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OpenAI is Visa – Buttering up the government to retain a monopoly

272 points by gpi 2y ago

chvid 2y ago
Not much of a monopoly when they are being outcompeted by open source models done by companies with a fraction of OpenAIs resources. Sure - a government sanctioned monopoly might have been their fantasy but now it is getting obvious it is not the way things are going to go …
- delichon 2y ago
  And it's less likely after the election. Trump pledged to repeal Biden's 2023 executive order on AI. He put out a very different executive order in 2019 that sought to reduce barriers. He is an enthusiastic deregulator compared to the current chief. That helped more than a little to get Andreessen, Musk, etc., to climb on the bandwagon. It can all be reversed at the wave of a very transactional presidential hand, but the sounds coming from the incoming administration are more favorable to open AI than to OpenAI. https://www.rstreet.org/commentary/ai-policy-in-the-trump-administration-and-congress-after-the-2024-elections/ https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-maintaining-american-leadership-artificial-intelligence/
  - ADeerAppeared 2y ago
    Do keep in mind that both Trump and Andreessen & co are not interested in deregulation for ideological reasons, only because this specific deregulation is favourable for the men in question. It's not about "open AI" but just opposition to the tech giants. And as a consequence, there's a danger that they may pivot on AI regulation the moment anything happens to the current AI bubble that makes it unappealing for VC funding. (OpenAI & co raising the prices on the models to above operating costs would almost certainly eviscerate the AI startup scene)
- behnamoh 2y ago
  > by companies with a fraction of OpenAIs resources. Meta and Google are orders of magnitude greater than OpenAI and they're the only contenders that have challenged GPT models. > But what about Mistral et al? They are not even near GPT-4o. Good gpt-3.5-turbo alt tho.
  - fragmede 2y ago
    Claude by Anthropic outperforms OpenAI and Meta's models on several benchmarks and for the coding I do, and Anthropic is only 500-1000 people according to Crunch base
  - do_not_redeem 2y ago
    You might be interested in https://news.ycombinator.com/item?id=42514633 https://news.ycombinator.com/item?id=42514633 In fairness, OpenAI has been leading benchmarks for the most part, but open source is never more than 3-6 months behind.
    - dylan604 2y ago
      Just because some one has a slightly better product doesn’t mean they have a monopoly. That’s like saying McDonalds has a monopoly because they have better fries. It’s just not true in any part of the statement
      - ipaddr 2y ago
        They have a monopoly on the name McDonalds. If McDonalds had a fry machine and lobbied that making fries anyone other way was dangerous and only they should be allowed to use the fry machine that would more align with this situation. It's not a monopoly but trying hard to get a government based one.
        dylan604 2y ago
        You're stretching so far to attempt to make a point you're now trying to equate a trade mark as a monopoly. These are totally different concepts and you've totally lost the plot with this analogy
notavalleyman 2y ago
There is no way in which the little stock price boxes helped me understand or appreciate this article
- philips 2y ago
  The news source is owned by Robinhood. The stock boxes are to get you into the product buying stock.
  - omolobo 2y ago
    It should also be noted that those elements are dynamic and update in pseudo-real-time. In case my boy is still trying to make sense of them in the context of the article, lol.
bko 2y ago
> What Visa did in response recently got it sued by the Justice Department, which accused Visa of using aggressive tactics with companies like CostcoCOST $956.14 (-0.29%) and AppleAAPL $258.99 (0.35%) to guarantee that a competitive payment network would not develop, The Wall Street Journal reported. I don't buy the reasoning as to how Visa built a moat. From the WSJ article linked in the article: >> Visa offered to pay Costco $150 million. One condition of the deal: Costco would not do a credit-card deal with a bank that had its own network, according to the people familiar with the matter and the court filings. That shut out Chase. Visa also offered Costco an exclusive discount on the interchange fees the store pays when someone makes purchases with Visa credit cards. So basically Visa offered Costco a discount if it allowed their cards exclusively. The thing with credit cards is that you can have more than one. I have a Visa and a Mastercard and when I shop at Costco I use Visa. I don't see this reason stopping someone wanting to compete as though if they can't get the Costco dollars, they have no product. That's not to say that Visa doesn't use lobbying and legal system to erect barriers to entry. But that really has to do with ridiculous regulations and things like KYC, but we're not ready to have that conversation yet.
