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They are working on getting all the market share they get at all costs - it's not that different from Amazon and Google from 20 years ago. Will see how it will

They are working on getting all the market share they get at all costs - it's not that different from Amazon and Google from 20 years ago. Will see how it will work out for them: 20 years ago there were a lot of losers and a very few big winners. Most likely history will repeat itself again, with or without OpenAI. But now even regulators are working for them - the more regulations are there, the harder it will be for late comers to join.

lgg 2y ago
It really is not the same. Amazon was not profitable because it was building out logistics, and then AWS data centers. There were defensible moats around their business that their growth facilitated. Google built out data centers and fiber, again tangible assets they had that competitors did not. OpenAI's spending is mostly buying compute from other people. In other words, OpenAI's growth is paying for Microsoft's data centers. The only real asset OpenAI is building are their models. While they may be the best models available today it is unclear if that those any durable advantage since everyone in the industry is advancing very quickly, and it is unclear if they can really monetize effectively them without the infrastructure to run them.
- rglullis 2y ago
  > The only real asset OpenAI is building are their models Which Zuckerberg is doing his best to completely turn them into commodities.
  - TyrianPurple 2y ago
    > Which Zuckerberg is doing his best to completely turn them into commodities By giving them out for free??
    - rglullis 2y ago
      Yes, exactly. In the same way that IBM "gave away" investment in Linux to grow their IT Consulting Business revenues.
    - a_wild_dandan 2y ago
      "Commoditize your complement."
- gosub100 2y ago
  Amazon was also able to grow because they weren't paying sales tax for, what, 10+ years of their existence?
  - fooker 2y ago
    Yes. This sort of incentives are what makes unicorns possible.
- n_ary 2y ago
  OAI moat is the brand and getting people habituated into using it more. The aim is to become synonymous to AI, same as Google is synonymous to online search(though in recent times, I am horrified to see that my non-techy friends now use Facebook to search first and then if not satisfied, goes to Google). Also, there are immense lobbying everywhere covertly, if you haven’t seen it, look at the prominent news media, AI is now akin to “productivity gain” and “innovation”, and “adapting AI or we fall behind” attitude. Look at all the hammers falling on different industries about energy waste, climate change while AI’s usage of massive energy is presented as “innovation and next generation of work and productivity gains to be unlocked”. The target for OAI(and AI wave in general) is normal people, not tech people. And when people say AI, you conveniently see OAI emerge from news, social media, your colleagues, your boss, your friends.
__loam 2y ago
Love the bizarre techno libertarian view that any form of regulation is the result of regulatory capture to kill competition and not a result of like 20 years of bad actors running rampant in the industry at the end there.
- joe_the_user 2y ago
  Why can't it be both? Market ideologues have both fought regulation and allowed the cozy situations encompassed by regulation capture (allowing the "revolving door" between industry and government based on "who else would know how to regulate? lol")
- oaththrowaway 2y ago
  sama is basically trying to say that OpenAI is the only one who can be trusted to build LLMs. How is that not regulatory capture?
  - Kbelicius 2y ago
    So making a statement is regulatory capture now?
    - int_19h 2y ago
      It's a statement that expresses the desire to achieve regulatory capture.
      - consteval 2y ago
        Which isn't up to OpenAI, it's up to the regulators and, to a lesser extent, the voters.
    - gspencley 2y ago
      Yeah but the crucial piece of context is who that statement is made to and how it is received. We typically call this process "lobbying." And what it usually looks like in practice is that regulators will extend an open invite to "industry leaders" to chime in on the proposed regulation. During that process, the interest groups advocating on behalf of the "industry leaders" will utter statements that aim to shape the regulation in a way that is beneficial to the corporation being lobbied for. The end goal is typically to land on a new bill that will a) give the regulators new fodder for legislative resume, so they can show their voting constituency that they accomplished something and b) are not too expensive for the "industry leaders" to comply with. During the regulatory process this will get shrouded in language along the lines of making sure that the regulation won't cost jobs etc. But, if all goes according to plan, the regulation will c) be insanely expensive for new startups to comply with, thus ensuring that any negative consequences that are caused by the new bill will be "invisible" because they will largely apply to hypotheticals (new startups wanting to enter the market) and small players that aren't on anyone's radar
KaiserPro 2y ago
> it's not that different from Amazon and Google from 20 years ago I mean it is a little. Amazon didn't extend its losses while growing it's buisness. Yes it made losses (quite large ones for the time) but the underlying principle was pretty solid. They had a market that clearing going to be profitable, because the overheads were much less. But openAI doesn't have that market. They offer something free that is comparable with the competitors. A paid for option that isn't much better than the free version, and isn't much different in capability from the competition. Moreover, in order to remain competitive they need to spend _billions_. Even if we ignore meta kneecaping them, anthorpic et al are yapping at their heels. The market isn't actually that solid, there isnt anywhere enough cash to maintain the research spend.

