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The premise of this is flawed. OpenAI is cheap because of has to be right now. They need to establish market dominance quickly, before competitors slide in. The
by appplication 3y ago
The premise of this is flawed. OpenAI is cheap because of has to be right now. They need to establish market dominance quickly, before competitors slide in. The winner of this horse race is not going to be the company with the best performing AI, it’s going to be the one who does the best job at creating an outstanding UX, ubiquitously presence, entrenching users, and building competitive moats that are not feature differentiated because at best even cutting edge features are only 6-12 months ahead of competition cloning or beating.
This is Uber/AirBnB/Wework/literally every VC subsidized hungry-hungry-hippos market grab all over again. If you’re falling in love because the prices are so low, that is ephemeral at best and is not a moat. Someone try calling an Uber in SF today and tell me how much that costs you and how much worse the experience is vs 2017.
OpenAI is the undisputed future of AI… for timescales 6 months and less. They are still extremely vulnerable to complete disruption and as likely to be the next MySpace as they are Facebook.
- shaburn 3y agoYour Uber/AirBnB/Wework all have physical base units with ascending costs due to inflation and theoretical economies of scale. AI models have some GPU constraints but could easily reach a state where the cost to opperate falls and becomes relatively trivial with almost no lowerbound, for most use cases. You are correct there is a race for marketshare. The crux in this case will be keeping it. Easy come, easy go. Models often make the worst business model.
- blackoil 3y agoThis point is discussed in the article. Title is not for Google/Meta, they'll invest all the billions that they have to. It is for the consumers of these models, is there even a point to train your own or experiment with OSS!
- hendersoon 3y agoSure, open models often require much less hardware than chatGPT3.5 and offer ballpark (and constantly improving) performance and accuracy. ChatGPT3.5 scores 85 in ARC and the huggingface leaderboard is up to 77. If you need chatGPT4-quality responses they aren't close yet, but it'll happen.
- toddmorey 3y agoJust heard Steve today from Builder.io who did an impressive launch of Figma -> code powered by AI. They trained a custom model for this. Better accuracy, sure, but I was a little surprised to watch how much faster it is than GPT4. Based on their testing, they’ve become believers in domain specific smaller models, especially for performance.
- varelse 3y ago[dead]
- phillipcarter 3y agoCodegen is an area that seems to have the best breakout performance compared to the big FMs. In hindsight it should be obvious given that openai created Codex. However, I am skeptical that smaller and more focused models will do well for more general tasks. I’ve found gpt-4 to just be flatly excellent for tasks that involve emitting a custom DSL and customer-provided business context (the latter being something we cannot train for, not without immense expense).
- ldjkfkdsjnv 3y agoCompletely wrong, the best AI will win. There is insane demand for better models.
- datadrivenangel 3y agoThere is insane demand for good enough models at extremely good prices. Better beyond a certain point is unlikely to be competitive with the cheaper models.
- phillipcarter 3y agoYes, this is correct. And OpenAI are currently the best at this.
- oceanplexian 3y agoYep, quality over quantity. The difference between 99.9% accurate and 99.999% accurate can be ridiculously valuable in so many real world applications where people would apply LLMs.
- gbmatt 3y agoOnly Big Tech (Microsoft,Google,Facebook) can crawl the web at scale because they own the major content companies and they severly throttle the competition's crawlers, and sometimes outright block them. I'm not saying it's impossible to get around, but it is certainly very difficult, and you could be thrown in prison for violating the CFAA.
- PaulHoule 3y agoI'm not sure if training on a vast amount of content is really necessary in the sense that linguistic competence and knowledge can probably be separated to some extent. That is, the "ChatGPT" paradigm leads to systems that just confabulate and "makes shit up" and making something radically more accurate means going to something retrieval-based or knowledge graph-based. In that case you might be able to get linguistic competence with a much smaller model that you end up training with a smaller, cleaner, and probably partially synthetic data set.
- mg 3y agoI don't think Uber and AirBnB are good comparisons. Both are B2C and have network effects.
- paul7986 3y agoThe PI iPhone app has a solid UX and even better UX if Apple (bought it) integrated into Siri.
- adam_arthur 3y agoThe winner is going to be the consumers of AI. It's a race to the bottom on pricing on the provider/infra side. It seems very unlikely that any single LLM provider will achieve a sustained and durable advantage enough to achieve large margins on their product. Consumers can swap between providers with relative ease, and there is very little stickiness to these LLM APIs, since the interfaces are general and operate on natural language. Versus something like building out a Salesforce integration and then trying to update that to a competitor. Or migrating from Mongo to DynamoDB. Building the LLMs is where the cool tech lives, but surprised so many are seeing that as a compelling investment opportunity. But, let's see!
