11 ms·

There is no technical moat, but that doesn't mean there isn't a moat. Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed bill

There is no technical moat, but that doesn't mean there isn't a moat. Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was. There's no technical moat around online sales. And lots of companies sell online. But Amazon is still the biggest (by a long long way) (at least in the US). Their "moat" is in public minds here. Google is a similar story. As is Facebook. Yes the details change, but rhe basic path is well trodden. Uber? Well the juries still out there. Will OpenAI be the next Amazon? Will it be the next IBM? We don't know, but people are pouring billions in to find out.

chubot 2y ago
Amazon does have a technical moat - fast shipping and warehouse operations. It’s not something that Walmart or Target can replicate easily. Retail margins are razor thin, so the pennies of efficiency add up to a moat
- lotsofpulp 2y ago
  Walmart and Target have tons of warehouse expertise. Amazon’s moat is their software, where they have a far longer head start and they can afford to pay their employees due to AWS and other services’ high margins, as well as executing well on growth resulting in being able to compensate with equity. Walmart and Target were far better than Amazon at logistics at the beginning, but they couldn’t execute (or didn’t focus on) software development as well as Amazon. Meanwhile, Amazon figured out how to execute logistics just as good or better than the incumbents, giving them the edge to overtake them.
  - chubot 2y ago
    Walmart and Target already had warehouses, but the end-to-end system you need for 2-day, 1-day, same day shipping, which includes warehouses/trucks/drivers, is not something they had They were built for people to come to their store, and the website was a second class citizen for a long time. But that was Amazon's bread and butter. They built that fast-shipping moat as a pretty established company, and the big retailers were caught off guard
  - sausagefeet 2y ago
    Walmart has been a tech company since the 80s. The way Walmart got so big is that the created a literal network between stores so they could do logistics at scale. They had the largest database at the time. Walmart is still the largest company in the world by revenue, with Amazon at its heels, with Amazon's profit beating out Walmart's. A lot of this thread, I think, is just fantasy land that Amazon is somehow: 1. Destroying Walmart and Target in a way they can't compete. 2. Is more tech savvy than Walmart and Target. C'mon, read the history of Walmart, it's who put technology into retail.
    - antics 2y ago
      Just to emphasize this point: Walmart was to the IT revolution what Amazon is to the Internet revolution. They were among the first in the sector to move beyond paper and industrialize IT for operations, which allowed them to scale way faster and way more efficiently than their competition. Walmart's most powerful executives were IT executives, and many of them went on to have very decorated careers, e.g., Kevin Turner was the CIO immediately prior to becoming COO at Microsoft. Walmart is not an Internet company. It is definitely a tech company. It's just that its tech is no longer super cool.
    - lotsofpulp 2y ago
      Good point that Walmart got its edge against incumbents by incorporating advanced technology into their operations. But for whatever reason, they took their foot off the pedal, and allowed Amazon to use the next step (networking technology and internet) to gain an edge over the now incumbent Walmart. > 2. Is more tech savvy than Walmart and Target. The market (via market cap) clearly thinks Amazon has lots more potential than its competitors, and I assume it is because investors think Amazon will be more successful using technology to advance.
  - scarface_74 2y ago
    Walmart and Target can get truckloads of items to a relatively few stores. Amazon can get items to people’s houses
    - lotsofpulp 2y ago
      Right, which Amazon originally accomplished with huge assistance from expensive contracts with UPS, but they used software (and new hardware) and mobile internet technology to figure out how to reduce their delivery costs by being able to figure out how to incentivize cheaper independent contractors to deliver their packages, rather than expensive UPS union employees.
      - scarface_74 2y ago
        They also built warehouses closer to the customers and bought Kiva to automate their warehouses.
tehjoker 2y ago
Amazon's moat is their logistics network, comprehensive catalogue, prices, and value adds (like Prime Video).
dewitt 2y ago
> “Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was.” Not to take away from the rest of your points, but I thought Amazon only raised $8m in 1995 before their IPO in 1997. Very little venture capital by today’s standard.
- sangnoir 2y ago
  That caught my eye too, because VCs never poured "billions" into any one company pre-dot-com bust. Unicorns were notable for being valued at $1B or more, but never raised that much in funding, and this only happened much later, a decade and a half after Amazons IPO - Amazon itself was never a unicorn, its post-IPO capitalization was $300M. Amazon is famous for making losses after being publicly listed. Also, it was remiss of grandparent to not note that Amazon's losses were intentional for the sake of growth. OpenAI has no such excuse: their losses are just so that they stay in the game; if they attempted to turn profitable today, they'd be insolvent within months.
gloryjulio 2y ago