lgg 2y ago

It really is not the same. Amazon was not profitable because it was building out logistics, and then AWS data centers. There were defensible moats around their business that their growth facilitated. Google built out data centers and fiber, again tangible assets they had that competitors did not. OpenAI's spending is mostly buying compute from other people. In other words, OpenAI's growth is paying for Microsoft's data centers. The only real asset OpenAI is building are their models. While they may be the best models available today it is unclear if that those any durable advantage since everyone in the industry is advancing very quickly, and it is unclear if they can really monetize effectively them without the infrastructure to run them.

rglullis 2y ago
> The only real asset OpenAI is building are their models Which Zuckerberg is doing his best to completely turn them into commodities.
- TyrianPurple 2y ago
  > Which Zuckerberg is doing his best to completely turn them into commodities By giving them out for free??
  - rglullis 2y ago
    Yes, exactly. In the same way that IBM "gave away" investment in Linux to grow their IT Consulting Business revenues.
  - a_wild_dandan 2y ago
    "Commoditize your complement."
gosub100 2y ago
Amazon was also able to grow because they weren't paying sales tax for, what, 10+ years of their existence?
- fooker 2y ago
  Yes. This sort of incentives are what makes unicorns possible.
n_ary 2y ago
OAI moat is the brand and getting people habituated into using it more. The aim is to become synonymous to AI, same as Google is synonymous to online search(though in recent times, I am horrified to see that my non-techy friends now use Facebook to search first and then if not satisfied, goes to Google). Also, there are immense lobbying everywhere covertly, if you haven’t seen it, look at the prominent news media, AI is now akin to “productivity gain” and “innovation”, and “adapting AI or we fall behind” attitude. Look at all the hammers falling on different industries about energy waste, climate change while AI’s usage of massive energy is presented as “innovation and next generation of work and productivity gains to be unlocked”. The target for OAI(and AI wave in general) is normal people, not tech people. And when people say AI, you conveniently see OAI emerge from news, social media, your colleagues, your boss, your friends.

__loam 2y ago

Love the bizarre techno libertarian view that any form of regulation is the result of regulatory capture to kill competition and not a result of like 20 years of bad actors running rampant in the industry at the end there.

joe_the_user 2y ago
Why can't it be both? Market ideologues have both fought regulation and allowed the cozy situations encompassed by regulation capture (allowing the "revolving door" between industry and government based on "who else would know how to regulate? lol")
oaththrowaway 2y ago
sama is basically trying to say that OpenAI is the only one who can be trusted to build LLMs. How is that not regulatory capture?
- Kbelicius 2y ago
  So making a statement is regulatory capture now?
  - int_19h 2y ago
    It's a statement that expresses the desire to achieve regulatory capture.
    - consteval 2y ago
      Which isn't up to OpenAI, it's up to the regulators and, to a lesser extent, the voters.
  - gspencley 2y ago
    Yeah but the crucial piece of context is who that statement is made to and how it is received. We typically call this process "lobbying." And what it usually looks like in practice is that regulators will extend an open invite to "industry leaders" to chime in on the proposed regulation. During that process, the interest groups advocating on behalf of the "industry leaders" will utter statements that aim to shape the regulation in a way that is beneficial to the corporation being lobbied for. The end goal is typically to land on a new bill that will a) give the regulators new fodder for legislative resume, so they can show their voting constituency that they accomplished something and b) are not too expensive for the "industry leaders" to comply with. During the regulatory process this will get shrouded in language along the lines of making sure that the regulation won't cost jobs etc. But, if all goes according to plan, the regulation will c) be insanely expensive for new startups to comply with, thus ensuring that any negative consequences that are caused by the new bill will be "invisible" because they will largely apply to hypotheticals (new startups wanting to enter the market) and small players that aren't on anyone's radar

KaiserPro 2y ago

> it's not that different from Amazon and Google from 20 years ago I mean it is a little. Amazon didn't extend its losses while growing it's buisness. Yes it made losses (quite large ones for the time) but the underlying principle was pretty solid. They had a market that clearing going to be profitable, because the overheads were much less. But openAI doesn't have that market. They offer something free that is comparable with the competitors. A paid for option that isn't much better than the free version, and isn't much different in capability from the competition. Moreover, in order to remain competitive they need to spend _billions_. Even if we ignore meta kneecaping them, anthorpic et al are yapping at their heels. The market isn't actually that solid, there isnt anywhere enough cash to maintain the research spend.