- msikora 3y agoYep. I wonder why there is not more features that would differentiate your LLM API, like for example the Functions in OpenAI LLM APIs. While not perfect it is extremely useful and not aware of a similar offering (I do know that there are Python packages offering similar functionality but it is my understanding that they don't work as well as the OpenAI Functions).
- tomrod 3y agoAye, open models from Meta are tearing at the moat.
- user3939382 3y ago> The winner is going to be the consumers Cloud infra may be a comparable market, since computation is a big share of AI costs. Did consumers win big from competition between AWS, Azure, and GCP? Not sure. I see an uptick in write ups saying “We switched off cloud and reduced costs by 2/3rds.” Not a scientific sample but may leave the question open.
- adam_arthur 3y agoMuch harder to switch cloud providers than to switch LLM models. How much time would it take most companies to move their product from AWS to GCP, for example? What if you use a cloud specific tool like DynamoDB? Margin is a function of stickiness/cost of switching (among other things). I suspect eventually we will enter a world where migrating cloud providers is mostly a click of a button, but we're a long ways off from that. Requires vendor agnostic and portable apis/containers/WASM runtimes everywhere. Swapping an LLM, at least in the current state, is about as close to updating a pointer as you can get.
- torginus 3y agoChatGPT integration is a single API call, I don't think they have much of a lock-in right now.
- sberens 3y ago> They are ... as likely to be the next MySpace as they are Facebook. I will happily take a 1:1 bet on them not going the way of MySpace in, say, 5 years!
- outlace 3y agoBut OpenAI appears to have some sort of data moat. I doubt their model is the best in the world, but more/better data generally beats better model, and GPT-4 definitely beats Claude, Bard, Bernie and the rest probably because they curated the best quality and largest data set. Maybe that moat doesn't last long but perhaps they have exclusive rights to some of that dataset through commercial agreements that could be a more durable moat.
- sangnoir 3y ago> But OpenAI appears to have some sort of data moat. I'm willing to bet dollars to doughnuts that Google and Facebook have at least one, possibly 2 or more orders of magnitude more latent training data to work with - not including Googles search index. My uninformed opinion is that Google and Meta's ML efforts are fragmented - with lots of serious effort going into increasing existing revenue streams with LLMs and the like being treated as a hobby or R&D projects. OpenAI is putting all its effort into a handful of projects that go into a product they sell. The dynamic and headcounts will change if the LLM market grows into billions
- CSMastermind 3y ago> My uninformed opinion is that Google and Meta's ML efforts are fragmented - It seems more likely that at Google at least they just fell into the classic innovator's dilemma in which they were stuck trying to apply innovation to their current business models in an attempt at incremental innovation instead of seeking an entirely different customer and market.
- Turing_Machine 3y agoYeah, same with Meta. Both have a large graveyard of failed innovation attempts. Remember Google Buzz? Google Plus?
- Terr_ 3y agoContinuing the litany: https://killedby.tech/google/ https://killedby.tech/google/
- diogenes4 3y ago> They need to establish market dominance quickly It's not clear there's any more of a long-term market for this any more than there is for compilers. I'm kind of scratching my head trying to figure out where this assumption there is one comes from.
- AussieWog93 3y ago>hungry-hungry-hippos market grab That is a beautiful metaphor, seriously.
- paulddraper 3y ago> Someone try calling an Uber in SF today and tell me how much that costs you Yet...what is the biggest U.S. ride share app? Hungry Hippos is true. But it also works.
- noah_buddy 3y agoIt’s a funny point. After only taking Ubers and Lyfts all my adult life (young), I have recently switched to cabs because they are cheaper in my city (and I tell everyone I know to do the same). They have dominance now but if I had to guess whether cabs or Uber will still exist in 100 years… I know which I would bet on.
- xmprt 3y agoCabs are an idea. Uber is a company. I can't think of any company that I'd predict to last 100 years. Even Google and Apple probably won't last 100 years. I honestly wouldn't even bet on cars being a dominant form of transportation in 100 years.
- charlie0 3y agoI think Apple will last 100 years. See their latest AR product. They continue to create amazing products that are relevant to the masses.
- paulddraper 3y agoYou're probably right. But FWIW it's not even to the halfway mark yet.
- jokethrowaway 3y agoI had the opposite impression on AR. A useless gimmick no sane people will use. Apple did good with the M processors though
- charlie0 3y ago
- charlie0 3y agoNot if they pass that sweet sweet regulation. It's sure to start adding additional expenses to start-ups.
- rco8786 3y agoRight exactly. The founder is basically the king of this business model. Should not be a surprise to anyone!