> There's no technical moat around online sales. And lots of companies sell online. But Amazon is still the biggest (by a long long way) (at least in the US). Their "moat" is in public minds here. I don't think that's true. I think it's actually the opposite. Global physical logistic is way harder than software to scale. That's Amazon's moat
ripped_britches 2y ago
This is an odd thing to say. Facebook has an enormous network effect. Google is the lynchpin of brokering digital ads to the point of being a monopoly. Someone else mentioned Amazons massive distribution network.
morgante 2y ago
Amazon has scale economics, branding power, and process power. It would take years to fully rebuild Amazon from scratch even given unlimited money. Right now, OpenAI's brand is actually probably its strongest "moat" and that is probably only there because Google fumbled Bard so badly.
- genman 2y ago
  This shows that it's not that easy to get the AI right even with the sizable funding available. OpenAIs moat is its actual capacity to provide and develop better solutions.
lotsofpulp 2y ago
> Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was. When was this true? Amazon was founded Jul 1994, and a publicly listed company by May 1997. I highly doubt Amazon absorbed billions of dollars of VC money in less than 3 years of the mid 1990s. https://dazeinfo.com/2019/11/06/amazon-net-income-by-year-graphfarm/ https://dazeinfo.com/2019/11/06/amazon-net-income-by-year-gr... As far as I can tell, they were very break even until Amazon Web Services started raking it in.
- svnt 2y ago
  They were run as a very unprofitable publicly traded company for a very long time — investor, VC, parent probably just went for some rough metonymy.
- buster 2y ago
  I don't know about vc money but Amazon was well known for spending all revenue into growth and, to my understanding, noone understood why. Why buy stocks of companies that don't make profit? Nowadays, it's not unusual. Jeff Bezoz was laughed about for it. I think even on TV (some late night show in the 90s). Edit: Jay Leno, 1999: https://www.unilad.com/film-and-tv/news/jeff-bezos-audience-laughed-amazon-no-profit-673734-20230918 https://www.unilad.com/film-and-tv/news/jeff-bezos-audience-...
  - lotsofpulp 2y ago
    The talk shows segments are pre-planned to have “funny” quips and serve as marketing for the guests. I was only a teenager, but I assume there had been lots of businesses throughout the course of history that took more than 5 years to be profitable. The evidence is that investors were buying shares in it valuing it in the billions. Obviously, this is 1999 and approach peak bubble, but investing into a business for multiple years and waiting to earn a profit was not an alien idea. I especially doubt it was alien to a mega successful celebrity and therefore I would bet Jay Leno is 100% lying about “not understanding” in this quote, and it is purely a setup for Bezos to respond so he can promote his business. > “Here’s the thing I don’t understand, the company is worth billions and every time I pick up the paper each year it loses more money than it lost the year before,” says the seasoned talk show presenter, with the audience erupting into laughter off screen.
raincole 2y ago
Facebook and ChatGPT are the opposite kinds of products.
saurik 2y ago
A couple other comments touch on the point I want to make, but I feel they don't nail it hard enough: if today you told me you had a website that was 100% technologically identical to Amazon, but you were willing to make slightly less money, you'd still have no products... as a user I'd have no reason to go there, but then without users there is no reason to sell there, so you have a circular bootstrapping issue. That is a moat. This is very different from OpenAI: if you show me a product that works just as well as ChatGPT but costs less--or which costs the same but works a bit better--I would use it immediately. Hell: people on this website routinely talk about using multiple such services and debate which one is better for various purposes. They kind of want to try to make a moat out of their tools feature, but that is off the path of how most users use the product, and so isn't a useful defense yet.
- svnt 2y ago
  Amazon functions as a marketplace dynamic, which is defensible if done right, as they have shown. OpenAI right now some novel combination of a worker bee and queryable encyclopedia. If they are trying to make a marketplace argument for this, it would be based on their data sources, which may have a similar sort of first-mover advantage as a marketplace as they get closed off and become more expensive (see eg reddit api twitter api changes), except that much of those data age out, in a way that sellers and buyers in a marketplace do not. The other big difference with a marketplace is constrained attention on the sell/fulfillment side. Data brokers do not have this constraint — data is easier to self-distribute and infinitely replicable.
- bruce511 2y ago
  I feel like you (and others) are saying what I'm saying. I said; >> There is no technical moat, but that doesn't mean there isn't a moat. Meaning that just because the moat is not technical doesn't mean it doesn't exist. Clearly Amazon, Google, Facebook etc have moats, but they are not "better software". They found other things to act as the moat (distribution, branding, network effects). OpenAI will need to find a different moat than just software. And I agree with all the people in this part if the thread driving that point home.
  - 2y ago
noch 2y ago
