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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

#111

Post by jncfhnb »

anon-3988 wrote: post #88
jncfhnb wrote: post #77

Earlier quoted context omitted.

The duopoly isn’t really as problematic as the concept itself. Credit cards, where customers are bribed to insert a middleman into all transactions and suppliers are largely powerless to refuse it; are a plague. The switching costs of a consumer to a different credit card are small. The switching cost of a business saying they no longer allow certain payment types is potentially very painful.

I mean, you could email customer support and mail them cash? Why do you think this middleman is unnecessary? Whats the alternative?

The problem is not that credit cards exist; it’s that the market dynamics do not force it to be a minimal profit service layer. We have credit cards regifting multiple percentage points off of every purchase which creates a vicious incentive that businesses are largely powerless against

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

#112

Post by jncfhnb »

dangus wrote: post #96
lxgr wrote: post #92

Earlier quoted context omitted.

If they provide that much value to consumers intrinsically, then why are banks paying the same consumers to use them? I completely agree that credit (and just as much, if not more, debit) cards are an incredibly useful invention and great accelerator for online commerce. I don't know of any other way of paying a merchant I know next to nothing of that will allow me to get my money back if they do not deliver on their…

I think you're missing the point here a little bit. To break this down more simply: Credit cards: Merchants pay 3% and pass the cost on to the customer, IRS gets the vast majority of business taxes paid (no way to under-report taxable income), average person gets all the benefits of a fully funded government plus 1-2% of their purchase back in credit card rewards. Average person also gets a revolving credit line with…

Consumer friendly is not the only thing we should care about.

It’s also utterly fucked that it’s a system that disproportionately rewards people for being wealthy as richer people have access to better cards

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

#113

Post by Spooky23 »

lxgr wrote: post #92
Spooky23 wrote: post #83

Earlier quoted context omitted.

Credit cards are probably the most consumer friendly innovation ever — a product of the time they were developed. It was an era when the federal government functioned and the credit card operations were so problematic a heavy hand was required. Every supposedly better alternative adds margin for the supplier, increases the risk of fraud, and leaves the user with poor recourse due to the lack govnerment regulation. Ad…

If they provide that much value to consumers intrinsically, then why are banks paying the same consumers to use them? I completely agree that credit (and just as much, if not more, debit) cards are an incredibly useful invention and great accelerator for online commerce. I don't know of any other way of paying a merchant I know next to nothing of that will allow me to get my money back if they do not deliver on their…

In a market, participants woo customers with financial and other incentives to select their product.

The price discovery stuff is pretty obvious. Do business with PayPal. It works great… until PayPal arbitrarily decides to freeze your account. Use Venmo or cash app… except sellers will pressure you to treat it like a gift vs. a purchase. You can use ACH, but now some random company has access to your checking account.

Or… you can use a credit card, probably get a 2% kickback, and the merchant pays like 3% unless they’re in a high risk business. If there’s a problem like fraud, the bank eats it.

The biggest whiners about fees are small businesses, especially restaurants. These are businesses where it’s super easy to launder cash and avoid tax reporting.

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

#114

Post by abdullahkhalids »

bko wrote: post #20
ToucanLoucan wrote: post #15

Earlier quoted context omitted.

> The thing with credit cards is that you can have more than one. I have a Visa and a Mastercard and when I shop at Costco I use Visa. Well... yeah. No shit. Because you couldn't use the Mastercard if you wanted to. That's what this article is complaining about. And in their most recent quarter Costco posted a handy 80 billion in net sales, I'm betting those processing fees added up to a tidy sum for Visa, corroborat…

Is it any different from a movie theatre or restaurant selling only Pepsi products due to exclusive agreement? Or Playstation paying for a game to be distributed only on their platform? How about a sports team only allowing Reebok or Nike or Adidas or whatever? Don't get me started on Netflix only movies!

Yes, all these are anti-competitive. But illegally anti-competitive? That is not really possible to resolve in a HN comment. Every market in every region is different, and whether some exclusive contract is or is not anti-competitive has to be resolved in court, which looks at all the details of the matter.

