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AI companies are pivoting from creating gods to building products
- bamboozled 2y agoI guess they've worked out making money is an important part of any business?
- deleted 2y ago[deleted]
- candiddevmike 2y agoTheir moat has evaporated on the B2C side--no friction, plenty of alternatives, overly generous free tier--and B2B is freaked out about non-local usage.
- Kuinox 2y ago[flagged]
- echelon 2y ago> 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.
- adventured 2y ago> 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.
- wnc3141 2y agoSort of like railroads, a super simple product, but insanely expensive to build a network at scale except for those who already have.
- simonw 2y ago> 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. I disagree. The more we learn about LLMs the more it appears that they're not as difficult to build as it initially seemed. You need a lot of GPUs and electricity, so you need money, but the core ideas: dump in a ton of pre-training data, then run layers of instruction tuning on top - are straight-forward enough that there are already 4-5 organizations that are capable of training GPT-4 class LLMs - and it's still a pretty young field. Compared to human endeavors like the Apollo project LLMs are pretty small fry.
- hn_throwaway_99 2y ago100%. I don't think we should at all minimize the decades of research that it took to get to the current "generative AI boom", but once transformers were invented in 2018, we basically found that just throwing more and more data at the problem gave you better results. And not to discount the other important advances like RLHF, but the reason everyone talks about the big model companies as having "no moat" is because it's not really a secret of how to recreate these models. That is basically the complete opposite of, say, other companies that really do build "the most challenging products that have been created in all of human history." E.g. nobody has really been able to recreate TSMC's success, which requires not only billions but a highly educated, trained, and specialized workforce.
- simonw 2y agoTheir 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.
- Kuinox 2y agoOf 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.
- jumploops 2y agoI 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-breakdown https://www.notoriousplg.ai/p/notorious-openais-revenue-brea...
- mupuff1234 2y agoHow do you know they have a lot of paid subscribers if their numbers aren't public? I'd guess that outside of a core "fanbase" / early adopter type they don't have that many subscribers.
- simonw 2y agoRumors. The Information had a story about this (but it's behind a paywall): https://www.theinformation.com/articles/openais-annualized-revenue-doubles-to-3-4-billion-since-late-2023 https://www.theinformation.com/articles/openais-annualized-r... - their story was based on "people with knowledge of the situation" aka insider leaks. I don't know the source for https://www.notoriousplg.ai/p/notorious-openais-revenue-breakdown https://www.notoriousplg.ai/p/notorious-openais-revenue-brea... but it could just be that same Information article.
- 2y ago
- fire_lake 2y agoMeanwhile Amazon will host Llama and other models in AWS (which you are already using) at reasonable rates.
- deleted 2y ago[deleted]
- pdpi 2y ago> Imagine not understanding that their main way of doing money is through their API for other companies, and not through a product. Or, more to the point: Their primary product is B2B, not B2C.
- j45 2y agoThere's no shortage of valuable B2B products to be built through an AI API.
- wongarsu 2y agoIf other people build it using OpenAIs API that's still B2B from OpenAI's point of view though.
- crackalamoo 2y agoIn principle, yes. In practice, it's a little more tricky. AI APIs give mostly human-level reliable results in many cases. But they don't work well 100% of the time, which affects trust in an automated B2B product meant to replace human labor. There are still applications that aren't meant to replace human labor, just to generate natural language very quickly. I've even seen this done in academia. And also, the API AIs are expected to become more reliable over time.
- j45 2y agoReliability is much more possible than it was 1-2 years ago. There was an article early on I'm trying to find that said the direction of attention was counter-intuitive this time around. Some of this is in the weeds, but those who have kept up actively trying to use the AI for 12-18 months are often saying and seeing different things because they know what capabilities have arrived while some of us hang on to the understanding from the last time we might have looked at something. Where I think I see things differently both in what I've been able to show and deliver, is the application of this technology does need to come before, or right along with development of it. This has largely been overlooked so far Learning how to use something new and pretty different requires trying to use it, see what it can do reliably, and what it's improving at, and helping organizations with $ to fund something they need. The big one still, is that something that's not possible today, has to be looked at more through a lens of not if, but when. The when has been happening much quicker. They can get much closer to working well 100% of the time. Often by not using them at each step, or not wanting a magic wand to figure it all out. Human labor replacement isn't anything new. Anything simple or repetitive technology in general (including LLMs) will make a dent. The applications for natural language, or not are quite valid. I had someone in academia approach me for designing a guide to help grade in the personalized style of a professor. The irony was there's ways to do it without LLM that might equal what is posisble today, but what they were asking for was valid. One of the big issues that's improving is not just API "reliability", but the cost of running things per request off API, or reasonably running som eor part of it locally.
