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How will OpenAI compete?

ben-evans.com

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Re: How will OpenAI compete?

#21

Post by SXX »

neom wrote: post #8
nsoonhui wrote: post #7

Earlier quoted context omitted.

it seem they are making good progress on their huawei ascend chips This is interesting to me. I thought that the reason for deepseek delay was because of the insistence ( by the politicians) to use huawei chip[0]. But that was last year August. Anything changes in between? [0]: https://www.reuters.com/world/china/deepseeks-launch-new-ai-...

GLM-5 was trained entirely^ on Huawei Ascend chips. https://z.ai/blog/glm-5 / https://tech.yahoo.com/ai/articles/chinas-ai-startup-zhipu-r... (^edit, I don't know for certain entirely is accurate - edit again, found a chinese source saying their image model is end to end ascend, or at least, domestic: https://zhuanlan.zhihu.com/p/1994775762516080044 & https://www.guancha.cn/economy/2026_02_12_806895.shtml )

And evdn this information might be not very reliable because both US and China government wouldnt be happy about fact that some models might happen to be trained on some "shadow datacenter" full of Nvidia GPUs.

Re: How will OpenAI compete?

#22

Post by johnfn »

dijksterhuis wrote: post #15
johnfn wrote: post #9

This article is significantly better written than most anti-OpenAI/AI articles, and for that I am really grateful. I am generally an AI booster (lol), so I am happy to read well-considered thought pieces from people who disagree with me. That being said... > The one place where OpenAI does have a clear lead today is in the user base: it has 8-900m users. The trouble is, there’re only ‘weekly active’ users: the vast m…

> What percentage of Meta's users are paying? Google's? The advertiser based business model for those companies makes your question/thought process here problematic for me. Historically speaking Google and "Meta" (Facebook) were primarily advertising provider companies. They provided billboards (space and time on the web page in front of an end-user) to people who were willing to buy tht space and time on the billboa…

Yes -- but both Google and Meta didn't start off as an advertising company - they started off providing a service a lot of people liked, and then eventually added ads to it. My assumption (somewhat implicit, admittedly) is that there's no reason OpenAI couldn't do the same. I can understand why that might be controversial, though.

But honestly, if OpenAI can't figure out ads given all their data and ability, they deserve to fail. :P

Re: How will OpenAI compete?

#23

Post by rafaelmn »

I keep hearing about how the app integrations will be where the AI value is and then I see the actual app integrations and they are between useless and mildly helpful.

From what I can see Anthropic's big bet is that they will solve computer use and be able to act as an autonomous agent. Not so sure how fast they will progress on that. OpenAI on the other hand - I have no idea what they are planning - all I'm reading is AI porn and ads.

Google seems to be lackluster at executing with Gemini but they are in the best position to win this whole thing - they have so much data (index of the web, youtube, maps) and so many ways to capitalize on the models - it's honestly shocking how bad they are at creating/monetizing AI products.

Re: How will OpenAI compete?

#24

Post by theptip »

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 distillation. If labs close their models the gap will widen. Once vertical integration kicks off, the distillation cost becomes higher, and the benefit of opening up generic APIs becomes lower.

I can imagine worlds where things don’t turn out this way, but I think folks are generally underrating the possibilities here.

Re: How will OpenAI compete?

#25

Post by chipgap98 »

wombatpm wrote: post #20
gradus_ad wrote: post #14

These very valid points apply to all companies trying to make money off of proprietary models, which means margins are going to collapse in a vicious price war that will make Uber vs Lyft seem tame. As margins collapse capex will collapse. Unfortunately valuations have become so tied to AI hype any reduction in capex will signal maybe the hype has gotten ahead of itself, meaning valuations have gotten ahead of themse…

Couple of observations: Companies use to hoard talent. Now they are hoarding compute, RAM, and GPUs. Deepseek showed that there are possibly less expensive ways to train, meaning the future eye watering expenses may not happen. Bigger models may not scale. The future may be federations of smaller expert models. Chat GPTX doesn’t need to know everything about mental health, it just needs to recognize the the Sigmund v…

Deepseek showed that distillation is possible. Their results are possible without someone else doing the leading edge training

Re: How will OpenAI compete?

#27

Post by deepfriedbits »

com2kid wrote: post #17

Sometimes I like to imagine what this would be like if the technology had appeared 25 years ago. First off, nonetheless open publishing stuff. Everything would have been trade secrets. Next off no interoperable json apis instead binary APIs that are hard to integrate with and therefore sticky. Once you spent 3 or 4 months getting your MCP server setup, no way would you ever try to change to a different vendor! The nu…

Could they have even trained the models 25 years ago? Wikipedia was nothing close to what it is today and I know folks here like to mourn the fall of the open web, but it's still orders of magnitude larger today than it was in 2001. YouTube, so many information stores that simply didn't exist then.

Re: How will OpenAI compete?

#28

Post by d--b »

Worth noting that it’s not a winner-takes all situation. There’s definitely space for differentiation.

Anthropic is in favor with developers and generally tech people, while OpenAi / Gemini are more commonly used by regular folks. And Grok, well, you know…

We have yet to see who’s winning in the “creative space”, probably OpenAI.

As these positionings cristallize, each company is likely going to double down on their user’s communities, like Apple did when specifically targeting creative/artsy people, instead of cranking general models that aren’t significantly better at anything.

Re: How will OpenAI compete?

#29

Post by shubhamjain »

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 that it would be hard to get majority of these free users to pay for anything, and hence, advertising seems a good bet. You couldn't have thought of a more contextual way of plugging in a paid product.

I think OpenAI has better chance to winning on the consumer side than everyone else. Of course, would that much up against hundreds of billions of dollars in capex remains to be seen.

Re: How will OpenAI compete?

#30

Post by chipgap98 »

johnfn wrote: post #22
dijksterhuis wrote: post #15

Earlier quoted context omitted.

> What percentage of Meta's users are paying? Google's? The advertiser based business model for those companies makes your question/thought process here problematic for me. Historically speaking Google and "Meta" (Facebook) were primarily advertising provider companies. They provided billboards (space and time on the web page in front of an end-user) to people who were willing to buy tht space and time on the billboa…

Yes -- but both Google and Meta didn't start off as an advertising company - they started off providing a service a lot of people liked, and then eventually added ads to it. My assumption (somewhat implicit, admittedly) is that there's no reason OpenAI couldn't do the same. I can understand why that might be controversial, though. But honestly, if OpenAI can't figure out ads given all their data and ability, they des…

But OpenAI has more serious competition than those others did when they were coming up. That puts pressure on them to figure out ads and they dragged their feet getting started
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