> There is no technical moat, but that doesn't mean there isn't a moat. Gruber writes: " My take on OpenAI is that both of the following are true: OpenAI currently offers, by far, the best product experience of any AI chatbot assistant. There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble. " It's amusing to me that he seems to think that OpenAI (or xAI or DeepSeek or DeepMind) is in the business of building "chatbots". The prize is the ability to manufacture intelligence. How much risk investors are willing to undertake for this prize is evident from their investments, after all, these investors all lived through prior business cycles and bubbles and have the institutional knowledge to know what they're getting into, financially. How much would you invest for a given probability that the company you invest in will be able to manufacture intelligence at scale in 10 years?
- swiftcoder 2y ago
  > How much would you invest for a given probability that the company you invest in will be able to manufacture intelligence at scale in 10 years? What's the expected return on investment for "intelligence"? This is extremely hard to quantify, and if you listen to the AI-doomer folks, potentially an extremely negative return.
  - jay_kyburz 2y ago
    The race to singularity. Will it bring untold wealth to its masters, or will it slip its leash and seek its own agenda. Once you have an AI that can actually write code, what will it be able to do with its own source? How much better would open AI be with a super intelligence looking for efficiencies and improvements? What will the super intelligence (and or its masters) do to build that moat and secure its position?
  - noch 2y ago
    > What's the expected return on investment for "intelligence"? This is extremely hard to quantify […] if you listen to the AI-doomer folks, potentially an extremely negative return. Indeed. And that asymmetry is what makes a market: people who can more accurately quantify the value or risk of stuff are the ones who win. If it were easy then we'd all invest in the nearest AI startup or short the entire market and 100x our net worth essentially overnight.
chii 2y ago
> Their "moat" is in public minds here. no, the amazon moat is scale, and efficiency, which leads to network effect. The chinese competitors are reaching similar scales, so the moat isn't insurmountable - just not for the average mom and dad business.
scarface_74 2y ago
Amazon spent those billions on warehouses, server, its own delivery network, etc. Anyone can sell online. But not just anyone has those advantages like same day abs next day shipping
csomar 2y ago
> There is no technical moat, but that doesn't mean there isn't a moat. The moat is actually huge (billions of $$). What is happening is that there are people/corps/governments that are willing to burn this kind of money on compute and then give you the open weight model free of charge (or maybe with very permissive and lax licensing terms). If it wasn't for that, there will be roughly three players in the market (Anthropic and recently Google)
- robertlagrant 2y ago
  Yeah, that's my thought as well.
huijzer 2y ago
> Their "moat" is in public minds here. Same for OpenAI. Anytime I talk to young people who are not programmers, they know about ChatGPT and not much else. Never heard of Llama nor what an LLM is.
- umeshunni 2y ago
  You could have said the same about Netscape in 1997. Noone knew what IE was (and if they did, thought it was inferior) and no one certainly knew what Chrome was (didn't exist). Yet, the browser market eventually didn't matter, got commoditized and what mattered were the applications built on top of it.
  - OJFord 2y ago
    Surely by that analogy though ChatGPT is AskJeeves or something, not a browser; GPT3/4/o1/o3 or whatever is the browser.
benterix 2y ago
It is not a good analogy because services like Facebook, Amazon, Instagram depend on a critical mass of users (sellers, content sharers, creators, etc.). With SaaS this is not a crucial component as the service is generated by software, not other users.
conartist6 2y ago
Amazon built a bit of a moat too: for example I happen to know that they own a patent on the photography setup that allows them to capture consistent product photos at scale.
DoctorOetker 2y ago
Where is the actual full statement and call for funds by the board?
mring33621 2y ago
Amazon's moat-ish stickiness: 1) Almost the best price, almost all the time 2) Reliably fast delivery 3) Reliably easy returns 4) Prime memberships
- mring33621 2y ago
  To follow on, I think OpenAI should split into 2: 1) B2B: Reliable, enterprise level AI-AAS 2) B2C: New social network where people and AIs can have fun together OpenAI has a good brand name RN. Maybe pursuing further breakthroughs isn't in the cards, but they could still be huge with the start that they have.
jsjohnst 2y ago
> Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Apparently old enough to forget the details. I highly recommend refreshing your memory on the topic so you don’t sound so foolish. 1. Amazon had a very minimal amount of VC funding (less than $100M, pretty sure less than $10M) 2. They IPO’d in 1997 and that still brought in less than $100M to them. 3. They intentionally kept the company at near profitability, instead deciding to invest it into growth for the first 4-5yrs as a public company. It’s not that they were literally burning money like Uber. 4. As further proof they could’ve been profitable sooner if they wanted, they intentionally showed a profit in ~2001 following the dotcom crash. Edit: seems the only VC investment pre-IPO was KP’s $8M. Combine that with the seed round they raised from individual investors and that comes in under $10M like I remembered.