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- ToucanLoucan 2y ago
  > The thing with credit cards is that you can have more than one. I have a Visa and a Mastercard and when I shop at Costco I use Visa. Well... yeah. No shit. Because you couldn't use the Mastercard if you wanted to. That's what this article is complaining about. And in their most recent quarter Costco posted a handy 80 billion in net sales, I'm betting those processing fees added up to a tidy sum for Visa, corroborated in the fact that they plunked down 150 million to keep it exclusive to them. > I don't see this reason stopping someone wanting to compete as though if they can't get the Costco dollars, they have no product. It's literally textbook pay for play. It's purchasing an advantage in an open market. Mastercard will receive no transaction fees from Costco this or any year unless this agreement is revisited, and not because people don't want to use Mastercards there, but because Visa paid Costco to not let them. How is that anything but anti-competitive?
insane_dreamer 2y ago
Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Would be helpful to have some concrete examples of what it did and what OpenAI is trying to do. The point of the article sounds plausible, but doesn't really present any evidence to support it. Also OpenAI in no way has a monopoly of the kind that Visa/MC has.
- cute_boi 2y ago
  Idk why government can't even regulate variable pricing that Visa/MC charges...
  - Kwpolska 2y ago
    European governments can. The US government could, but the Visa/MC lobbyists are so nice and friendly.
- deleted 2y ago
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- ADeerAppeared 2y ago
  > Also OpenAI in no way has a monopoly of the kind that Visa/MC has. I think this is misreading how literal the comparison is meant to be; Sherwood's running a bunch of "OpenAI is X" articles today. This is not about the massive duopoly which has been catastrophic for US payments, but about the way companies entrench themselves. > Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Those details are in the linked WSJ article; https://www.wsj.com/finance/banking/visa-wanted-a-vast-empire-first-it-had-to-beat-back-its-foes-3b3067f3 https://www.wsj.com/finance/banking/visa-wanted-a-vast-empir... > but doesn't really present any evidence to support it. The main points of concern are mentioned; OpenAI is pushing for "AI regulation" that focusses on the nebulous "doomsday"/skynet scenarios, rather than any of the material harms of AI. The subtext of that is a straightforward "you should ban anyone else building AI because only we can do it safely". Similarly, OpenAI demanding it's investors not fund competitors is pretty ridiculous and explicitly trying to establish a monopoly.
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paxys 2y ago
Visa makes $20B a year in profit. OpenAI and every other large tech company in the space is burning through billions of dollars every year just to stay competitive. It is idiotic to crown a company as a "monopoly" in AI when the business case hasn't even been defined yet. Give it a decade or two then maybe we can have this conversation.
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jo6gwb 2y ago
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johndhi 2y ago
It was a great marketing strategy, imo, to say AI is so scary and impressive and awful it needs to be regulated immediately. Helps them look impressive and good willed & kills all competitors.
- dylan604 2y ago
  So you’re saying there’s no competitors to ClosedAI? How do you arrive at that conclusion?
  - johndhi 2y ago
    Not saying there are zero, but I think Sam's publicity tour bolstered the EU AI Act and the white house exec order, both of which have really hurt EU AI and small AI companies respectively
devindotcom 2y ago
ICYMI this is part of a year-end "OpenAI is..." series from a bunch of writers https://sherwood.news/tech/what-companys-past-reveals-the-future-of-openai/ https://sherwood.news/tech/what-companys-past-reveals-the-fu...
arisAlexis 2y ago
This is now impossible since the government (musk) is in war with openai. If that was the case, it's not anymore
- matthewdgreen 2y ago
  Yes, but Musk has his own AI company so it’s entirely reasonable to be concerned that he’ll try the same strategy. (No, I’m not particularly worried about X.ai, yes I think Musk absolutely would use his influence over the new administration to benefit himself.)
p0w3n3d 2y ago
We may not allow one company i.e. openai win this game. Otherwise the prices will soar up the through the roof
