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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’

#211

Post by mnky9800n »

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…

Perplexity costs less and lets you use more models.

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

#212

Post by jay_kyburz »

nemomarx wrote: post #72
ninth_ant wrote: post #41

Earlier quoted context omitted.

The Network effect, and cultural mind share are two pretty effective moats. Meta and X proven surprisingly resilient in the face of pretty overwhelming negative sentiment. Google maintains monopoly status on Web Search and in Browsers despite not being remarkably better than competition. Microsoft remains overwhelmingly dominant in the OS market despite having a deeply flawed product. Amazon sells well despite a prol…

To be fair despite Valve's tech stack being easy to replicate, their actual competition mostly hasn't replicated their feature set in full? Epic took a while to ramp up to "shopping carts" despite having a pretty large funding model, still doesn't have little gimmicks like trading cards and chat stickers, w/e. That's not really moat but it seems like the competition doesn't want to invest to exact parity. (And a lot…

Yeah, on face value, Epic looks like they want to compete with Steam, but the developers of the Epic Game store are really phoning it in.

They have had years and still not even close, from both the consumer side and the developer side.

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

#213

Post by noch »

swiftcoder wrote: post #201
noch wrote: post #167

Earlier quoted context omitted.

> There is no technical moat, but that doesn't mean there isn't a moat. Gruber writes: " My take on OpenAI is that both of the following are true: OpenAI currently offers, by far, the best product experience of any AI chatbot assistant. There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble. " It's amusing to me that he seems to think that OpenAI (or xAI or DeepSeek or DeepMi…

> How much would you invest for a given probability that the company you invest in will be able to manufacture intelligence at scale in 10 years? What's the expected return on investment for "intelligence"? This is extremely hard to quantify, and if you listen to the AI-doomer folks, potentially an extremely negative return.

> What's the expected return on investment for "intelligence"? This is extremely hard to quantify […] if you listen to the AI-doomer folks, potentially an extremely negative return.

Indeed. And that asymmetry is what makes a market: people who can more accurately quantify the value or risk of stuff are the ones who win.

If it were easy then we'd all invest in the nearest AI startup or short the entire market and 100x our net worth essentially overnight.

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

#214

Post by benterix »

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…

It is not a good analogy because services like Facebook, Amazon, Instagram depend on a critical mass of users (sellers, content sharers, creators, etc.). With SaaS this is not a crucial component as the service is generated by software, not other users.

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

#215

Post by hebrox »

andrewstuart wrote: post #168

>> OpenAI currently offers, by far, the best product experience of any AI chatbot assistant. Claude is noticeably better

And using Claude with Cline, partially because of prompt caching, it's noticeably cheaper as well.

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

#216

Post by benterix »

Frankly, OpenAI efforts seem quite funny for me personally as for most tasks I do Claude is far superior and yet OpenAI behaves as if they were the only game in town.

The so-called open source models are getting better and better and even if OpenAI suddenly discovered some new tech that would allow for another breakthrough, it will be immediately picked up by others.

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

#217

Post by florakel »

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…

Why is everyone so sure that technology can’t be the moat? Why are you convinced that all AI systems will be very similar in performance and cost, hence be interchangeable? Isn’t Google the perfect example that you can create a moat by technological leadership in a nascent space? When Google came along it was 10X better than any alternative and they grabbed the whole market. Now their brand and market position make it almost impossible to compete. I guess the bet is that one of the AI companies achieves a huge breakthrough and a 10X value creation compared to its competitors…

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

#218

Post by BeefWellington »

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.

See the scramble to make themselves arbiters of "good AI" with regulators around the world. It's their only real hope but I think the cat's already out of the bag.

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

#219

Post by fmap »

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…

Adding to this, inference is getting cheaper and more efficient all the time. The investment bubble is probably the biggest reason why inference hardware is so expensive at the moment and why startups in this sector are only targeting large scale applications.

Once this bubble bursts, local inference will become even more affordable than it already is. There is no way that there will be a moat around running models as a service.

---

Similarly, there probably won't be a "data moat". The whole point of large foundation models is that they are great priors. You need relatively few examples to fine tune an LLM or diffusion model to get it to do what you want. So long as someone releases up to date foundation models there is no moat here either.

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

#220

Post by amelius »

florakel wrote: post #217
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…

Why is everyone so sure that technology can’t be the moat? Why are you convinced that all AI systems will be very similar in performance and cost, hence be interchangeable? Isn’t Google the perfect example that you can create a moat by technological leadership in a nascent space? When Google came along it was 10X better than any alternative and they grabbed the whole market. Now their brand and market position make i…

Maybe because for 99.9% of users (usecases) what today's llm technology offers is already good enough?

Or maybe nvidia has the moat. Or silicon fabs have it.

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