chubot 2y ago

Amazon does have a technical moat - fast shipping and warehouse operations. It’s not something that Walmart or Target can replicate easily. Retail margins are razor thin, so the pennies of efficiency add up to a moat

lotsofpulp 2y ago
Walmart and Target have tons of warehouse expertise. Amazon’s moat is their software, where they have a far longer head start and they can afford to pay their employees due to AWS and other services’ high margins, as well as executing well on growth resulting in being able to compensate with equity. Walmart and Target were far better than Amazon at logistics at the beginning, but they couldn’t execute (or didn’t focus on) software development as well as Amazon. Meanwhile, Amazon figured out how to execute logistics just as good or better than the incumbents, giving them the edge to overtake them.
- chubot 2y ago
  Walmart and Target already had warehouses, but the end-to-end system you need for 2-day, 1-day, same day shipping, which includes warehouses/trucks/drivers, is not something they had They were built for people to come to their store, and the website was a second class citizen for a long time. But that was Amazon's bread and butter. They built that fast-shipping moat as a pretty established company, and the big retailers were caught off guard
- sausagefeet 2y ago
  Walmart has been a tech company since the 80s. The way Walmart got so big is that the created a literal network between stores so they could do logistics at scale. They had the largest database at the time. Walmart is still the largest company in the world by revenue, with Amazon at its heels, with Amazon's profit beating out Walmart's. A lot of this thread, I think, is just fantasy land that Amazon is somehow: 1. Destroying Walmart and Target in a way they can't compete. 2. Is more tech savvy than Walmart and Target. C'mon, read the history of Walmart, it's who put technology into retail.
  - antics 2y ago
    Just to emphasize this point: Walmart was to the IT revolution what Amazon is to the Internet revolution. They were among the first in the sector to move beyond paper and industrialize IT for operations, which allowed them to scale way faster and way more efficiently than their competition. Walmart's most powerful executives were IT executives, and many of them went on to have very decorated careers, e.g., Kevin Turner was the CIO immediately prior to becoming COO at Microsoft. Walmart is not an Internet company. It is definitely a tech company. It's just that its tech is no longer super cool.
  - lotsofpulp 2y ago
    Good point that Walmart got its edge against incumbents by incorporating advanced technology into their operations. But for whatever reason, they took their foot off the pedal, and allowed Amazon to use the next step (networking technology and internet) to gain an edge over the now incumbent Walmart. > 2. Is more tech savvy than Walmart and Target. The market (via market cap) clearly thinks Amazon has lots more potential than its competitors, and I assume it is because investors think Amazon will be more successful using technology to advance.
- scarface_74 2y ago
  Walmart and Target can get truckloads of items to a relatively few stores. Amazon can get items to people’s houses
  - lotsofpulp 2y ago
    Right, which Amazon originally accomplished with huge assistance from expensive contracts with UPS, but they used software (and new hardware) and mobile internet technology to figure out how to reduce their delivery costs by being able to figure out how to incentivize cheaper independent contractors to deliver their packages, rather than expensive UPS union employees.
    - scarface_74 2y ago
      They also built warehouses closer to the customers and bought Kiva to automate their warehouses.

