AI companies are pivoting from creating gods to building products
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Re: AI companies are pivoting from creating gods to building products
#2[flagged]
Re: AI companies are pivoting from creating gods to building products
#3[flagged]
> Imagine not understanding that their main way of doing money is through their API for other companies, and not through a product. They are focused on doing something they are good: good AI models, they let other companies take the risk to build product on top of it, and reap benefits from theses products.
There is no moat in an API-gated foundation model. One LLM is as good as any other, and it'll be a race to the bottom.
The only way to mint a new FAANG is to build a platform that captivates and ensnares the populace, like iPhone or Instagram.
The value in AI will be accrued at the product layer, not the ML infra tooling, not the foundation model. The product layer.
It might be too late to do this with LLMs and voice assistants, though. OpenAI is super distracted, and there's plenty of time for Google, Meta, and Apple to come in and fill the void.
Everyone was too busy selling the creation of gods, or spreading FOMO to elevate themselves to lofty valuations. At the end of the day, business still looks the same as it always has: create value for customers, ideally in a big market where you can own a large slice. LLMs and foundation models are fungible and easy.
Re: AI companies are pivoting from creating gods to building products
#4[flagged]
Re: AI companies are pivoting from creating gods to building products
#5[flagged]
Their numbers aren't public, but I'm not 100% certain that they're making significantly more money through the API than they are through paid subscribers to their products.
They have a LOT of paid subscribers, and they're signing big "enterprise" deals with companies that have thousands of seats.
Re: AI companies are pivoting from creating gods to building products
#6[flagged]
Their numbers aren't public, but I'm not 100% certain that they're making significantly more money through the API than they are through paid subscribers to their products. They have a LOT of paid subscribers, and they're signing big "enterprise" deals with companies that have thousands of seats.
Of course, you need to have companies that build product on top of it, that takes times.
So I would not be surprised if in the first few years, subscription will earn more than API usage.
But on the long term, if OpenAI stay as the top AI model, they will earn massive money through API calls.
Re: AI companies are pivoting from creating gods to building products
#7[flagged]
Meanwhile Amazon will host Llama and other models in AWS (which you are already using) at reasonable rates.
Re: AI companies are pivoting from creating gods to building products
#8[flagged]
Their numbers aren't public, but I'm not 100% certain that they're making significantly more money through the API than they are through paid subscribers to their products. They have a LOT of paid subscribers, and they're signing big "enterprise" deals with companies that have thousands of seats.
I believe I read somewhere that it’s estimated only ~20% of their revenue is via the API.
Found a similar source[0] saying 15% estimated from API use.
[0] https://www.notoriousplg.ai/p/notorious-openais-revenue-brea...
Re: AI companies are pivoting from creating gods to building products
#9[flagged]
> Imagine not understanding that their main way of doing money is through their API for other companies, and not through a product. They are focused on doing something they are good: good AI models, they let other companies take the risk to build product on top of it, and reap benefits from theses products. There is no moat in an API-gated foundation model. One LLM is as good as any other, and it'll be a race to the…
> LLMs and foundation models are fungible and easy.
The top couple LLMs are extraordinarily expensive - will get dramatically more expensive yet - and are one of the most challenging products that have been created in all of human history.
If what you're claiming were true, it wouldn't cost so much for Meta and OpenAI to do their models, and it wouldn't take trillion dollar corporations as sponsors to make it all work.
> One LLM is as good as any other, and it'll be a race to the bottom.
Very clearly not correct. There will be very few top tier LLMs due to the extreme cost involved and the pulling up of the ladders regarding training data. This same effect has helped shield Google and YouTube from competition.
> There is no moat in an API or foundation model.
Do you have a billion dollars? No? Then you can't keep up over the next decade. Soon that won't even get you into the party. Say hello to an exceptional moat.
Re: AI companies are pivoting from creating gods to building products
#10[flagged]
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