4 ms·
>one of the most valued markets ... is based on a stack that is available to anyone The sophisticated investors are not betting on future increasing valuation
by jasode 2y ago
>one of the most valued markets ... is based on a stack that is available to anyone
The sophisticated investors are not betting on future increasing valuations based on current LLMs or the next incremental iterations of it. That's a "static" perspective based on what outsiders currently see as a specific product or tech stack.
Instead, you have to believe in a "dynamic" landscape where OpenAI the organization of employees can build future groundbreaking models that are not LLMs but other AI architectures and products entirely. The so-called "moat" in this thinking would be the "OpenAI team to keep inventing new ideas beyond LLM". The moat is not the LLM itself.
Yes, if everyone focuses LLMs, it does look like Meta's free Llama models will render OpenAI worthless. (E.g. famous memo : https://www.google.com/search?q=We+have+no+Moat%2C+and+Neither+does+OpenAI https://www.google.com/search?q=We+have+no+Moat%2C+and+Neith...)
As an analogy, imagine that in the 1980s, Microsoft's IPO and valuation looks irrational since "writing programming code on the Intel x86 stack" is not a big secret. That stock analysis would then logically continue saying "Anybody can write x86 software such as Lotus, Borland, etc." But the lesson learned was that the moat was never the "Intel x86 stack"; the moat was really the whole Microsoft team.
That said, if OpenAI doesn't have any future amazing ideas, their valuation will crash.
- melenaboija 2y agoI agree in most of what you said. The main problem for me is that I dont see LLMs are as solid foundations to create a company as technology progress from the 80s. Im 42 though and already feeling old to understand the future lol
- silvestrov 2y agoI'd say that Microsoft's moat was the copyright law and ability to bully the hardware companies with exclusive distribution contracts. Writing a new DOS (or Windows 3) from scratch is something a lot of developers could do. They just couldn't do it legally. And thus it was easy to bully Compaq and others into only distributing PCs with DOS/Windows installed. For some time you even had to pay the Microsoft fee when you wanted a PC with Linux installed.
- Schiendelman 2y agoIf this was their most important moat for you, what is their moat now that it is gone?
- immibis 2y agoThey don't have one, which is why they're struggling to maintain market share. They run solely on brand loyalty, and slightly on competing with AWS and GCP to sell server hosting to people with more money than sense.
- Schiendelman 2y agoSo you believe they became the most valuable company in the world (a few times recently though Apple is currently 13% ahead) with no moat? That's an interesting take. Is it possible you just don't know much about them?
- immibis 2y agoThe stock market is objectively quite stupid. I'm not sure what you're trying to imply with this.