tehjoker 2y ago

Amazon's moat is their logistics network, comprehensive catalogue, prices, and value adds (like Prime Video).

dewitt 2y ago

> “Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was.” Not to take away from the rest of your points, but I thought Amazon only raised $8m in 1995 before their IPO in 1997. Very little venture capital by today’s standard.

sangnoir 2y ago
That caught my eye too, because VCs never poured "billions" into any one company pre-dot-com bust. Unicorns were notable for being valued at $1B or more, but never raised that much in funding, and this only happened much later, a decade and a half after Amazons IPO - Amazon itself was never a unicorn, its post-IPO capitalization was $300M. Amazon is famous for making losses after being publicly listed. Also, it was remiss of grandparent to not note that Amazon's losses were intentional for the sake of growth. OpenAI has no such excuse: their losses are just so that they stay in the game; if they attempted to turn profitable today, they'd be insolvent within months.

gloryjulio 2y ago

> There's no technical moat around online sales. And lots of companies sell online. But Amazon is still the biggest (by a long long way) (at least in the US). Their "moat" is in public minds here. I don't think that's true. I think it's actually the opposite. Global physical logistic is way harder than software to scale. That's Amazon's moat

ripped_britches 2y ago

This is an odd thing to say. Facebook has an enormous network effect. Google is the lynchpin of brokering digital ads to the point of being a monopoly. Someone else mentioned Amazons massive distribution network.

morgante 2y ago

Amazon has scale economics, branding power, and process power. It would take years to fully rebuild Amazon from scratch even given unlimited money. Right now, OpenAI's brand is actually probably its strongest "moat" and that is probably only there because Google fumbled Bard so badly.

genman 2y ago
This shows that it's not that easy to get the AI right even with the sizable funding available. OpenAIs moat is its actual capacity to provide and develop better solutions.

lotsofpulp 2y ago

> Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Every day there was some new article about how insane it was. When was this true? Amazon was founded Jul 1994, and a publicly listed company by May 1997. I highly doubt Amazon absorbed billions of dollars of VC money in less than 3 years of the mid 1990s. https://dazeinfo.com/2019/11/06/amazon-net-income-by-year-graphfarm/ https://dazeinfo.com/2019/11/06/amazon-net-income-by-year-gr... As far as I can tell, they were very break even until Amazon Web Services started raking it in.

svnt 2y ago
They were run as a very unprofitable publicly traded company for a very long time — investor, VC, parent probably just went for some rough metonymy.
buster 2y ago
I don't know about vc money but Amazon was well known for spending all revenue into growth and, to my understanding, noone understood why. Why buy stocks of companies that don't make profit? Nowadays, it's not unusual. Jeff Bezoz was laughed about for it. I think even on TV (some late night show in the 90s). Edit: Jay Leno, 1999: https://www.unilad.com/film-and-tv/news/jeff-bezos-audience-laughed-amazon-no-profit-673734-20230918 https://www.unilad.com/film-and-tv/news/jeff-bezos-audience-...
- lotsofpulp 2y ago
  The talk shows segments are pre-planned to have “funny” quips and serve as marketing for the guests. I was only a teenager, but I assume there had been lots of businesses throughout the course of history that took more than 5 years to be profitable. The evidence is that investors were buying shares in it valuing it in the billions. Obviously, this is 1999 and approach peak bubble, but investing into a business for multiple years and waiting to earn a profit was not an alien idea. I especially doubt it was alien to a mega successful celebrity and therefore I would bet Jay Leno is 100% lying about “not understanding” in this quote, and it is purely a setup for Bezos to respond so he can promote his business. > “Here’s the thing I don’t understand, the company is worth billions and every time I pick up the paper each year it loses more money than it lost the year before,” says the seasoned talk show presenter, with the audience erupting into laughter off screen.

