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The OpenAI graveyard: All the deals and products that haven't happened

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Re: The OpenAI graveyard: All the deals and products that haven't happened

#161

Post by notahacker »

ApolloFortyNine wrote: post #117
mandevil wrote: post #95

Earlier quoted context omitted.

Visicalc is often described as the killer app of the first generation Personal Computer(1). It was the product that drove them into every small business in the country, that blew up sales of personal computers and brought them out of the realm of hobbyists into enterprise. And, honestly, I think Visicalc and spreadsheets are still a greater benefit than what I've seen out of generative AI today. And that happened a l…

>If the end result of this is "certain classes of white collar workers are 10-25% more productive" (which is the best results I can extrapolate from what I've seen so far) then it's really hard to imagine how OpenAI can return a profit to their investors. If we take this as face value, and say that the absolute best case scenario is there are literally no other uses for AI but helping programmers program faster, give…

> If we take this as face value, and say that the absolute best case scenario is there are literally no other uses for AI but helping programmers program faster, given 4.4 million software devs, with an average cost to the company of $200,000 (working off the US here, including benefits/levels/whatever should be close), those 4.4 million devs with 20% productivity would save roughly 176 billion dollars a year.

I don't think that's necessarily out of line with struggling to return a profit to investors though: an individual company is only ever going to capture a tiny fraction of the productivity improvements it enables its customer base to make[1], its own cost base is unusually high for tech, and investors are seeking a 10x+ return on an $852B valuation for a company that isn't even the market leader in that segment (which isn't the only segment, but it's the optimum B2B one). You can have a great business with a great value proposition and a sustainable moat and still not generate the desired returns on investment at a $852B valuation.

[1]and that's productivity improvements over the best-known free models, not productivity improvements over reading StackOverflow

Re: The OpenAI graveyard: All the deals and products that haven't happened

#162

Post by df2sdf »

piker wrote: post #128
mandevil wrote: post #119

Earlier quoted context omitted.

Sorry, I forgot that for many engineers this is, in fact, their first time going through a technology cycle like this, and so would need more explanation. I am too young for Visicalc myself, but the cycle that I saw while I was in high school- the dot-com bubble- doesn't have convenient, easy to mark out dates like the PC does. Thinking... Thinking... Tim Berners-Lee proposing HTTP in 1989 is kinda like the original…

WOW. That does really drive home the perspective. I was an adolescent during those years and it did seem quick then, but that's an insane pace in retrospect. Amazon is perhaps a counter-example to your point, though, to be fair. It seems to me they did a lot of spaghetti throwing while making accounting losses for a good number of years. Granted, they did it on OpenAI's dining budget.

"It seems to me they did a lot of spaghetti throwing while making accounting losses for a good number of years."

They actually didn't. They knew what they were doing. Bezos had a proper background in Finance, unlike Altman.

Re: The OpenAI graveyard: All the deals and products that haven't happened

#163

Post by df2sdf »

banannaise wrote: post #16
Mistletoe wrote: post #8

Has there ever been a period o time where people saw a bubble coming and that we were in one, but it just inexorably refused to pop/drug out this long? This isn’t a rhetorical question, I’m wondering how this period compares to other irrational periods of the economy like railroad fever etc.

Bubbles don't pop overnight. In the aftermath of any collapse, you can generally see a pretty clear pattern of red flags (and attempts to minimize them or cover them up). Some parties notice earlier than others, but the realization is generally a much more gradual process than the collapse.

Its obvious its coming soon simply because the mismatch between hype and expectations is far too large now. Hype is necessary to lure in investment but now its reached its peak imo.

The question is, is it a big bang or a slow release?

Re: The OpenAI graveyard: All the deals and products that haven't happened

#164

Post by dragonwriter »

Mistletoe wrote: post #8

Has there ever been a period o time where people saw a bubble coming and that we were in one, but it just inexorably refused to pop/drug out this long? This isn’t a rhetorical question, I’m wondering how this period compares to other irrational periods of the economy like railroad fever etc.

> Has there ever been a period o time where people saw a bubble coming and that we were in one, but it just inexorably refused to pop/drug out this long?

The housing bubble that peaked in 2006 was raised as an issue at least as early as 2000 and became a big topic of conversation in mid-to-late 2002, which is comparable to if we had started talking about an AI bubble roughly simultaneously with the release of GPT-3 and it had become a topic of wide concern shortly after the release of GPT-3.5.

So, in short, not only “this long”, but much longer.

Re: The OpenAI graveyard: All the deals and products that haven't happened

#165

Post by esafak »

satvikpendem wrote: post #129
MadxX79 wrote: post #126

Earlier quoted context omitted.

They won't figure it out. It's the tragedy of the commons.