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

#115

Post by Spooky23 »

jncfhnb wrote: post #112
dangus wrote: post #96

Earlier quoted context omitted.

I think you're missing the point here a little bit. To break this down more simply: Credit cards: Merchants pay 3% and pass the cost on to the customer, IRS gets the vast majority of business taxes paid (no way to under-report taxable income), average person gets all the benefits of a fully funded government plus 1-2% of their purchase back in credit card rewards. Average person also gets a revolving credit line with…

Consumer friendly is not the only thing we should care about. It’s also utterly fucked that it’s a system that disproportionately rewards people for being wealthy as richer people have access to better cards

Not at all. Back in the 90s, I had an American Express Gold Card, probably the premier travel card at the time. It was expensive, but for my specific situation, the travel benefits were basically making me $500 a year, alot of money for me.

People with good credit have access to better cards. It’s about people who pay their shit on time, not wealth.

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

#116

Post by ltbarcly3 »

OpenAI isn't even close to a monopoly, and if it did it has none of the structural advantages that a financial network has to allow it to defend a monopoly.

What a manifestly and obviously stupid article.

If you set up a financial network, you have to get a little box (often physical) in some saturation level of stores and gas stations and websites so that people will want a card that works on your network in the first place. Once you achieve saturation in both retailers and consumers, it becomes almost impossible for someone to build a competitor because nobody wants to invest to be able to accept a card nobody has, and nobody wants a card you can't use at the stores they want to shop at. There is a fundamental network effect that reinforces this monopoly.

OpenAI has literally none of these advantages. In fact it's the opposite, I think OpenAI has no defense as soon as better models come along. They've lost all of their best engineers already and that trend seems to be accelerating. Their new models don't work and are years behind, and meanwhile Anthropic and others are just as good if not better for most use cases.

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

#117

Post by lxdlam »

From my very own perspective, to compare OpenAI with any others is meaningless: AI is far different in terms of resources and business models, maybe similar to some others, but it may collapse or have the rug pulled out by another significant technology evolution, e.g., quantum computer which may ridiculously speed up the training, or a more self-update-friendly model architecture.

To the rest of us, training a usable model these days is relatively affordable, and it seems to make no difference to use a "most intelligent" model against a subtly small model. The current business blocker is to find the application fields that work for models, which is not an area where OpenAI has an advantage.

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

#118

Post by mattlondon »

typeofhuman wrote: post #110
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.

Yeah but my point is the US can do what it wants, but that's not going to stop anyone else in the world doing it. And the companies that want it will just go and get it from their China or the EU operations instead.

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

#119

Post by bdangubic »

mattlondon wrote: post #118
typeofhuman wrote: post #110

Earlier quoted context omitted.

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

Yeah but my point is the US can do what it wants, but that's not going to stop anyone else in the world doing it. And the companies that want it will just go and get it from their China or the EU operations instead.

if it was only that easy…

the US government would basically forbid you from doing business in the US if you violate what us puts into place and very few companies would willingly lose US market

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

#120

Post by AlexandrB »

rqtwteye wrote: post #93
delusional wrote: post #54

Earlier quoted context omitted.

> Yea, I don't want to defend Visa, but a lot of their dominance came from network effects. I think it's worth noting that VISA is also really doing a pretty good job. Like the cards work. Here in Europe they seem eager to adopt emerging technology and are willing to invest to maintain their dominance. There's a ton of not so consumer friendly backroom deals with kickbacks for the banks and stuff, but the core produc…

They aren't very vendor friendly and their fees are way too high. Little bit like Amazon. they are are consumer friendly at the expense of their vendors.

> they are are consumer friendly at the expense of their vendors.

Isn't this a winning formula because the consumer is the one spending the money? Imagine an opposite approach that was vendor-friendly at the expense of the consumer. I don't think most people would willingly use that.

Back before Amazon, WalMart did the same thing[1] by squeezing their vendors to lower prices and passing (some of) the savings onto shoppers.

[1] https://popularresistance.org/walmart-creates-a-race-to-the-...

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