281–290 of 322 posts
Google and Microsoft are pushing AI extremely heavily but they have other sources of revenue, whereas ChatGPT only has partnerships and subscribers. Are they profiting from their 200 USD tier? Because it seems quite obvious to me they are just bearing the brunt of free users by being loss leaders at the moment.
I have no doubt many of these companies will go bankrupt, but I wonder who will be first. Google and Microsoft are pushing AI extremely heavily but they have other sources of revenue, whereas ChatGPT only has partnerships and subscribers. Are they profiting from their 200 USD tier? Because it seems quite obvious to me they are just bearing the brunt of free users by being loss leaders at the moment.
I have no doubt many of these companies will go bankrupt, but I wonder who will be first.
It's interesting that Amazon don't appear interested in acquiring Anthropic, which would have seemed like somewhat of a natural fit given that they are already partnered, Anthropic have apparently optimized (or at least adapted) for Trainium, and Amazon don't have their own frontier model. It seems that Amazon are playing this much like Microsoft - seeing themselves are more of a cloud provider, happy to serve anyone…
Bezos is playing it smart: sell shovels to all of the gold diggers. If he partners with one of the gold diggers he won't be able to sell shovels to the remainder.
A few gold diggers will be worth 10x the shovel maker.
Earlier quoted context omitted.
What was the moat in search?
Google had PageRank, which gave them much better quality results (and they got users to stick with them by offering lots of free services (like gmail) that were better quality than existing paid services). The difference was night and day compared to the best other search engines at the time (WebCrawler was my goto, then sometimes AltaVista). The quality difference between "foundation" models is nil. Even the huge mo…
That was the differentiation. What makes you think AI companies can't find moats similar to Google's? The right UX, the right model and a winner can race past everyone.
Earlier quoted context omitted.
But there's no moat around these models, they're all interchangeable and leapfrogging each other at a decent pace. Gemini could get much better tomorrow and their entire customer base could switch without issue.
And, if your revenue is $1B but your costs are $2B it only lasts until the music stops....
If claude code's revenue grows faster than cost, it will become profitable.
It's interesting that Amazon don't appear interested in acquiring Anthropic, which would have seemed like somewhat of a natural fit given that they are already partnered, Anthropic have apparently optimized (or at least adapted) for Trainium, and Amazon don't have their own frontier model. It seems that Amazon are playing this much like Microsoft - seeing themselves are more of a cloud provider, happy to serve anyone…
I get the feeling Amazon wants to be the shovel seller for the AI rush than be a frontier model lab. There is no moat in being a frontier model developer. A week, month, or a year later there will be a open source alternative which is about 95% as good for most tasks people care about.
I get the feeling Amazon wants to be the shovel seller for the AI rush than be a frontier model lab.
The shovel maker will never make more money than a few lucky gold diggers.
Earlier quoted context omitted.
Haven't they invested hundreds of millions trying to train frontier models?
I don't know how much they are spending to be fair. I am basing my observation on the noises they are making. They did put out a model called Nova but they are not drumming it up at all. The model page makes no claims of benchmarks or performance. There are no signs of them poaching talent. Their CEO has not been in the press singing praises about AI unlike every big tech CEO. Maybe they have a skunk-works team on it…
I have no doubt many of these companies will go bankrupt, but I wonder who will be first. Google and Microsoft are pushing AI extremely heavily but they have other sources of revenue, whereas ChatGPT only has partnerships and subscribers. Are they profiting from their 200 USD tier? Because it seems quite obvious to me they are just bearing the brunt of free users by being loss leaders at the moment.
I have no doubt many of these companies will go bankrupt, but I wonder who will be first. All companies go bankrupt given enough time.
It's interesting that Amazon don't appear interested in acquiring Anthropic, which would have seemed like somewhat of a natural fit given that they are already partnered, Anthropic have apparently optimized (or at least adapted) for Trainium, and Amazon don't have their own frontier model. It seems that Amazon are playing this much like Microsoft - seeing themselves are more of a cloud provider, happy to serve anyone…
I think they’re waiting for bargain bin deals once the bubble collapses.