sea-gold 2y ago
The Acquired podcast had great episodes on the background of both Visa[1] and Costco[2]. [1] https://www.acquired.fm/episodes/visa https://www.acquired.fm/episodes/visa [2] https://www.acquired.fm/episodes/costco https://www.acquired.fm/episodes/costco
- senkora 2y ago
  +1 for Acquired. They started out covering tech acquisitions but have branched out to covering non-tech companies with interesting stories. I particularly liked their episode on IKEA.
- gertlex 2y ago
  I think the most interesting bit from the Visa podcast was that in the past 5(ish?) years, their revenue has massively increased... From a "things are nice the way they've always been", this felt like a indication that change was afoot there, too, and has me wary of Visa maybe causing greater harm in the near future.
eichi 2y ago
?? If I insist to use gemini or something umpopular, people around me need to accept that.
femiagbabiaka 2y ago
Every major tech company is Visa now, it's not 1993 anymore
pentagrama 2y ago
> Dozens of other companies, including Google, Meta, and most recently Amazon, have come out with their own foundational models. Some, including Meta’s Llama and Mistral’s 7B, are open source, meaning they can be downloaded and used in other companies’ products free of charge. To say that these models are open source is debatable. At least by the OSI definition, they aren't [1]. The models are free of charge for commercial use, but it may have restrictions (eg. Llama [2]). [1] https://opensource.org/ai/open-source-ai-definition https://opensource.org/ai/open-source-ai-definition [2] > Can anyone access Llama models? What are the terms? Llama models are broadly available to developers and licensees through a variety of hosting providers and on the Meta website. The Llama models are licensed under the applicable Llama Community License Agreement and accompanying Acceptable Use Policy, which provides a permissive license to the models along with certain restrictions to help ensure that the models are used responsibly. Hosting providers may have additional terms applicable to their services. https://www.llama.com/faq/ https://www.llama.com/faq/
karl11 2y ago
Taylor Lorenz? Don’t forget your Gell-Mann Amnesia Effect as you read this…
jopsen 2y ago
Lol, visa had network effect. It also took a long time to build up such a network. Replacing all payment terminals is not easy. And as a customer I'm more likely to care of my card works and not care if I'm charged x% fee. The visa trick if any, was hiding the credit card fee and pushing it to merchants. Whether its a trick or not is hard to tell, for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap.
- lxgr 2y ago
  > I'm more likely to care of my card works and not care if I'm charged x% fee. Sure, any alternative needs to work on a practical/technical level, be convenient, have fraud protection etc. But if it does, and a merchant I know and trust (these are fairly big caveats!) were to offer me a discount equivalent to what my card issuing bank pays me in cashback and then some as an incentive for paying using that alternative, why wouldn't I do it? > Replacing all payment terminals is not easy. Terminals already support multiple payment networks today, some even non-card based. > for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap. It's exactly the other way around. Big chains can strike custom interchange and scheme fee deals with Visa and Mastercard, because they have the credible threat of offering steep discounts on store cards or other "on-us" payment methods; small businesses basically need to accept what they get.
  - chii 2y ago
    > were to offer me a discount equivalent to what my card issuing bank pays me in cashback and that's exactly why these card networks made the merchant agree in the contract to not do exactly that.
    - eszed 2y ago
      I think that shouldn't be permitted. (As in, be illegal for the card companies to impose or enforce.) On the other hand, most gas stations seem to post credit vs cash prices, so they get away with it. What's the story there? Why don't more merchants do it? It's also contrary to card agreements for merchants to add an extra fee ("it's +0.50 if you use a credit card, is that OK?"), but that doesn't seem to be meaningfully enforced.
lazyeye 2y ago
Marc Andreessen talked a little bit about this in his recent interview with Joe Rogan (Joe Rogan! I know....). https://www.youtube.com/watch?v=ye8MOfxD5nU https://www.youtube.com/watch?v=ye8MOfxD5nU He said the govt is actively discouraging pure AI startups because they want the industry dominated by a small number of large companies which they can more easily control. It's a similar story with the crypto industry. Prepare to be "de-banked" if your AI or Crypto startup is not on the anointed list...
