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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’

#41

Post by ninth_ant »

neals wrote: post #34
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…

I get the moat idea. But are there really any moats? What's a good moat these days anyway? Isn't being first and "really good" fine as well?

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 proliferation of fake reviews and products. Netflix thrives even while cutting back sharply on product quality. Valve has a near-stranglehold on PC games distribution despite their tech stack being trivially replicable. The list goes on.

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

#42

Post by AnimalMuppet »

mvdtnz wrote: post #36
robertlagrant wrote: post #15

This doesn't seem to say much to back its comparisons. Wouldn't spending a giant amount of money create some sort of moat?

From what I'm reading of the industry, no not really. The laughably huge investments seem to buy OpenAI approximately a 6 month head start over open source models, which is not much.

Depends. If they manage to actually find a way to create an AGI, then a six month head start might be massive at that point. Until then... not so much.

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

#43

Post by wmf »

toddmorey wrote: post #40
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…

Genuinely curious if anyone has ideas how an LLM provider could moat AI. They feel interchangeable like bandwidth providers and seem like it will be a never ending game of leapfrog. I thought perhaps we’d end up with a small set of few top players just based on the scale of investment but now I’ve also seen impressive gains from much smaller companies & models, too.

You'd have to have either a breakthrough algorithm (that you keep secret forever) or proprietary training data.

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

#44

Post by [deleted] »

toddmorey wrote: post #40
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…

Genuinely curious if anyone has ideas how an LLM provider could moat AI. They feel interchangeable like bandwidth providers and seem like it will be a never ending game of leapfrog. I thought perhaps we’d end up with a small set of few top players just based on the scale of investment but now I’ve also seen impressive gains from much smaller companies & models, too.

[deleted]

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

#45

Post by wmf »

lesuorac wrote: post #33
patrickhogan1 wrote: post #20

I agree that at its current rate of $20 per month and continuous cash burn, OpenAI’s model doesn’t seem sustainable. But the same could have been said about Google in its early days. Back then, Google spent heavily to index websites without a clear path to profitability—until it figured out how to monetize. Similarly, OpenAI will likely release more products to generate revenue. OpenAI has the potential to create the…

> Back then, Google spent heavily to index websites without a clear path to profitability [citation needed] Google's goal was always advertising just like every other search engine.

Google didn't have ads until 2000. They strongly resisted banner ads (which were the only format at the time) until they invented contextual text ads.

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

#46

Post by trhway »

kridsdale1 wrote: post #37
neals wrote: post #34

Earlier quoted context omitted.

I get the moat idea. But are there really any moats? What's a good moat these days anyway? Isn't being first and "really good" fine as well?

Network effects are a moat. A vertically integrated system that people depend on with non-portable integrations is a moat. Regulatory Capture is a moat.

What is the moat of the Google Search? To me the LLM is the first and the only disruptor so far of the Search.

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

#47

Post by ijustlovemath »

bravura wrote: post #35

People keep saying stuff like this, but I don't believe it: "There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble." AI progress is driven by strong valuable data. Detailed important conversation with a chatbot are much more valuable that quick search queries. As LLMs extend past web UIs, there is even more interaction data to capture and learn from. The company that capture…

What do you think they've been building these multimodal models with? If I had Google application logs from the past few decades I would absolutely be transforming it and loading into my training dataset. I would not be surprised if Google/Meta/Msft are not doing this already

When the big companies say they're running out of data, I think they mean it literally. They have hoovered up everything external and internal and are now facing the overwhelming mediocrity that synthetic data provides.

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

#48

Post by scarmig »

toddmorey wrote: post #40
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…

Genuinely curious if anyone has ideas how an LLM provider could moat AI. They feel interchangeable like bandwidth providers and seem like it will be a never ending game of leapfrog. I thought perhaps we’d end up with a small set of few top players just based on the scale of investment but now I’ve also seen impressive gains from much smaller companies & models, too.

1) Push for regulations around data provenance. If you train on anything, you have to prove that you had the rights to train on it. This would kill all but the largest providers in the USA, though China would still pose a problem. You could work around that bit by making businesses and consumers liable for usage of models that don't have proof of provenance.

2) If you had some secret algorithm that substantially outperformed everyone, you could win if you prevented leakage. This runs into the issue that two people can keep a secret, but three cannot. Eventually it'll leak.

3) Keep costs exceptionally low, sell at cost (or for free), and flood the market with that, which you use to enhance other revenue streams and make it unprofitable for other companies to compete and unappealing as a target for investors. To do this, you have to be a large company with existing revenue streams, highly efficient infrastructure, piles of money to burn while competitors burn through their smaller piles of money, and the ability to get something of value from giving something out for free.

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

#49

Post by lolinder »

toddmorey wrote: post #40
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…

Genuinely curious if anyone has ideas how an LLM provider could moat AI. They feel interchangeable like bandwidth providers and seem like it will be a never ending game of leapfrog. I thought perhaps we’d end up with a small set of few top players just based on the scale of investment but now I’ve also seen impressive gains from much smaller companies & models, too.

Regulatory capture. Persuade governments that AI is so dangerous that it must be regulated, then help write those regulations to ensure no one else can follow you to the ladder.

That's half the point of OpenAI's game of pretending each new thing they make is too dangerous to release. It's half directed at investors to build hype, half at government officials to build fear.

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

#50

Post by skydhash »

ninth_ant wrote: post #41
neals wrote: post #34

Earlier quoted context omitted.

I get the moat idea. But are there really any moats? What's a good moat these days anyway? Isn't being first and "really good" fine as well?

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…

Almost all of these are either free or a marketplace (which is free to access). Only Windows is technically not free, but it comes free with the hardware you buy. And they came at a time when there was not a real competition. It's very hard to beat a free product.
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