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OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

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Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#171

Post by sangnoir »

dewitt wrote: post #139
bruce511 wrote: post #136

Earlier quoted context omitted.

There is no technical moat, but that doesn't mean there isn't a moat. Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was. There's no technical moat around online sales. And lots of companies sell online. But Amazon is still the biggest (by a long long way) (at least in the…

> “Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was.” Not to take away from the rest of your points, but I thought Amazon only raised $8m in 1995 before their IPO in 1997. Very little venture capital by today’s standard.

That caught my eye too, because VCs never poured "billions" into any one company pre-dot-com bust. Unicorns were notable for being valued at $1B or more, but never raised that much in funding, and this only happened much later, a decade and a half after Amazons IPO - Amazon itself was never a unicorn, its post-IPO capitalization was $300M.

Amazon is famous for making losses after being publicly listed. Also, it was remiss of grandparent to not note that Amazon's losses were intentional for the sake of growth. OpenAI has no such excuse: their losses are just so that they stay in the game; if they attempted to turn profitable today, they'd be insolvent within months.

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#172

Post by tiffanyh »

> defensible moat … investors mistakenly thought investing in Netscape was a good way to bet on the future

Yet Chrome for Google did help create a moat.

A moat that’s is so strong the DoJ is investigating if Chrome should be a forced divesture from Google/Aplhabet.

Note: I do generally agree with the article, but this also shows why you shouldn’t use analogies to reason.

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#173

Post by thefz »

resonious wrote: post #54

The paraphrasing is very comical, but a bit different from what they actually said, which is more like "more than we had imagined".

Well it's Gruber, not really known for being a decent blogger. He's the most biased person you can get acting like a prophet on the internet.

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#174

Post by patrickhogan1 »

lesuorac wrote: post #81
wmf wrote: post #45

Earlier quoted context omitted.

Google didn't have ads until 2000. They strongly resisted banner ads (which were the only format at the time) until they invented contextual text ads.

So, it took Google a whole year to display ads. That's really not the description of a company that is " without a clear path to profitability".

It’s fascinating to think about how long it took Google to fully embrace advertising. I completely agree with the previous posters point—Google strongly resisted ads, which were everywhere back then.

Then they went full corporate and their real turning point, came in 2007 with their acquisition of DoubleClick, about 12 years after Larry Page and Sergey Brin famously claimed that advertising and search engines don’t mix.

Now compare that to OpenAI. It launched in 2015, nine years ago, but ChatGPT didn’t arrive until 2022—less than two years ago. Google took over a decade to transform its core business with ads and figure out how to become a profit machine.

Let's practice some intellectual humility and acknowledge that OpenAI still has time to work this out. History shows that even if it takes some time, that's perfectly fine.

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#175

Post by guerrilla »

saurik wrote: post #149
bruce511 wrote: post #136

Earlier quoted context omitted.

There is no technical moat, but that doesn't mean there isn't a moat. Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was. There's no technical moat around online sales. And lots of companies sell online. But Amazon is still the biggest (by a long long way) (at least in the…

A couple other comments touch on the point I want to make, but I feel they don't nail it hard enough: if today you told me you had a website that was 100% technologically identical to Amazon, but you were willing to make slightly less money, you'd still have no products... as a user I'd have no reason to go there, but then without users there is no reason to sell there, so you have a circular bootstrapping issue. Tha…

Did we forget its called the network effect?

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#176

Post by mrtksn »

cs702 wrote: post #21

This rings true to my ears: > There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble. Thus, effectively, OpenAI is to this decade’s generative-AI revolution what Netscape was to the 1990s’ internet revolution. The revolution is real, but it’s ultimately going to be a commodity technology layer, not the foundation of a defensible proprietary moat. In 1995 investors mistakenly…

> In 1995 investors mistakenly thought investing in Netscape was a way to bet on the future

Maybe they were just too early, later on it turned out that the browser is indeed a very valuable and financially sound investment. For Google at least.

So having a dominant market share can indeed be even if the underlying tech is not exactly unobtainable by others.

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#177

Post by tw1984 »

sdesol wrote: post #132
seanmcdirmid wrote: post #127

Earlier quoted context omitted.

It is a very large world though, and nationalism is more of an American shtick at the moment. It is totally possible that countries have to decide to trade with China or the USA (if they put down an infective embargo), but then it really depends on what America offers vs. China, and I don't think that is a great proposition for us.

We are definitely heading into untreaded territory. It is one thing to use Chinese EVs, but using a knowledge system that will be censored (not that other countries won't be censored) and trained in a way that may not align with a nation's beliefs is a whole different matter.

> using a knowledge system that will be censored (not that other countries won't be censored) and trained in a way that may not align with a nation's beliefs is a whole different matter.

this is the exact same story told to the public when Google was kicked out of China. you are just 15 years late for the party.

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#178

Post by sausagefeet »

lotsofpulp wrote: post #148
chubot wrote: post #137

Earlier quoted context omitted.

Amazon does have a technical moat - fast shipping and warehouse operations. It’s not something that Walmart or Target can replicate easily. Retail margins are razor thin, so the pennies of efficiency add up to a moat

Walmart and Target have tons of warehouse expertise. Amazon’s moat is their software, where they have a far longer head start and they can afford to pay their employees due to AWS and other services’ high margins, as well as executing well on growth resulting in being able to compensate with equity. Walmart and Target were far better than Amazon at logistics at the beginning, but they couldn’t execute (or didn’t focu…

Walmart has been a tech company since the 80s. The way Walmart got so big is that the created a literal network between stores so they could do logistics at scale. They had the largest database at the time.

Walmart is still the largest company in the world by revenue, with Amazon at its heels, with Amazon's profit beating out Walmart's.

A lot of this thread, I think, is just fantasy land that Amazon is somehow:

1. Destroying Walmart and Target in a way they can't compete.

2. Is more tech savvy than Walmart and Target.

C'mon, read the history of Walmart, it's who put technology into retail.

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#179

Post by chii »

cs702 wrote: post #21

This rings true to my ears: > There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble. Thus, effectively, OpenAI is to this decade’s generative-AI revolution what Netscape was to the 1990s’ internet revolution. The revolution is real, but it’s ultimately going to be a commodity technology layer, not the foundation of a defensible proprietary moat. In 1995 investors mistakenly…

> OpenAI has a short-ish window of opportunity to figure out how to build a moat.

and they are probably going to go with regulatory moat over technical moat.

Re: OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’

#180

Post by chii »

bruce511 wrote: post #136
cs702 wrote: post #21

This rings true to my ears: > There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble. Thus, effectively, OpenAI is to this decade’s generative-AI revolution what Netscape was to the 1990s’ internet revolution. The revolution is real, but it’s ultimately going to be a commodity technology layer, not the foundation of a defensible proprietary moat. In 1995 investors mistakenly…

There is no technical moat, but that doesn't mean there isn't a moat. Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was. There's no technical moat around online sales. And lots of companies sell online. But Amazon is still the biggest (by a long long way) (at least in the…

> Their "moat" is in public minds here.

no, the amazon moat is scale, and efficiency, which leads to network effect. The chinese competitors are reaching similar scales, so the moat isn't insurmountable - just not for the average mom and dad business.

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