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hgarg 2y ago
Better title "OpenAI wishes it. Was Visa for AI but that shop has sailed"
mattlondon 2y ago
How does this attempt even work these days? So let's say you get your monopoly for only OpenAI in the USA. Everyone else in the world just stops and OpenAI just gets to do what they want and name their price? I don't think so. Isn't DeepMind HQ'd in the UK already? I am sure Ireland would jump at the chance to create some friendly tax treatment again to entice competitors. And of course China can just keep being China and churn out a few more coal fired power stations every few weeks to power things cheaply. You may capture consumers and a few Gov contracts, but global companies will just circumvent it
- typeofhuman 2y ago
  According to Marc Andreeseen the us government will classify AI maths and only permit some companies access to it.
  - mattlondon 2y ago
    Yeah but my point is the US can do what it wants, but that's not going to stop anyone else in the world doing it. And the companies that want it will just go and get it from their China or the EU operations instead.
    - bdangubic 2y ago
      if it was only that easy… the US government would basically forbid you from doing business in the US if you violate what us puts into place and very few companies would willingly lose US market
      - mystified5016 2y ago
        China will absolutely call that bluff, as they have done for the past few decades. The US quite simply does not have the clout to make China back down from anything.
        bdangubic 2y ago
Animats 2y ago
Given the business model, it's important to OpenAI that attempts to get a confidence metric out of LLMs be unsuccessful. Here's why. If you could have simple LLMs which reported failure when asked a question they can't answer, you're going to send queries to them first. It's going to be like customer support people who answer questions from a menu but can escalate. The first-tier LLM is probably running locally on a 1U server. Harder problems get escalated to a bigger, but local, LLM. Only the really hard ones require buying some OpenAI tokens and asking the really big model. That approach would reduce OpenAI's revenue by over 90%. What OpenAI wants is for simple models to not work reliably, so you have to use their giant models even on dumb questions. Pushback on this will come from Google, which has to have a tier-type system to cope with their volume of queries, most of which are dumb.
ltbarcly3 2y ago
OpenAI isn't even close to a monopoly, and if it did it has none of the structural advantages that a financial network has to allow it to defend a monopoly. What a manifestly and obviously stupid article. If you set up a financial network, you have to get a little box (often physical) in some saturation level of stores and gas stations and websites so that people will want a card that works on your network in the first place. Once you achieve saturation in both retailers and consumers, it becomes almost impossible for someone to build a competitor because nobody wants to invest to be able to accept a card nobody has, and nobody wants a card you can't use at the stores they want to shop at. There is a fundamental network effect that reinforces this monopoly. OpenAI has literally none of these advantages. In fact it's the opposite, I think OpenAI has no defense as soon as better models come along. They've lost all of their best engineers already and that trend seems to be accelerating. Their new models don't work and are years behind, and meanwhile Anthropic and others are just as good if not better for most use cases.
lxdlam 2y ago
From my very own perspective, to compare OpenAI with any others is meaningless: AI is far different in terms of resources and business models, maybe similar to some others, but it may collapse or have the rug pulled out by another significant technology evolution, e.g., quantum computer which may ridiculously speed up the training, or a more self-update-friendly model architecture. To the rest of us, training a usable model these days is relatively affordable, and it seems to make no difference to use a "most intelligent" model against a subtly small model. The current business blocker is to find the application fields that work for models, which is not an area where OpenAI has an advantage.
ein0p 2y ago
Even ignoring Altman's beef with Elon, it's going to be extremely difficult for him to "butter up" the Trump administration: https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=sam+altman&contributor_employer=OpenAI&two_year_transaction_period=2024&min_date=01%2F01%2F2023&max_date=12%2F31%2F2024 https://www.fec.gov/data/receipts/individual-contributions/?...
kidneystereotyp 2y ago
unrelated but would be cool to get backstory behind blog names lol

