Just playing devil's advocate: VCs (esp those who missed out on OAI) are heavily incentivized to root for OAI to fail, and commoditize the biggest COGs item (AI models). This guy is just talking his book.
wise man once said: "the devil doesnt need advocates, hell is full of them". you can both talk your book and also sincerely believe what you say. ad hominem (or whatever the latin equivalent is of ad bookinem) is not as substantive a criticism as you make it out to be. he can be both biased and correct.
And you can even turn the viewpoint around and say that he is putting his money where his mouth is.
It's always been possible to "do (worse) AI on less compute". We've had years of open models! I also don't understand how anyone can see this as anything but good news for OpenAI. The ultimate value proposition of AI has always depended on whether it stretches to AGI and beyond, and R1 demonstrates that there's several orders of magnitude of hardware overhang. This makes it easier for OpenAI to succeed, not harder, b…
The point is that this was developed outside of OpenAI. So the real question is why does anyone believe that OpenAI will bring AGI when actual innovation was happening in some hedge fund in China while OpenAI was going on an international tour trying to drum up a trillion dollars.
Okay, that argument makes no sense to me. I thought the whole point of VC is that money is cheaper than time to market? So OpenAI didn't microoptimize their training code, sure, but they didn't need to. All the innovation of R1 is that they managed to match OpenAI's tech demo from like a year ago using considerably worse hardware by microoptimizing the hell out of it. And that's cool, full credit to them, it's a mighty impressive model. But they did it like that because they had to. It's very impressive given their constraints, but it doesn't actually advance the field.
> I’d argue that the most valuable companies of the AI era don’t exist yet. They’ll be the startups that harness AI’s potential to solve specific, costly problems across our economy—from engineering and finance to healthcare, logistics, legal, marketing, sales, and more. I feel like the author's concluding point contradicts himself. There is a gold rush and OpenAI is selling shovels.
> I’d argue that the most valuable companies of the AI era don’t exist yet. They’ll be the startups that harness AI’s potential to solve specific, costly problems across our economy—from engineering and finance to healthcare, logistics, legal, marketing, sales, and more. I feel like the author's concluding point contradicts himself. There is a gold rush and OpenAI is selling shovels.
> OpenAI is selling shovels.
I think the author argues that OpenAI is not the only one selling shovels, and their shovels won't be always better that others'.
We’ve just learned that it’s possible to do AI on less compute (deepseek). if OpenAI doesn’t scale and that’s the problem then I’d argue that in the long run, if you believe in their ability to do research, then the news this week is a very bullish sign. IMO the equivalent of moores law for AI (both on software and hardware development) is baked into the price, which doesn’t make the valuation all too crazy.
It's always been possible to "do (worse) AI on less compute". We've had years of open models! I also don't understand how anyone can see this as anything but good news for OpenAI. The ultimate value proposition of AI has always depended on whether it stretches to AGI and beyond, and R1 demonstrates that there's several orders of magnitude of hardware overhang. This makes it easier for OpenAI to succeed, not harder, b…
The interesting part is that distillations based on reinforcement learning based models are performing so well. That brings the cost down dramatically to do certain tasks.
DeepSeek has demonstrated that there is no technical moat. Model training costs are plummeting, and the margins for APIs will just get slimmer. Plus model capabilities are plateauing. Once model improvement slows down enough, seems to me like the battle is to be fought in the application layer. Whoever can make the killer app will capture the market.
> I’d argue that the most valuable companies of the AI era don’t exist yet. They’ll be the startups that harness AI’s potential to solve specific, costly problems across our economy—from engineering and finance to healthcare, logistics, legal, marketing, sales, and more. I feel like the author's concluding point contradicts himself. There is a gold rush and OpenAI is selling shovels.
I thought Nvidia is selling shovels
Nvidia is selling shovels. OpenAI is renting out mining crews
> I’d argue that the most valuable companies of the AI era don’t exist yet. They’ll be the startups that harness AI’s potential to solve specific, costly problems across our economy—from engineering and finance to healthcare, logistics, legal, marketing, sales, and more. I feel like the author's concluding point contradicts himself. There is a gold rush and OpenAI is selling shovels.
I thought Nvidia is selling shovels
Mickey Mouse animated the shovels with the big spell book, and now they're marching around and need shovels of their own...
> I’d argue that the most valuable companies of the AI era don’t exist yet. They’ll be the startups that harness AI’s potential to solve specific, costly problems across our economy—from engineering and finance to healthcare, logistics, legal, marketing, sales, and more. I feel like the author's concluding point contradicts himself. There is a gold rush and OpenAI is selling shovels.
It's that OpenAI is investing tens of billions of dollars in shovels and others, like deepseek, are open sourcing equivalently good shovels.
The vertical specific companies, though, are harder to clone as the invest in the product offering around/on top of AI
> I’d argue that the most valuable companies of the AI era don’t exist yet. They’ll be the startups that harness AI’s potential to solve specific, costly problems across our economy—from engineering and finance to healthcare, logistics, legal, marketing, sales, and more. I feel like the author's concluding point contradicts himself. There is a gold rush and OpenAI is selling shovels.
I’d say Nvidia is selling shovel factories (training hardware), OpenAI is renting shovels (trained models as a service), and DeepSeek gave everyone a shovel for free.
But Nvidia is also selling steroids (inference hardware) that everyone will need to use their new free shovels.