server better for their homogenous needs. They are already working on AI chip.

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