272 points by gpi 2y ago

Not much of a monopoly when they are being outcompeted by open source models done by companies with a fraction of OpenAIs resources. Sure - a government sanctioned monopoly might have been their fantasy but now it is getting obvious it is not the way things are going to go …

delichon 2y ago
And it's less likely after the election. Trump pledged to repeal Biden's 2023 executive order on AI. He put out a very different executive order in 2019 that sought to reduce barriers. He is an enthusiastic deregulator compared to the current chief. That helped more than a little to get Andreessen, Musk, etc., to climb on the bandwagon. It can all be reversed at the wave of a very transactional presidential hand, but the sounds coming from the incoming administration are more favorable to open AI than to OpenAI. https://www.rstreet.org/commentary/ai-policy-in-the-trump-administration-and-congress-after-the-2024-elections/ https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-maintaining-american-leadership-artificial-intelligence/
- ADeerAppeared 2y ago
  Do keep in mind that both Trump and Andreessen & co are not interested in deregulation for ideological reasons, only because this specific deregulation is favourable for the men in question. It's not about "open AI" but just opposition to the tech giants. And as a consequence, there's a danger that they may pivot on AI regulation the moment anything happens to the current AI bubble that makes it unappealing for VC funding. (OpenAI & co raising the prices on the models to above operating costs would almost certainly eviscerate the AI startup scene)
behnamoh 2y ago
> by companies with a fraction of OpenAIs resources. Meta and Google are orders of magnitude greater than OpenAI and they're the only contenders that have challenged GPT models. > But what about Mistral et al? They are not even near GPT-4o. Good gpt-3.5-turbo alt tho.
- fragmede 2y ago
  Claude by Anthropic outperforms OpenAI and Meta's models on several benchmarks and for the coding I do, and Anthropic is only 500-1000 people according to Crunch base
- do_not_redeem 2y ago
  You might be interested in https://news.ycombinator.com/item?id=42514633 https://news.ycombinator.com/item?id=42514633 In fairness, OpenAI has been leading benchmarks for the most part, but open source is never more than 3-6 months behind.
  - dylan604 2y ago
    Just because some one has a slightly better product doesn’t mean they have a monopoly. That’s like saying McDonalds has a monopoly because they have better fries. It’s just not true in any part of the statement
    - ipaddr 2y ago
      They have a monopoly on the name McDonalds. If McDonalds had a fry machine and lobbied that making fries anyone other way was dangerous and only they should be allowed to use the fry machine that would more align with this situation. It's not a monopoly but trying hard to get a government based one.
      - dylan604 2y ago
        You're stretching so far to attempt to make a point you're now trying to equate a trade mark as a monopoly. These are totally different concepts and you've totally lost the plot with this analogy

notavalleyman 2y ago

There is no way in which the little stock price boxes helped me understand or appreciate this article

philips 2y ago
The news source is owned by Robinhood. The stock boxes are to get you into the product buying stock.
- omolobo 2y ago
  It should also be noted that those elements are dynamic and update in pseudo-real-time. In case my boy is still trying to make sense of them in the context of the article, lol.

bko 2y ago

> What Visa did in response recently got it sued by the Justice Department, which accused Visa of using aggressive tactics with companies like CostcoCOST $956.14 (-0.29%) and AppleAAPL $258.99 (0.35%) to guarantee that a competitive payment network would not develop, The Wall Street Journal reported. I don't buy the reasoning as to how Visa built a moat. From the WSJ article linked in the article: >> Visa offered to pay Costco $150 million. One condition of the deal: Costco would not do a credit-card deal with a bank that had its own network, according to the people familiar with the matter and the court filings. That shut out Chase. Visa also offered Costco an exclusive discount on the interchange fees the store pays when someone makes purchases with Visa credit cards. So basically Visa offered Costco a discount if it allowed their cards exclusively. The thing with credit cards is that you can have more than one. I have a Visa and a Mastercard and when I shop at Costco I use Visa. I don't see this reason stopping someone wanting to compete as though if they can't get the Costco dollars, they have no product. That's not to say that Visa doesn't use lobbying and legal system to erect barriers to entry. But that really has to do with ridiculous regulations and things like KYC, but we're not ready to have that conversation yet.

