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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’

#271

Post by yodsanklai »

eden-u4 wrote: post #248
ahel wrote: post #242

Why Meta decided to open source their Llama architecture and complete models? From a strategic business perspective, I'm trying to puzzle why they would give that up, a competitive advantage (even though it might not be as good as OpenAI product), rather than directly competing with OpenAI. What's the reasoning behind this decision?

meta is large enough (and diversified enough), when OpenAI valuation goes to pennies (because LLM won't solve any real problem, nor they'll remain relevant in the long term and open source alternative are more than enough for most chatbot usecases), they can acquire all the relevant technologies from OpenAI, Anthropic and such. The real question is why google didn't release their models.

> because LLM won't solve any real problem,

LLMs in their current form are very useful tools for many people. Most programmers I know use them daily. I have even friends who aren't tech savvy who paid the subscription to ChatGPT and use it all the time.

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

#272

Post by billylb42 »

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…

Amazon retail is a marketplace with marketplace dynamics which what you are describing. They are connecting buyers and sellers. OpenAI is a SaaS company, can’t compare them.

More interestingly to your thread is how does Craigslist supplant print classifieds, which then is challenged if not supplanted by Facebook Marketplace. Both the incumbents had significantly better marketplace dynamics prior to being overtaken.

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

#273

Post by mring33621 »

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…

Amazon's moat-ish stickiness:

1) Almost the best price, almost all the time

2) Reliably fast delivery

3) Reliably easy returns

4) Prime memberships

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

#274

Post by mring33621 »

mring33621 wrote: post #273
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's moat-ish stickiness: 1) Almost the best price, almost all the time 2) Reliably fast delivery 3) Reliably easy returns 4) Prime memberships

To follow on, I think OpenAI should split into 2:

1) B2B: Reliable, enterprise level AI-AAS

2) B2C: New social network where people and AIs can have fun together

OpenAI has a good brand name RN. Maybe pursuing further breakthroughs isn't in the cards, but they could still be huge with the start that they have.

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

#275

Post by esafak »

cm2187 wrote: post #198
saurik wrote: post #149

Earlier quoted context omitted.

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…

Amazon as in AWS is possibly a better analogy. What AWS sells is mostly commodity. Their moat is the cost of integration. Once a company has developed all its system around AWS, they are locked in, just because of the integration cost of switching. OpenAI only sells a single component, so the lock in is weaker. But once you have a business a company depends on which has been tested and relies on OpenAI, I can see the…

I think any decent company would be using LLMs through an interface, so they can swap out providers, same as any API.

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

#276

Post by rchaud »

mrtksn wrote: post #176
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.

A browser would be worthless to Google without DoubleClick ad network monopoly, which they acquired years before Chrome. Netscape tried to charge for their browser and stopped because Microsoft was giving away Internet Explorer free with every Windows PC.

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

#277

Post by esafak »

stavros wrote: post #262
tw1984 wrote: post #192

Earlier quoted context omitted.

this is probably how OpenAI is going to end up with. there is no clear tech barrier that can't be crossed by competitors. openai came up with all sorts of cool stuff, but almost all of them have seen a peer competitor in just months. the recent release of deepseek v3 is a good example, o1 level model trained under 6 million USD, it pretty much beat openai by a large margin.

Where are you getting that Deepseek is at the level of o1? In my experience, it's not even as good as Claude.

Even v3?

edit: Fair enough. I'm fishing for opinions too.

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

#278

Post by cm2187 »

esafak wrote: post #275
cm2187 wrote: post #198

Earlier quoted context omitted.

Amazon as in AWS is possibly a better analogy. What AWS sells is mostly commodity. Their moat is the cost of integration. Once a company has developed all its system around AWS, they are locked in, just because of the integration cost of switching. OpenAI only sells a single component, so the lock in is weaker. But once you have a business a company depends on which has been tested and relies on OpenAI, I can see the…

I think any decent company would be using LLMs through an interface, so they can swap out providers, same as any API.

That's fair, but different LLM behave differently, so you would have to redo your testing from scratch if you were to swap the model. I think that would be the primary problem.

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

#279

Post by jsjohnst »

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…

> 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.

Apparently old enough to forget the details. I highly recommend refreshing your memory on the topic so you don’t sound so foolish.

1. Amazon had a very minimal amount of VC funding (less than $100M, pretty sure less than $10M)

2. They IPO’d in 1997 and that still brought in less than $100M to them.

3. They intentionally kept the company at near profitability, instead deciding to invest it into growth for the first 4-5yrs as a public company. It’s not that they were literally burning money like Uber.

4. As further proof they could’ve been profitable sooner if they wanted, they intentionally showed a profit in ~2001 following the dotcom crash.

Edit: seems the only VC investment pre-IPO was KP’s $8M. Combine that with the seed round they raised from individual investors and that comes in under $10M like I remembered.

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