- wongarsu 2y agoAnd at release ChatGPT was meant as a marketing gimmick. A fun way to interact with a slightly finetuned version of GPT3.5 to showcase how good their models had become. If anything it's remarkable how much they leaned into this success, building an iOS and Android app, speeding up the models, adding a premium plan, lots of new features, and eventually deprecating their text-completion mode and going all in on chat as the interaction mode for their LLMs.
- warkdarrior 2y ago[flagged]
- marymkearney 2y agoJust a heads-up. I'm interested in your online workshop link, but it's private. https://sites.google.com/princeton.edu/agents-workshop https://sites.google.com/princeton.edu/agents-workshop
- rustypotato 2y ago> But when developers put AI in consumer products, people expect it to behave like software, which means that it needs to work deterministically. If your AI travel agent books vacations to the correct destination only 90% of the time, it won’t be successful. This is the fundamental problem that prevents generative AI from becoming a "foundational building block" for most products. Even with rigorous safety measures in place, there are few guarantees about its output. AI is about as solid as sand when it comes to determinism, which is great if you're trying to sell sand, but not so great if you're trying to build a huge structure on top of it.
- BobbyJo 2y agoI've made this statement a bunch in other mediums: The reason AI software is always "AI software" and not just a useful product is because AI is fallible. The reason we can build such deep and complex software system is because each layer can assume the one below it will "just work". If it only worked 99% of the time, we'd all still be interfacing with assembly, because we'd have to be aware of the mistakes that were made and deal with them, otherwise the errors would compound until software was useless. Until AI achieves the level of determinism we have with other software, it'll have to stay at the surface.
- loa_in_ 2y agoBut software works only 99% of the time. For some definition of work: 99% of days it's run, 99% of clicks, 99% of CPU time in given component, 99% of versions released and linked into some business' production binary, 99% of github tags, 99% of commits, 99% of software that that one guy says is battle-tested
- Groxx 2y agoSoftware works so much more than 99% of the time that it's a rather deliberate strawman to claim otherwise. Newly-"AI"-branded things that I have touched work substantially less than 90% of the time. There are like 3 orders of magnitude difference, even people who aren't paying any attention at all are noticing it.
- 23B1 2y agoWell the whole 'creating gods' thing is just silly fantasy nonsense to cover up for what's really going on, which is novelty and gimmicks. It's okay, I mean even the internet started out as Charlie_Bit_Me.avi and free porn.
- findmore77 2y agoFactually incorrect about the genesis of the internet or even the “mass” internet. But, okay.
- Loughla 2y agoI mean, the Internet really seemed to take off when people realized they could get free porn, to be honest. I'm betting the adoption curve for AI hits when the first company sells photorealistic porn of anyone you have a picture of. Hell, half ass Photoshop porn is lucrative already.
- deleted 2y ago[deleted]
- llm_trw 2y agoYou can do that with local models already.
- 23B1 2y agoApologies, I totally forgot about the pedantry of arguing on the internet that really drove its adoption.
- fragmede 2y ago> Charlie_Bit_Me.avi Charlie Bit Me is of the YouTube generation, so it wasn't passed around as an avi email attachment like some older memes of the previous generation. From that long ago, Exploding Whale comes to mind.
- EasyMark 2y agoI’m not sure what book you read on the origins of the internet but it is very very far off from the actual truth.
- pphysch 2y agoGoogle has been productizing AI for a while now. 2021 Pixels have the Tensor SoC which was explicitly marketed as an AI chip. Chatbots weren't part of the equation back then, but offline image translation, magic eraser, etc certainly were.
- mrinfinitiesx 2y agoI'll believe it when I see it.
- ryandrake 2y agoCompanies keep going at it the wrong way. Instead of saying "We have AI, let's find products we can make out of AI!" they should be saying, "What products do people want, let's use whatever tools we have (including maybe AI) to make them." The idea that a company is an AI company should be as ridiculous as a company being a Python company. "We are Python-first, have Python experts, and all of our products are made with Python. Our customers want their apps to have Python in them. We just have to 'productize Python' and find the right killer app for Python and we'll be successful!" Going at it from the wrong direction. Replace Python in that quote with AI, and you probably have something a real company has said in 2024.
- sroussey 2y agoThis has been the case for decades. Look at the internet and .com’s. Mobile. Etc.
- slg 2y agoIt really is one of the more effective ways to identify a bubble when companies shift to selling themselves on the tools and technology they use rather than the problem they are solving.
- candiddevmike 2y agoI blogged about our glorious journey Becoming an AI Company (TM) https://candid.dev/blog/becoming-an-ai-company/ https://candid.dev/blog/becoming-an-ai-company/
- batch12 2y agoI was unmoved until I hit "Natural Language™".