Then that is how it will be, it's a self correcting problem in that if they don't figure it out, their models won't continue improving.

And web sites will collapse along with them. What do you think the 'corrected' state will look like? If you use the web it is your problem.

Re: The OpenAI graveyard: All the deals and products that haven't happened

#166

Post by groby_b »

Hansenq wrote: post #122

Lots of critiques here! Something missing in this discussion is people asking _why_ it is that they're doing this. The people who work there aren't stupid! I think this is a disconnect between people who think that large companies are static entities with established products vs. large companies that still operate like a startup and are trying to grow. When you're building your business from $0 in revenue, you don't…

> When you're building your business from $0 in revenue, you don't know what will work!

When you announce a post money valuation of $852 billion, you should probably be a bit better at figuring out what works, though. You're not a scrappy startup any more, even if you like cosplaying as one.

Re: The OpenAI graveyard: All the deals and products that haven't happened

#167

Post by satvikpendem »

esafak wrote: post #165
satvikpendem wrote: post #129

Earlier quoted context omitted.

Then that is how it will be, it's a self correcting problem in that if they don't figure it out, their models won't continue improving.

And web sites will collapse along with them. What do you think the 'corrected' state will look like? If you use the web it is your problem.

More people going into insular communities like discord or creating micro sites. Like I said it's a self correcting problem, either it is fixed or it's not. It's not my problem.

Re: The OpenAI graveyard: All the deals and products that haven't happened

#168

Post by TulliusCicero »

Hansenq wrote: post #122

Lots of critiques here! Something missing in this discussion is people asking _why_ it is that they're doing this. The people who work there aren't stupid! I think this is a disconnect between people who think that large companies are static entities with established products vs. large companies that still operate like a startup and are trying to grow. When you're building your business from $0 in revenue, you don't…

Companies with non-stupid people can still do stupid things.

I think the issue with the experimentation is that they still don't have an obvious golden goose yet. Google has been able to fuck around with experiments because search/ads are always still there to carry the team and provide an infinite money spigot, even if the experiments mostly fail. But OpenAI doesn't really have an equivalent for that.

Re: The OpenAI graveyard: All the deals and products that haven't happened

#169

Post by GCA10 »

Hansenq wrote: post #122

Lots of critiques here! Something missing in this discussion is people asking _why_ it is that they're doing this. The people who work there aren't stupid! I think this is a disconnect between people who think that large companies are static entities with established products vs. large companies that still operate like a startup and are trying to grow. When you're building your business from $0 in revenue, you don't…

Ah, but when you're little, if each misstep annoys a few early users who hit a dead-end with your project, the longer-term reputational damage is trivial. You've still got 99.999% of the TAM (total addressable market) that is ready to be charmed by something new, with no negative vibes in their mind.

As you get bigger, serious numbers of people get annoyed at dealing with a company that keeps inviting us into the Roach Motel of doomed products and features. Big case in point was Google's spree, a few years back, in terms of launching big new services/features that soon afterward got shut down. Great training ground for ambitious PMs; miserable user experience.

Somewhere between the death of Google+ and the demise of Google Hangouts, even folks like me began thinking: Why should I engage with new Google stuff if it's likely to be blown up in a few years, leaving me with buried IP from whatever I tried to do?

Re: The OpenAI graveyard: All the deals and products that haven't happened

#170

Post by df2sdf »

TulliusCicero wrote: post #168
Hansenq wrote: post #122

Lots of critiques here! Something missing in this discussion is people asking _why_ it is that they're doing this. The people who work there aren't stupid! I think this is a disconnect between people who think that large companies are static entities with established products vs. large companies that still operate like a startup and are trying to grow. When you're building your business from $0 in revenue, you don't…

Companies with non-stupid people can still do stupid things. I think the issue with the experimentation is that they still don't have an obvious golden goose yet. Google has been able to fuck around with experiments because search/ads are always still there to carry the team and provide an infinite money spigot, even if the experiments mostly fail. But OpenAI doesn't really have an equivalent for that.

Or perhaps they lucked into chatGPT and the true prowess of the product function is being laid bare. They've had many failed projects now: that shopping stuff, a web browser, Sora.. the success they are having from Codex wasn't an original idea but a classic-case of copying. Have they run out of steam?

Very much possible. What has come out of Meta organically besides Facebook? Its valuation comes predominantly from the assets they acquired + investments yet to be made that build on the acquired assets.

Google is similarly iffy with product development. OAI is better still, marginally, in terms of delivering a more polished experience.

Also I do regard them stupid, simply because they are not following wisdom that was shared decades ago by someone with an incredible batting average when it comes to innovation: start with the customer experience and work backwards to the technology.

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