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Okay. Still curious if Apple "at least" has to pay the cloud-compute for the "free" OpenAI services they use (with OpenAI just licensing them their product for

Okay. Still curious if Apple "at least" has to pay the cloud-compute for the "free" OpenAI services they use (with OpenAI just licensing them their product for free) or if Apple really gets free AI-features AND 30% RevShare from handling sales of Premium OpenAI accounts... I can't imagine that the profit of sold Premium subscriptions for OpenAI is sufficient to pay for the infrastructure hundreds of million iPhone users will consume using the free account. Moreover, with Apple obviously executing their usual playbook, being the gatekeeper and total owner of all statistics, then slowly diverting traffic to their own products and cutting out the supplier...

CuriouslyC 2y ago
Sam has gotten OpenAI well capitalized, and is playing a bit of a ponzi game. The big moves he has made are almost certainly not sustainable, and he's betting the farm that OpenAI can snowball into a monopoly position, bring costs way down and take over the world before investors start giving him the cold shoulder. OpenAI is far ahead of pretty much everyone but Meta in the race, but in the long run I think Mark and Yann can shut them down if they keep releasing free models.
- Havoc 2y ago
  That’s not gonna work. The Chinese pricing is already 1/20th of oai. Not as good sure but that very much limits scope for a pure cost play. You can’t win that against state backed entities
  - mensetmanusman 2y ago
    https://apnews.com/article/china-chatbot-xi-jinping-thought-ai-chatgpt-68e6d58031f2fc55dc3c569dd1f0afb2 https://apnews.com/article/china-chatbot-xi-jinping-thought-... What will the Chinese ai be able to discuss?
    - Havoc 2y ago
      Thing is for 99% of usage cases this makes zero difference. Not saying it’s right but it’s largely irrelevant. And it certainly isn’t a moat for oai
      - mensetmanusman 2y ago
        It may be a moat if no one can figure out how to censor an ai for china without a lobotomy.
  - infecto 2y ago
    The Great wall of China is as good as OAI?
threeseed 2y ago
None of this makes any sense. a) Microsoft pays for compute. OpenAI never intended to run their own cloud. b) Apple's 15%/30% is a "cost of channel" for developers. It is the fee they pay to get free users delivered to their app. And the decision to do this is purely a business one that can be changed at will and does not apply at all to this situation. c) Calling Apple a gatekeeper for implementing additional features to their OS is odd to the say the least. They have made it clear during the keynote/WWDC presentations that they plan to add additional providers than OpenAI.
- rickdeckard 2y ago
  > a) Microsoft pays for compute. OpenAI never intended to run their own cloud. No, Microsoft INVESTED in OpenAI and in exchange became OpenAI's exclusive cloud provider. That doesn't mean they pay for the compute of all customers. > b) Apple's 15%/30% is a "cost of channel" for developers. It is the fee they pay to get free users delivered to their app. And the decision to do this is purely a business one that can be changed at will and does not apply at all to this situation. Not sure what you meant to say here. Purchasing of OpenAI "premium" would be handled via Apple's payment platform, for which Apple will likely take a cut. Regardless, OpenAI's gamble would be to onboard ~100M iPhone users under a "free" tier in a single rollout step, in hopes that the conversion-rate to an OpenAI premium will be high enough to offset the (infrastructure!) cost of serving all those users for free > c) Calling Apple a gatekeeper for implementing additional features to their OS is odd to the say the least. They have made it clear during the keynote/WWDC presentations that they plan to add additional providers than OpenAI. Apple is the gatekeeper because they are in control of the decision to offload AI-tasks to a 3rd party service or do them "in-house" (on-device/Apple-cloud), This doesn't change regardless whether they stated this upfront at the keynote/WWDC or not. Because of this structure, Apple is are aware of every single AI-task that is to be done and will use this information to influence their in-house roadmap (a natural decision, because on-device is better than cloud, and Apple-cloud is better because <insert tech of Apple cloud here>). At some point in the future, the user will be able to select WHICH 3rd party he wants to use, but so far I don't see any indication that Apple considers themselves as a 3rd party. And even if they would, they hold more information than all other providers because they FIRST decide whether a task can be handled on-device or not.

CuriouslyC 2y ago

Sam has gotten OpenAI well capitalized, and is playing a bit of a ponzi game. The big moves he has made are almost certainly not sustainable, and he's betting the farm that OpenAI can snowball into a monopoly position, bring costs way down and take over the world before investors start giving him the cold shoulder. OpenAI is far ahead of pretty much everyone but Meta in the race, but in the long run I think Mark and Yann can shut them down if they keep releasing free models.

Havoc 2y ago
That’s not gonna work. The Chinese pricing is already 1/20th of oai. Not as good sure but that very much limits scope for a pure cost play. You can’t win that against state backed entities
- mensetmanusman 2y ago
  https://apnews.com/article/china-chatbot-xi-jinping-thought-ai-chatgpt-68e6d58031f2fc55dc3c569dd1f0afb2 https://apnews.com/article/china-chatbot-xi-jinping-thought-... What will the Chinese ai be able to discuss?
  - Havoc 2y ago
    Thing is for 99% of usage cases this makes zero difference. Not saying it’s right but it’s largely irrelevant. And it certainly isn’t a moat for oai
    - mensetmanusman 2y ago
      It may be a moat if no one can figure out how to censor an ai for china without a lobotomy.
- infecto 2y ago
  The Great wall of China is as good as OAI?

threeseed 2y ago

None of this makes any sense. a) Microsoft pays for compute. OpenAI never intended to run their own cloud. b) Apple's 15%/30% is a "cost of channel" for developers. It is the fee they pay to get free users delivered to their app. And the decision to do this is purely a business one that can be changed at will and does not apply at all to this situation. c) Calling Apple a gatekeeper for implementing additional features to their OS is odd to the say the least. They have made it clear during the keynote/WWDC presentations that they plan to add additional providers than OpenAI.

rickdeckard 2y ago
> a) Microsoft pays for compute. OpenAI never intended to run their own cloud. No, Microsoft INVESTED in OpenAI and in exchange became OpenAI's exclusive cloud provider. That doesn't mean they pay for the compute of all customers. > b) Apple's 15%/30% is a "cost of channel" for developers. It is the fee they pay to get free users delivered to their app. And the decision to do this is purely a business one that can be changed at will and does not apply at all to this situation. Not sure what you meant to say here. Purchasing of OpenAI "premium" would be handled via Apple's payment platform, for which Apple will likely take a cut. Regardless, OpenAI's gamble would be to onboard ~100M iPhone users under a "free" tier in a single rollout step, in hopes that the conversion-rate to an OpenAI premium will be high enough to offset the (infrastructure!) cost of serving all those users for free > c) Calling Apple a gatekeeper for implementing additional features to their OS is odd to the say the least. They have made it clear during the keynote/WWDC presentations that they plan to add additional providers than OpenAI. Apple is the gatekeeper because they are in control of the decision to offload AI-tasks to a 3rd party service or do them "in-house" (on-device/Apple-cloud), This doesn't change regardless whether they stated this upfront at the keynote/WWDC or not. Because of this structure, Apple is are aware of every single AI-task that is to be done and will use this information to influence their in-house roadmap (a natural decision, because on-device is better than cloud, and Apple-cloud is better because <insert tech of Apple cloud here>). At some point in the future, the user will be able to select WHICH 3rd party he wants to use, but so far I don't see any indication that Apple considers themselves as a 3rd party. And even if they would, they hold more information than all other providers because they FIRST decide whether a task can be handled on-device or not.