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ToucanLoucan 2y ago
> The thing with credit cards is that you can have more than one. I have a Visa and a Mastercard and when I shop at Costco I use Visa. Well... yeah. No shit. Because you couldn't use the Mastercard if you wanted to. That's what this article is complaining about. And in their most recent quarter Costco posted a handy 80 billion in net sales, I'm betting those processing fees added up to a tidy sum for Visa, corroborated in the fact that they plunked down 150 million to keep it exclusive to them. > I don't see this reason stopping someone wanting to compete as though if they can't get the Costco dollars, they have no product. It's literally textbook pay for play. It's purchasing an advantage in an open market. Mastercard will receive no transaction fees from Costco this or any year unless this agreement is revisited, and not because people don't want to use Mastercards there, but because Visa paid Costco to not let them. How is that anything but anti-competitive?

insane_dreamer 2y ago

Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Would be helpful to have some concrete examples of what it did and what OpenAI is trying to do. The point of the article sounds plausible, but doesn't really present any evidence to support it. Also OpenAI in no way has a monopoly of the kind that Visa/MC has.

cute_boi 2y ago
Idk why government can't even regulate variable pricing that Visa/MC charges...
- Kwpolska 2y ago
  European governments can. The US government could, but the Visa/MC lobbyists are so nice and friendly.
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ADeerAppeared 2y ago
> Also OpenAI in no way has a monopoly of the kind that Visa/MC has. I think this is misreading how literal the comparison is meant to be; Sherwood's running a bunch of "OpenAI is X" articles today. This is not about the massive duopoly which has been catastrophic for US payments, but about the way companies entrench themselves. > Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Those details are in the linked WSJ article; https://www.wsj.com/finance/banking/visa-wanted-a-vast-empire-first-it-had-to-beat-back-its-foes-3b3067f3 https://www.wsj.com/finance/banking/visa-wanted-a-vast-empir... > but doesn't really present any evidence to support it. The main points of concern are mentioned; OpenAI is pushing for "AI regulation" that focusses on the nebulous "doomsday"/skynet scenarios, rather than any of the material harms of AI. The subtext of that is a straightforward "you should ban anyone else building AI because only we can do it safely". Similarly, OpenAI demanding it's investors not fund competitors is pretty ridiculous and explicitly trying to establish a monopoly.

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paxys 2y ago

Visa makes $20B a year in profit. OpenAI and every other large tech company in the space is burning through billions of dollars every year just to stay competitive. It is idiotic to crown a company as a "monopoly" in AI when the business case hasn't even been defined yet. Give it a decade or two then maybe we can have this conversation.

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jo6gwb 2y ago

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johndhi 2y ago

It was a great marketing strategy, imo, to say AI is so scary and impressive and awful it needs to be regulated immediately. Helps them look impressive and good willed & kills all competitors.

dylan604 2y ago
So you’re saying there’s no competitors to ClosedAI? How do you arrive at that conclusion?
- johndhi 2y ago
  Not saying there are zero, but I think Sam's publicity tour bolstered the EU AI Act and the white house exec order, both of which have really hurt EU AI and small AI companies respectively

devindotcom 2y ago

ICYMI this is part of a year-end "OpenAI is..." series from a bunch of writers https://sherwood.news/tech/what-companys-past-reveals-the-future-of-openai/ https://sherwood.news/tech/what-companys-past-reveals-the-fu...

arisAlexis 2y ago

This is now impossible since the government (musk) is in war with openai. If that was the case, it's not anymore

matthewdgreen 2y ago
Yes, but Musk has his own AI company so it’s entirely reasonable to be concerned that he’ll try the same strategy. (No, I’m not particularly worried about X.ai, yes I think Musk absolutely would use his influence over the new administration to benefit himself.)

