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How will OpenAI compete?

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Re: How will OpenAI compete?

#181

Post by theptip »

gck1 wrote: post #172
theptip wrote: post #24

I think this take underestimates a couple points: 1) the opportunities for vertical integration are huge. Anthropic originally said they didn’t want to build IDEs, then realized the pivot to Claude Code was available to them. Likewise when one of these companies can gobble up Legal, Medical, etc why would they let companies like Harvey capture the margins? 2) oss models are 6-12 months behind the frontier because of…

If OSS models are 6-12 months behind, it means sometime during 2026, we'll see a model that is on par with the likes of GPT 5.2/Opus 4.5. For code generation specifically, the performance level of this is going to be more than enough for this customer base. What does Anthropic do then to justify $200/mo price sticker? Better model? Just how much better? Better tools? Single company can't compete with the tools entire…

If capabilities stop increasing for some reason, then yeah, Anthropic is screwed.

If METR task times double twice into the multi-day range in 12 months, then it’s plausible to me that Anthropic can charge $1k/mo or more by automating large chunks of the SWE role. (They have 10x’d their revenue every year, perhaps “value of enterprise contracts” is a better way of intuiting their growth rather than “$/seat” since each seat gets way more productive in this world-branch.)

Re: How will OpenAI compete?

#182

Post by kristianc »

protocolture wrote: post #99
shubhamjain wrote: post #29

Everyone is actually underestimating stickiness. The near billion users OpenAI has is actually a real moat and might translate into decent chunk of revenue. My wife, for example, uses ChatGPT on a daily basis, but has found no reason to try anything else. There are no network effects for sure, but people have hundreds and thousands on conversation on these apps that can't be easily moved elsewhere. Understandable tha…

> The near billion users OpenAI has is actually a real moat and might translate into decent chunk of revenue. People used to suggest this about MySpace.

MySpace never had close to a billion users.

Re: How will OpenAI compete?

#183

Post by mattnewton »

bandrami wrote: post #178
daxfohl wrote: post #130

I just wonder how long it'll take local models to be good enough for 99% of use cases. It seems like it has to happen sooner or later. My hunch is that in five years we'll look back and see current OpenAI as something like a 1970's VAX system. Once PCs could do most of what they could, nobody wanted a VAX anymore. I have a hard time imagining that all the big players today will survive that shift. (And if that partic…

Yesterday I asked mistral to list five mammals that don't have "e" in their name. Number three was "otter" and number five was "camel". phi4-mini-reasoning took the same prompt and bailed out because (at least according to its trace) it interpreted it as meaning "can't have a, e, i, o, or u in the name". Local is the only inference paradigm I'm interested in, but these things have a way to go.

Models will always struggle with this specific task without tool use, because of the way they tokenize things. I think a bit of prompt engineering, asking it to spell out each work or giving it the ability to run a “contains e” python function on a lot of animal names it generates or searches for solves this.

Lots of local ai use cases I think are solvable similarly once local models get good at tool use and have the proper harness.

Re: How will OpenAI compete?

#184

Post by brookst »

kortilla wrote: post #157
brookst wrote: post #149

Earlier quoted context omitted.

Just like it would take 10 seconds to buy her a Pepsi instead of her preferred Coke. Would you?

No, because that’s a product you buy for flavor and Pepsi is a different flavor.

UI style and response tone aren’t flavors?

Re: How will OpenAI compete?

#185

Post by theptip »

arctic-true wrote: post #46
theptip wrote: post #24

I think this take underestimates a couple points: 1) the opportunities for vertical integration are huge. Anthropic originally said they didn’t want to build IDEs, then realized the pivot to Claude Code was available to them. Likewise when one of these companies can gobble up Legal, Medical, etc why would they let companies like Harvey capture the margins? 2) oss models are 6-12 months behind the frontier because of…

To go vertical they’d need to illustrate the value-add, a problem that the vertical competitors already have. Why use Claude for Accountants at $300/month when regular Claude will do the same thing for much less? The stock answer is that Claude for Accountants keeps your data more secure and doesn’t train on it. But a) I think the enterprise consumer is much less likely to trust a model creator not to stick its hand…

The point is that in this hypothetical you can get public access to Claude Opus 6, but they internally use Claude Opus 7 (Accounting Finetune) which is both cheaper to operate and higher IQ.

So they (or their wholly owned subsidiary) can sell accounting services cheaper than anyone on the outside.

Regarding the diffusion/distillation time, I assume it gets harder to distill in the world where frontier labs don’t give API access to their newest models.

Re: How will OpenAI compete?

#187

Post by fhd2 »

tikotus wrote: post #180
shubhamjain wrote: post #29

Everyone is actually underestimating stickiness. The near billion users OpenAI has is actually a real moat and might translate into decent chunk of revenue. My wife, for example, uses ChatGPT on a daily basis, but has found no reason to try anything else. There are no network effects for sure, but people have hundreds and thousands on conversation on these apps that can't be easily moved elsewhere. Understandable tha…

I hear the claim that people already have their conversation on ChatGPT and can't move them. I'm curious, what are these discussions like? I've never continued an old discussion, I just start a new one every time I have a question. If the discussion is long, I often start a new chat to get a blank slate. My experience is that the chat history just causes confusion. So I'm curious to understand: What are the discussio…

In my experience non-technical folks quite dig the memory feature. For me that's kinda context poisoning as a service, but I know people that get value out of it (or at least strongly feel they do). Not sure how one would migrate that.

Re: How will OpenAI compete?

#188

Post by hrmtst93837 »

danpalmer wrote: post #5
neom wrote: post #4

Not many folks talking about this: https://www.tomshardware.com/tech-industry/artificial-intell... The WH has said it hasn't approved any sales, but it's not clear China is buying, and it seem they are making good progress on their huawei ascend chips. If China is basiclly at parity on the full stack (silicon, framework, training, model), and it starts open weighting frontier models at $0.xx/M tokens, then yeah, moat…

Not surprising, Nvidia's margin was just a huge incentive for companies/countries to develop their own solutions. You don't have to be 100% as good if you're 80% cheaper. It's unsurprising that this is being driven by Chinese companies/labs who often have a lot less funding than the US, and the big tech companies (Google, Microsoft, Amazon) who will benefit the most from having their own compute. I've never believed…

[flagged]

Re: How will OpenAI compete?

#189

Post by UltraSane »

pllbnk wrote: post #179
shubhamjain wrote: post #29

Everyone is actually underestimating stickiness. The near billion users OpenAI has is actually a real moat and might translate into decent chunk of revenue. My wife, for example, uses ChatGPT on a daily basis, but has found no reason to try anything else. There are no network effects for sure, but people have hundreds and thousands on conversation on these apps that can't be easily moved elsewhere. Understandable tha…

ChatGPT has a good name. It's weird and awkward but it still rolls off the tongue. And I am saying that as a non native English speaker because the name has been migrated to other languages with the English pronunciation. In comparison, Claude's name is very bad, it just doesn't sound right and people might mishear me when I say it. I never say "Claude" when talking to other, especially non-technical people, and inst…

Claude is a terrible name but Gemini is pretty good.

Re: How will OpenAI compete?

#190

Post by nojs »

> There is no equivalent of the network effects seen at everything from Windows to Google Search to iOS to Instagram, where market share was self-reinforcing and no amount of money and effort was enough for someone else to to break in or catch up.

What is the network effect of Google Search?

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