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OpenAI is Visa – Buttering up the government to retain a monopoly

sherwood.news

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Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#81

Post by derektank »

reissbaker wrote: post #64
insane_dreamer wrote: post #6

Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Would be helpful to have some concrete examples of what it did and what OpenAI is trying to do. The point of the article sounds plausible, but doesn't really present any evidence to support it. Also OpenAI in no way has a monopoly of the kind that Visa/MC has.

It's written by Taylor Lorenz. I wouldn't expect it to be particularly well-researched; just to have a maximally anti-tech slant.

Yeah, her beat as a journalist has historically been social media[1]. I'm not sure what value she brings to a discussion of market dynamics and lobbying; she doesn't seem to have any sources close to either Congress or OpenAI so this comes across as more of an opinion piece than anything else.

[1] https://www.washingtonpost.com/people/taylor-lorenz/

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#82

Post by pton_xd »

aleph_minus_one wrote: post #73
pton_xd wrote: post #47

Earlier quoted context omitted.

And simply pay 1-2% more than everyone else using a Visa card.

Even if this is potentially true, 1 to 2 % is a very fair price to pay to be independent of their credit card network and paying much more anonymously.

This is Costco, you have a membership tied to your identity which they check every time you enter the store and checkout. Your order history is tied to your membership. There is no "anonymous" purchasing at Costco. They likely share your purchasing decisions with Visa whether you use the card or not.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#83

Post by Spooky23 »

jncfhnb wrote: post #77
ADeerAppeared wrote: post #16

Earlier quoted context omitted.

> Also OpenAI in no way has a monopoly of the kind that Visa/MC has. I think this is misreading how literal the comparison is meant to be; Sherwood's running a bunch of "OpenAI is X" articles today. This is not about the massive duopoly which has been catastrophic for US payments, but about the way companies entrench themselves. > Doesn't explain what regulations Visa pushed for and got which helped it maintain its m…

The duopoly isn’t really as problematic as the concept itself. Credit cards, where customers are bribed to insert a middleman into all transactions and suppliers are largely powerless to refuse it; are a plague. The switching costs of a consumer to a different credit card are small. The switching cost of a business saying they no longer allow certain payment types is potentially very painful.

Credit cards are probably the most consumer friendly innovation ever — a product of the time they were developed. It was an era when the federal government functioned and the credit card operations were so problematic a heavy hand was required.

Every supposedly better alternative adds margin for the supplier, increases the risk of fraud, and leaves the user with poor recourse due to the lack govnerment regulation.

Adding a 3% overhead is cheap for the value. Let the suppliers be squeezed - it’s tiny for big merchants and the little ones are bitching because they’d rather lose sales than pay taxes.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#84

Post by derektank »

doctorpangloss wrote: post #35
nottorp wrote: post #33

Earlier quoted context omitted.

> Also OpenAI in no way has a monopoly of the kind that Visa/MC has. They've been working very hard on getting one for at least a year though. Every time Altman whines about the dangers of AI, he's lobbying for government regulation that would raise barriers to entry into the market. And please no, god forbid there are any free solutions. Let's drown them in regulation worth a few hundred million per year.

All he’d have to do is get interest rates to rise 25bps and then poof, his competitors would evaporate.

I think Google has deeper pockets than OAI. The only competition I can see getting priced out by higher interest rates is Anthropic

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#85

Post by jopsen »

Lol, visa had network effect.

It also took a long time to build up such a network.

Replacing all payment terminals is not easy. And as a customer I'm more likely to care of my card works and not care if I'm charged x% fee.

The visa trick if any, was hiding the credit card fee and pushing it to merchants. Whether its a trick or not is hard to tell, for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#86

Post by lazyeye »

Marc Andreessen talked a little bit about this in his recent interview with Joe Rogan (Joe Rogan! I know....).

https://www.youtube.com/watch?v=ye8MOfxD5nU

He said the govt is actively discouraging pure AI startups because they want the industry dominated by a small number of large companies which they can more easily control. It's a similar story with the crypto industry. Prepare to be "de-banked" if your AI or Crypto startup is not on the anointed list...

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#88

Post by anon-3988 »

jncfhnb wrote: post #77
ADeerAppeared wrote: post #16

Earlier quoted context omitted.

> Also OpenAI in no way has a monopoly of the kind that Visa/MC has. I think this is misreading how literal the comparison is meant to be; Sherwood's running a bunch of "OpenAI is X" articles today. This is not about the massive duopoly which has been catastrophic for US payments, but about the way companies entrench themselves. > Doesn't explain what regulations Visa pushed for and got which helped it maintain its m…

The duopoly isn’t really as problematic as the concept itself. Credit cards, where customers are bribed to insert a middleman into all transactions and suppliers are largely powerless to refuse it; are a plague. The switching costs of a consumer to a different credit card are small. The switching cost of a business saying they no longer allow certain payment types is potentially very painful.

I mean, you could email customer support and mail them cash? Why do you think this middleman is unnecessary? Whats the alternative?

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#90

Post by lxgr »

jopsen wrote: post #85

Lol, visa had network effect. It also took a long time to build up such a network. Replacing all payment terminals is not easy. And as a customer I'm more likely to care of my card works and not care if I'm charged x% fee. The visa trick if any, was hiding the credit card fee and pushing it to merchants. Whether its a trick or not is hard to tell, for small businesses it was probably bad, but for a big business deali…

> I'm more likely to care of my card works and not care if I'm charged x% fee.

Sure, any alternative needs to work on a practical/technical level, be convenient, have fraud protection etc.

But if it does, and a merchant I know and trust (these are fairly big caveats!) were to offer me a discount equivalent to what my card issuing bank pays me in cashback and then some as an incentive for paying using that alternative, why wouldn't I do it?

> Replacing all payment terminals is not easy.

Terminals already support multiple payment networks today, some even non-card based.

> for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap.

It's exactly the other way around. Big chains can strike custom interchange and scheme fee deals with Visa and Mastercard, because they have the credible threat of offering steep discounts on store cards or other "on-us" payment methods; small businesses basically need to accept what they get.

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