p0w3n3d 2y ago

We may not allow one company i.e. openai win this game. Otherwise the prices will soar up the through the roof

sea-gold 2y ago

The Acquired podcast had great episodes on the background of both Visa[1] and Costco[2]. [1] https://www.acquired.fm/episodes/visa https://www.acquired.fm/episodes/visa [2] https://www.acquired.fm/episodes/costco https://www.acquired.fm/episodes/costco

senkora 2y ago
+1 for Acquired. They started out covering tech acquisitions but have branched out to covering non-tech companies with interesting stories. I particularly liked their episode on IKEA.
gertlex 2y ago
I think the most interesting bit from the Visa podcast was that in the past 5(ish?) years, their revenue has massively increased... From a "things are nice the way they've always been", this felt like a indication that change was afoot there, too, and has me wary of Visa maybe causing greater harm in the near future.

eichi 2y ago

?? If I insist to use gemini or something umpopular, people around me need to accept that.

femiagbabiaka 2y ago

Every major tech company is Visa now, it's not 1993 anymore

pentagrama 2y ago

> Dozens of other companies, including Google, Meta, and most recently Amazon, have come out with their own foundational models. Some, including Meta’s Llama and Mistral’s 7B, are open source, meaning they can be downloaded and used in other companies’ products free of charge. To say that these models are open source is debatable. At least by the OSI definition, they aren't [1]. The models are free of charge for commercial use, but it may have restrictions (eg. Llama [2]). [1] https://opensource.org/ai/open-source-ai-definition https://opensource.org/ai/open-source-ai-definition [2] > Can anyone access Llama models? What are the terms? Llama models are broadly available to developers and licensees through a variety of hosting providers and on the Meta website. The Llama models are licensed under the applicable Llama Community License Agreement and accompanying Acceptable Use Policy, which provides a permissive license to the models along with certain restrictions to help ensure that the models are used responsibly. Hosting providers may have additional terms applicable to their services. https://www.llama.com/faq/ https://www.llama.com/faq/

karl11 2y ago

Taylor Lorenz? Don’t forget your Gell-Mann Amnesia Effect as you read this…

jopsen 2y ago

Lol, visa had network effect. It also took a long time to build up such a network. Replacing all payment terminals is not easy. And as a customer I'm more likely to care of my card works and not care if I'm charged x% fee. The visa trick if any, was hiding the credit card fee and pushing it to merchants. Whether its a trick or not is hard to tell, for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap.

lxgr 2y ago
> I'm more likely to care of my card works and not care if I'm charged x% fee. Sure, any alternative needs to work on a practical/technical level, be convenient, have fraud protection etc. But if it does, and a merchant I know and trust (these are fairly big caveats!) were to offer me a discount equivalent to what my card issuing bank pays me in cashback and then some as an incentive for paying using that alternative, why wouldn't I do it? > Replacing all payment terminals is not easy. Terminals already support multiple payment networks today, some even non-card based. > for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap. It's exactly the other way around. Big chains can strike custom interchange and scheme fee deals with Visa and Mastercard, because they have the credible threat of offering steep discounts on store cards or other "on-us" payment methods; small businesses basically need to accept what they get.
- chii 2y ago
  > were to offer me a discount equivalent to what my card issuing bank pays me in cashback and that's exactly why these card networks made the merchant agree in the contract to not do exactly that.
  - eszed 2y ago
    I think that shouldn't be permitted. (As in, be illegal for the card companies to impose or enforce.) On the other hand, most gas stations seem to post credit vs cash prices, so they get away with it. What's the story there? Why don't more merchants do it? It's also contrary to card agreements for merchants to add an extra fee ("it's +0.50 if you use a credit card, is that OK?"), but that doesn't seem to be meaningfully enforced.

lazyeye 2y ago

Marc Andreessen talked a little bit about this in his recent interview with Joe Rogan (Joe Rogan! I know....). https://www.youtube.com/watch?v=ye8MOfxD5nU https://www.youtube.com/watch?v=ye8MOfxD5nU He said the govt is actively discouraging pure AI startups because they want the industry dominated by a small number of large companies which they can more easily control. It's a similar story with the crypto industry. Prepare to be "de-banked" if your AI or Crypto startup is not on the anointed list...