- somsak2 3y agoI use Uber in SF all the time, and while it's absolutely more expensive than it was during those go-go years, it's actually an even better experience than it was before (specifically on how fast it is to get a driver near you).
- Ericson2314 3y agoSilly argument when the Uber cycle has yet to achieve durable profits via monopoly
- SOLAR_FIELDS 3y agoI was kind of curious because I’ve often felt the same about cheap Uber/Lyft rides. So I checked. I initially signed up with Lyft sometime in late 2015. The first airport ride I got from my house in Austin was in December of that year and they billed me $38 base fare and $1.50 airport surcharge. This was before tipping was available in the app as well. I just took Lyft again to the airport earlier this month same location and I was billed $49 USD, and a $1.30 “Texas Surcharge”. An inflation calculator says that $38 usd in 2015 is equivalent to $49 in 2023. Color me surprised. I thought the prices had significantly increased since I signed up but it looks like actually no they didn’t. Trawling back through those old emails I do see constant “50% off all weekday rides” offers from the time I signed up until about March 2016, at which point they stopped. So there were some subsidized incentives when they were early in Austin but it looks like they stopped sometime in early 2016. So if the money train existed, it happened before that, at least in Austin.
- oldbbsnickname 3y agoThis is true. The fields are green and lush with things that don't scale: freemium and low prices to get people hooked. The crack dealers will almost inevitably go full Unity when they are forced by their board of directors to turn a profit.
- sokoloff 3y agoI am about as entrenched to OpenAI as I am to Uber. I like Uber; it’s convenient and fairly reliable. Five milliseconds after Lyft creates a better experience, I can switch.
- tomcam 3y agoHow would a potential competitor obtain an equivalent body of training data?
- visarga 3y agoOpenAI has been the largest unintentional producer of LLM datasets. Everyone is leaching on GPT-4 even though the license says "no, no!".
- NikolaNovak 3y agoPossibly unrealistic, but my fear is that they will end up like Netflix more than uber. Some will scream in horror but I wanted Netflix to be a monopoly. A single place and app and account with all the content I need. "competition" in streaming space has been nothing but disastrous for me as a consumer. It led to greedy heterogeneous islands of content, with proliferation of crappy apps and pointless restrictions and return to cable package mentality. Again, Possibly irrationally and ignorantly, my fear is that 5 years from now I'll need a dozen subscriptions to less good services which will hoard their source data and models and be specialized based on which content they got licenses to. I. E. There'll be ai1 with new York times and Wikipedia, and ai2 with Washington post and encyclopedia Britannica, and ai3 with I don't know fox news and RT, and ai4 with mit and Harvard business libraries, and ai5 focused on math with extra subscription to wolfram, and ai6 with rights to stack overflow and JavaScript and so on. There are many scenarios various writers have posited where we are actually in local maxima lf ll, with data being increasingly closed and or poisoned, and possibly segregated in the near future. :-/
- jrumbut 3y agoI think this will happen, will be as inconvenient as you envision, but I think it will be for the best. We're not socially ready for one AI winner. The resulting giant would be too powerful and too influential.
- TotalCrackpot 3y agoJust like the pirate Bay online cinema is better than every streaming service there could be pirate LLM that uses all the data, maybe it could be even trained by internet users sharing a bit of compute with some program?
- hyperthesis 3y agoGreater uptake -> more data -> better AI If anything is going to be based on how good the tech is, it's this.
- singularity2001 3y agoOne mayor difference between Uber and Open AI is that fundamentally openeyes technology will get cheaper for them to run, hardware wise and software wise. They just need to hold their position long enough for variants of Moores law to kick in.
- kevingadd 3y agothe hardware these LLMs run on isn't going to get 10x faster/cheaper in the span of a couple years, it will get incrementally faster at the cost of having to buy new expensive datacenter GPU hardware. It's not going to magically save them from losing money on serving requests.
- Narann 3y agoOpenAI is not cheap, it’s selling at lost.
- RamblingCTO 3y ago> The premise of this is flawed. OpenAI is cheap because of has to be right now. They need to establish market dominance quickly, before competitors slide in. The winner of this horse race is not going to be the company with the best performing AI, it’s going to be the one who does the best job at creating an outstanding UX, ubiquitously presence, entrenching users, and building competitive moats I hate this. Not the best will win, but the one with the biggest pockets. Nothing that helps with technofeudalism. Proper competition would be good.
- shmel 3y agoI think the main difference is that OpenAI doesn't have network effect. AirBnB/Uber/any social network wins because you want to be where everyone else is. ChatGPT is great, but I can switch tomorrow to something else without any issues.