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OpenAI is Visa – Buttering up the government to retain a monopoly

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Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#101

Post by Animats »

jopsen wrote: post #85

Lol, visa had network effect. It also took a long time to build up such a network. Replacing all payment terminals is not easy. And as a customer I'm more likely to care of my card works and not care if I'm charged x% fee. The visa trick if any, was hiding the credit card fee and pushing it to merchants. Whether its a trick or not is hard to tell, for small businesses it was probably bad, but for a big business deali…

Visa was originally a chaord - a strange construct jointly owned by competing banks. That idea never caught on, but worked. See Dee Hock's "Birth of the Chaordic Age".

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#102

Post by chii »

lxgr wrote: post #90
jopsen wrote: post #85

Lol, visa had network effect. It also took a long time to build up such a network. Replacing all payment terminals is not easy. And as a customer I'm more likely to care of my card works and not care if I'm charged x% fee. The visa trick if any, was hiding the credit card fee and pushing it to merchants. Whether its a trick or not is hard to tell, for small businesses it was probably bad, but for a big business deali…

> I'm more likely to care of my card works and not care if I'm charged x% fee. Sure, any alternative needs to work on a practical/technical level, be convenient, have fraud protection etc. But if it does, and a merchant I know and trust (these are fairly big caveats!) were to offer me a discount equivalent to what my card issuing bank pays me in cashback and then some as an incentive for paying using that alternative…

> were to offer me a discount equivalent to what my card issuing bank pays me in cashback

and that's exactly why these card networks made the merchant agree in the contract to not do exactly that.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#104

Post by senkora »

sea-gold wrote: post #56

The Acquired podcast had great episodes on the background of both Visa[1] and Costco[2]. [1] https://www.acquired.fm/episodes/visa [2] https://www.acquired.fm/episodes/costco

+1 for Acquired. They started out covering tech acquisitions but have branched out to covering non-tech companies with interesting stories. I particularly liked their episode on IKEA.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#105

Post by AdieuToLogic »

jopsen wrote: post #85

Lol, visa had network effect. It also took a long time to build up such a network. Replacing all payment terminals is not easy. And as a customer I'm more likely to care of my card works and not care if I'm charged x% fee. The visa trick if any, was hiding the credit card fee and pushing it to merchants. Whether its a trick or not is hard to tell, for small businesses it was probably bad, but for a big business deali…

> Lol, visa had network effect.

Visa, the organization, is little more than a small clearing house. Credit card issuers (banks) and credit card processors (also banks) define the network in so far as determining what organizations can be "on the visa rails" (also almost exclusively banks).

> The visa trick if any, was hiding the credit card fee and pushing it to merchants.

Merchants pay their discount rate and customers pay their interest rate. "The visa trick", as it were, was getting customer confidence in credit cards being accepted at enough merchants to warrant use.

There was never a "hiding the credit card fee." Both parties pay and always have.

There was only patience by the banks and heavy marketing to customers in order to create demand that would force merchants to have to accept credit cards.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#106

Post by Animats »

Given the business model, it's important to OpenAI that attempts to get a confidence metric out of LLMs be unsuccessful.

Here's why. If you could have simple LLMs which reported failure when asked a question they can't answer, you're going to send queries to them first. It's going to be like customer support people who answer questions from a menu but can escalate. The first-tier LLM is probably running locally on a 1U server. Harder problems get escalated to a bigger, but local, LLM. Only the really hard ones require buying some OpenAI tokens and asking the really big model.

That approach would reduce OpenAI's revenue by over 90%. What OpenAI wants is for simple models to not work reliably, so you have to use their giant models even on dumb questions.

Pushback on this will come from Google, which has to have a tier-type system to cope with their volume of queries, most of which are dumb.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#107

Post by AdieuToLogic »

insane_dreamer wrote: post #6

Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Would be helpful to have some concrete examples of what it did and what OpenAI is trying to do. The point of the article sounds plausible, but doesn't really present any evidence to support it. Also OpenAI in no way has a monopoly of the kind that Visa/MC has.

> Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly.

Visa, the organization, is little more than a small clearing house. Credit card issuers (banks) and credit card processors (also banks) define the network in so far as determining what organizations can be "on the visa rails" (also almost exclusively banks).

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#108

Post by so_delphi »

reissbaker wrote: post #64
insane_dreamer wrote: post #6

Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Would be helpful to have some concrete examples of what it did and what OpenAI is trying to do. The point of the article sounds plausible, but doesn't really present any evidence to support it. Also OpenAI in no way has a monopoly of the kind that Visa/MC has.

It's written by Taylor Lorenz. I wouldn't expect it to be particularly well-researched; just to have a maximally anti-tech slant.

so, what is your comment trying to add to the conversation apart from your imaginary expectations? have you read the article?

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#109

Post by lmz »

messe wrote: post #60
em500 wrote: post #55

Earlier quoted context omitted.

In most of Europe and several large Asian cities I visited, AMEX and Discover acceptance is far lower than Visa/MC (which charge lower fees to merchants).

AMEX/Discover is virtually unknown in most of Europe. Outside of US-defaultism, why in the world would anyone expect it to be accepted here?

Doesn't Discover have agreements with UnionPay and JCB?

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#110

Post by typeofhuman »

mattlondon wrote: post #94

How does this attempt even work these days? So let's say you get your monopoly for only OpenAI in the USA. Everyone else in the world just stops and OpenAI just gets to do what they want and name their price? I don't think so. Isn't DeepMind HQ'd in the UK already? I am sure Ireland would jump at the chance to create some friendly tax treatment again to entice competitors. And of course China can just keep being Chin…

According to Marc Andreeseen the us government will classify AI maths and only permit some companies access to it.
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