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hgarg 2y ago

Better title "OpenAI wishes it. Was Visa for AI but that shop has sailed"

mattlondon 2y ago

How does this attempt even work these days? So let's say you get your monopoly for only OpenAI in the USA. Everyone else in the world just stops and OpenAI just gets to do what they want and name their price? I don't think so. Isn't DeepMind HQ'd in the UK already? I am sure Ireland would jump at the chance to create some friendly tax treatment again to entice competitors. And of course China can just keep being China and churn out a few more coal fired power stations every few weeks to power things cheaply. You may capture consumers and a few Gov contracts, but global companies will just circumvent it

typeofhuman 2y ago
According to Marc Andreeseen the us government will classify AI maths and only permit some companies access to it.
- mattlondon 2y ago
  Yeah but my point is the US can do what it wants, but that's not going to stop anyone else in the world doing it. And the companies that want it will just go and get it from their China or the EU operations instead.
  - bdangubic 2y ago
    if it was only that easy… the US government would basically forbid you from doing business in the US if you violate what us puts into place and very few companies would willingly lose US market
    - mystified5016 2y ago
      China will absolutely call that bluff, as they have done for the past few decades. The US quite simply does not have the clout to make China back down from anything.
      - bdangubic 2y ago

Animats 2y ago

Given the business model, it's important to OpenAI that attempts to get a confidence metric out of LLMs be unsuccessful. Here's why. If you could have simple LLMs which reported failure when asked a question they can't answer, you're going to send queries to them first. It's going to be like customer support people who answer questions from a menu but can escalate. The first-tier LLM is probably running locally on a 1U server. Harder problems get escalated to a bigger, but local, LLM. Only the really hard ones require buying some OpenAI tokens and asking the really big model. That approach would reduce OpenAI's revenue by over 90%. What OpenAI wants is for simple models to not work reliably, so you have to use their giant models even on dumb questions. Pushback on this will come from Google, which has to have a tier-type system to cope with their volume of queries, most of which are dumb.

ltbarcly3 2y ago

OpenAI isn't even close to a monopoly, and if it did it has none of the structural advantages that a financial network has to allow it to defend a monopoly. What a manifestly and obviously stupid article. If you set up a financial network, you have to get a little box (often physical) in some saturation level of stores and gas stations and websites so that people will want a card that works on your network in the first place. Once you achieve saturation in both retailers and consumers, it becomes almost impossible for someone to build a competitor because nobody wants to invest to be able to accept a card nobody has, and nobody wants a card you can't use at the stores they want to shop at. There is a fundamental network effect that reinforces this monopoly. OpenAI has literally none of these advantages. In fact it's the opposite, I think OpenAI has no defense as soon as better models come along. They've lost all of their best engineers already and that trend seems to be accelerating. Their new models don't work and are years behind, and meanwhile Anthropic and others are just as good if not better for most use cases.

lxdlam 2y ago

From my very own perspective, to compare OpenAI with any others is meaningless: AI is far different in terms of resources and business models, maybe similar to some others, but it may collapse or have the rug pulled out by another significant technology evolution, e.g., quantum computer which may ridiculously speed up the training, or a more self-update-friendly model architecture. To the rest of us, training a usable model these days is relatively affordable, and it seems to make no difference to use a "most intelligent" model against a subtly small model. The current business blocker is to find the application fields that work for models, which is not an area where OpenAI has an advantage.

ein0p 2y ago

Even ignoring Altman's beef with Elon, it's going to be extremely difficult for him to "butter up" the Trump administration: https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=sam+altman&contributor_employer=OpenAI&two_year_transaction_period=2024&min_date=01%2F01%2F2023&max_date=12%2F31%2F2024 https://www.fec.gov/data/receipts/individual-contributions/?...

kidneystereotyp 2y ago

unrelated but would be cool to get backstory behind blog names lol