3 ms·
OpenAI haven't invented anything with a "competitive moat" right? They've created a product which uses ideas and data that are largely available to everyone. I
by mjburgess 4y ago
OpenAI haven't invented anything with a "competitive moat" right?
They've created a product which uses ideas and data that are largely available to everyone. It's not a pharmaceutical-drug type invention.
If they hadnt been bought my MS, their revenues were going to be in the $20/mo subscriptions. And you'd quickly find a lot of people offering $5/mo for 80% of the quality which would be "just fine" for many cases. (Eg., consider copilot).
The valuation of OpenAI is because it was clear a player like MS would buy it, since the marginal economic value of that technology is to a large incumbent who can quickly deploy it "in the places it's needed". It's that ability to deliver "when needed" which enables MS to draw value from it: ie., MS is just capitalising on it's current position with customers.
The AI bit is actually providing a trivial amount of profit over-and-above MS's existing position with customers.
- verbify 4y agoIsn't there a pretty big cost in training these LLMs?
- mjburgess 4y agoOne that prevents you from competing, but not most larger tech companies. If you think if it like any other product, the picture is clearer. A startup invents a widget whose production costs are somewhat high, but there's no patents/etc. So all major players could invent their own. Where's the value? Just in the sale to a major player.
- verbify 4y agoI hear you. What do you think of the time/expertise/tooling it takes to train these models (and that's it's an iterative process and openai has a significant head start). This strikes me as more than a 'first to the gate' advantage (but perhaps less than a traditional moat).