- necroforest 2y agoI don't entirely disagree with you, but "what products do people want" is overly conservative. Pre-ChatGPT, very few people wanted a (more or less) general purpose chatbot.
- FpUser 2y agoChatGPT is very useful for me to the point that I pay subscription fee. To me it IS the product.
- 8organicbits 2y agoI haven't found a use for it. What do you use it for?
- guywithahat 2y agoI use it to auto generate responses to ridiculous rhetorical questions on hacker news
- FpUser 2y agoFor many things in general for IT related tasks in particular. a) Write me shell script which does this and that. b) what Linux command with what arguments do I call to do such and such thing. c) Write me a function / class in language A/B/C that does this and that d) write me a SQL query that does this and that e) use it as a reference book for any programming language or whatever other subject. etc. etc. The answers sometimes come out wrong and / or does contain non trivial bugs. Being experienced programmer I usually have no problems spotting those just by looking at generated code or running test case created by ChatGPT. Alternatively there are no bugs but the approach is inefficient. In this case point explaining why it is inefficient and what to use instead ChatGPT will fix the approach. Basically it saves me a shit ton of time.
- 8organicbits 2y agoDo you have any strategy for prompting? I've found I need to spend a lot of effort coaxing it to understand the problem. Hallucinations were pretty common, and it lead me down a couple believable but non-viable paths. Like coding an extension for Chrome, but doing things the permission system will not allow.
- t-writescode 2y agoI find it to be orders of magnitude more helpful at getting me started on the research journey when I don't know how to formulate the question of what I'm researching. I find it useful for: * throwing ideas at a wall and rubber-ducking my emotional state and feelings. * creating silly, meme images in strange circumstances, sometimes. * answering simple "what's the name of that movie / song / whatever" questions Is it always right? Absolutely not. Is it a good starting point? Yes. Think of it like the school and the early days of Wikipedia. "Can I use Wikipedia as a source? No. But you can use it to find primary sources and use those in your research paper!"
- byyoung3 2y agodepends on your definition of "good." if good means creating the next generation of recommendation algorithms that result massive technology addiction and a mental health crisis, then yeah
- m3kw9 2y agoBecause you need to make money to get there
- Lerc 2y agoInstead of pivoting, can this behaviour be explained by trying lots of different things and then iterating on the ones that show promise? It's all well and good to say "Make something people want" but for anything that people want usually one of three things is true 1. Someone else is already making it. 2. Nobody knows how to make it. 3. Nobody knows that people want it. People experimenting with 2 and 3 will have a lot of failures, but the great successes will come from those groups as well. Sure, every trend in business has a lot of companies going "we should do this because everyone else is" It was a dumb idea for previous trends and it is a dumb idea now. Consider how many companies did that for the internet. There were a lot of poorly thought out forays into having an internet presence. Of those companies still around, they pretty much will have an internet presence now that serves their purposes. They transition from "because everyone else is" as their motivation to "We want specific ability x,y,&z" Perhaps the best way to get from "everyone else is doing it" to knowing what to build is to play in the pool.
- 8n4vidtmkvmk 2y agoThat's exactly what these companies are doing. They're trying a lot of different ideas, and seeing what sticks. The problem is that they're annoying users and causing distrust.
- captainkrtek 2y agoWhen I see “AI” in the product description of something I’m almost immediately turned off. It’s plastered everywhere for most tech companies now and doesn’t mean anything practically, despite trying to sound like a differentiator.
- frabjoused 2y agoI’m building an integration platform. There’s a thousand ways to deeply embed AI throughout it, both to build integration workflows faster, and to help us build smarter API wrappers faster. But AI has always been a secondary augmentation to the product itself. It’s a tool, it shouldn’t be the other way around.
- perihelion_zero 2y ago[flagged]
- ei8htyfi5e 2y agoWhile I don't like the blog title, many things said in there rang true for my company (MoveAI.com). We are building an AI-powered moving concierge that can orchestrate your relocation experience end-to-end. We initially were developing a system that we had hoped could handle everything and eject any workflow issues to a human so the operations team could kick the machine. We were hoping to avoid an interface all together on the customer side. After a few versions and attempts at building this system, we moved towards a traditional app where we focused on building a product people wanted and automate parts of it over time. But even the parts we automated needed an interface for customers to spot check our work. So we found a great designer. ...Before we knew it, we were building a traditional company, with some AI. The company is doing well and people love what we're building, but it's different than we imagined. We still believe in the long term vision and promise of the technology, but the article is right, this isn't going to be an overnight process unless some new architecture emerges. In the mean time, we're focused on helping people get from A to B easily using whatever means necessary, because moving f**ing sucks. If you're moving soon or know anybody who is, we'd be happy to help them. -P
- jerrygoyal 2y agopeople who claim AI is just snake oil are farthest from the reality.
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