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OpenAI is too cheap to beat

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Re: OpenAI is too cheap to beat

#221

Post by mlsu »

BoorishBears wrote: post #151
nine_k wrote: post #128

Earlier quoted context omitted.

In sensitive cases you do not think about the normal policy, you think about the worst case. You just can't afford a leak. Your local installation may be much better protected than a public service, by technology and by policy.

For years people have essentially made a living off FUD like "ignore the literal legal agreement and imagine all the worst case scenarios!!!" to justify absolutely farcical on-premise deployments of a lot of software, but AI is starting to ruin the grift. There are some cases where you really can't afford to send Microsoft data for their OpenAI offering... but there are a lot more where some figurehead solidified the…

Gah, this is just not how it works. You are probably right that e.g. patient information, private conversations, proprietary code, etc would be safe with OpenAI. But it's not the on-prem team that needs to convince the rest of the organization to keep things on prem. Quite the opposite -- every single tech person would love to make our data someone else's problem (and get a big career boost from dealing with cloud tech instead of the dead-end that is local sysadmin!).

But you just can't. You cannot trust the scrappy startup OpenAI. You can't even trust Microsoft's normal cloud offering, because the people who actually give a fuck about the risk NEED to have granular detail of what data, readable by whom, is stored exactly where and for how long, and how can you make sure, and how do you know that access is scoped to the absolute minimum number of people, and is there a paper trail for that?

For these "figureheads": the buck, stopping, here, etc.

Re: OpenAI is too cheap to beat

#222

Post by noah_buddy »

paulddraper wrote: post #214
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…

> Someone try calling an Uber in SF today and tell me how much that costs you Yet...what is the biggest U.S. ride share app? Hungry Hippos is true. But it also works.

It’s a funny point. After only taking Ubers and Lyfts all my adult life (young), I have recently switched to cabs because they are cheaper in my city (and I tell everyone I know to do the same). They have dominance now but if I had to guess whether cabs or Uber will still exist in 100 years… I know which I would bet on.

Re: OpenAI is too cheap to beat

#223

Post by user3939382 »

adam_arthur wrote: post #179
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 winner is going to be the consumers of AI. It's a race to the bottom on pricing on the provider/infra side. It seems very unlikely that any single LLM provider will achieve a sustained and durable advantage enough to achieve large margins on their product. Consumers can swap between providers with relative ease, and there is very little stickiness to these LLM APIs, since the interfaces are general and operate on…

> The winner is going to be the consumers

Cloud infra may be a comparable market, since computation is a big share of AI costs. Did consumers win big from competition between AWS, Azure, and GCP? Not sure. I see an uptick in write ups saying “We switched off cloud and reduced costs by 2/3rds.” Not a scientific sample but may leave the question open.

Re: OpenAI is too cheap to beat

#226

Post by renewiltord »

sbierwagen wrote: post #175
PaulHoule wrote: post #160

Earlier quoted context omitted.

Depends how you define quality. This paper reflects my own experience https://arxiv.org/abs/2305.08377 and shows how LLM technology has a lot more to offer than "ChatGPT". The real takeaway is that by training LLMs with real training data (even with a "less powerful" model) you can get an error rate more than 10x less than you get with the "zero shot" model of asking ChatGPT to answer a question for you the same way…

> Remember that Moore's Law is over in the sense that transistors are not getting cheaper generation after generation, that is why the NVIDIA 40xx series is such a disappointment to most people. I am unconvinced by the idea of trying to redefine Moore's Law to be about MSRP. The NVIDIA H100 has twice the FLOPS of the A100 on a smaller die. That's Moore's Law, full stop. When NVIDIA has useful competition in the AI sp…

Yeah, everyone has their own "Moore's Law" that's over, but original Moore's is kicking along.

Re: OpenAI is too cheap to beat

#227

Post by redox99 »

Havoc wrote: post #45

Yep. Building a project that needs some LLMs. I'm very much of the self-hosting mindset so will try DIY, but it's very obviously the wrong choice by any reasonable metric. OpenAI will murder my solution by quality, by availability, by reliability and by scalability...all for the price of a coffee. It's a personal project though & partly intended for learning purposes so there is scope for accepting trainwreck level t…

Maybe this has improved, but a few months ago, OpenAI p99 latency was much worse than a self hosted solution, which would be a problem in certain cases.

Re: OpenAI is too cheap to beat

#228

Post by mbb70 »

jdminhbg wrote: post #166
strangemonad wrote: post #133

Earlier quoted context omitted.

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”

Google has a flywheel where its dominant position in search results in more users, whose data refines the search algorithm over time. The question is whether OpenAI has a similar thing going, or whether they just have done the best job of training a model against a static dataset so far. If they're able to incorporate customer usage to improve their models, that's a moat against competitors. If not, it's just a battl…

But that's exactly what they have: millions of high quality, rated chat interactions that no one else has.

I don't know how they could _not_ incorporate customer usage to improve their models.

Re: OpenAI is too cheap to beat

#229

Post by xmprt »

noah_buddy wrote: post #222
paulddraper wrote: post #214

Earlier quoted context omitted.

> Someone try calling an Uber in SF today and tell me how much that costs you Yet...what is the biggest U.S. ride share app? Hungry Hippos is true. But it also works.

It’s a funny point. After only taking Ubers and Lyfts all my adult life (young), I have recently switched to cabs because they are cheaper in my city (and I tell everyone I know to do the same). They have dominance now but if I had to guess whether cabs or Uber will still exist in 100 years… I know which I would bet on.

Cabs are an idea. Uber is a company. I can't think of any company that I'd predict to last 100 years. Even Google and Apple probably won't last 100 years. I honestly wouldn't even bet on cars being a dominant form of transportation in 100 years.

Re: OpenAI is too cheap to beat

#230

Post by sarchertech »

saminaustin wrote: post #217
sarchertech wrote: post #25

Earlier quoted context omitted.

I haven’t heard any evidence that they have millions of Plus subscribers. I’ve seen 100 to 200 million active users, but nothing about paid users from them. The surveys I saw when doing a quick google search reported much less than 1% of users paying.

Revenue runrate is over a billion a year now. https://seekingalpha.com/news/4007459-microsoft-backed-opena...

My guess is that’s mostly API users not chatgpt plus users.

I’m also very curious how much of that money is VC money coming from startups trying to build their customer base, vs how much actually sustainable.

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