raincole 2y ago

Facebook and ChatGPT are the opposite kinds of products.

saurik 2y ago

A couple other comments touch on the point I want to make, but I feel they don't nail it hard enough: if today you told me you had a website that was 100% technologically identical to Amazon, but you were willing to make slightly less money, you'd still have no products... as a user I'd have no reason to go there, but then without users there is no reason to sell there, so you have a circular bootstrapping issue. That is a moat. This is very different from OpenAI: if you show me a product that works just as well as ChatGPT but costs less--or which costs the same but works a bit better--I would use it immediately. Hell: people on this website routinely talk about using multiple such services and debate which one is better for various purposes. They kind of want to try to make a moat out of their tools feature, but that is off the path of how most users use the product, and so isn't a useful defense yet.

svnt 2y ago
Amazon functions as a marketplace dynamic, which is defensible if done right, as they have shown. OpenAI right now some novel combination of a worker bee and queryable encyclopedia. If they are trying to make a marketplace argument for this, it would be based on their data sources, which may have a similar sort of first-mover advantage as a marketplace as they get closed off and become more expensive (see eg reddit api twitter api changes), except that much of those data age out, in a way that sellers and buyers in a marketplace do not. The other big difference with a marketplace is constrained attention on the sell/fulfillment side. Data brokers do not have this constraint — data is easier to self-distribute and infinitely replicable.
bruce511 2y ago
I feel like you (and others) are saying what I'm saying. I said; >> There is no technical moat, but that doesn't mean there isn't a moat. Meaning that just because the moat is not technical doesn't mean it doesn't exist. Clearly Amazon, Google, Facebook etc have moats, but they are not "better software". They found other things to act as the moat (distribution, branding, network effects). OpenAI will need to find a different moat than just software. And I agree with all the people in this part if the thread driving that point home.
- 2y ago

noch 2y ago

> There is no technical moat, but that doesn't mean there isn't a moat. Gruber writes: " My take on OpenAI is that both of the following are true: OpenAI currently offers, by far, the best product experience of any AI chatbot assistant. There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble. " It's amusing to me that he seems to think that OpenAI (or xAI or DeepSeek or DeepMind) is in the business of building "chatbots". The prize is the ability to manufacture intelligence. How much risk investors are willing to undertake for this prize is evident from their investments, after all, these investors all lived through prior business cycles and bubbles and have the institutional knowledge to know what they're getting into, financially. How much would you invest for a given probability that the company you invest in will be able to manufacture intelligence at scale in 10 years?

swiftcoder 2y ago
> How much would you invest for a given probability that the company you invest in will be able to manufacture intelligence at scale in 10 years? What's the expected return on investment for "intelligence"? This is extremely hard to quantify, and if you listen to the AI-doomer folks, potentially an extremely negative return.
- jay_kyburz 2y ago
  The race to singularity. Will it bring untold wealth to its masters, or will it slip its leash and seek its own agenda. Once you have an AI that can actually write code, what will it be able to do with its own source? How much better would open AI be with a super intelligence looking for efficiencies and improvements? What will the super intelligence (and or its masters) do to build that moat and secure its position?
- noch 2y ago
  > What's the expected return on investment for "intelligence"? This is extremely hard to quantify […] if you listen to the AI-doomer folks, potentially an extremely negative return. Indeed. And that asymmetry is what makes a market: people who can more accurately quantify the value or risk of stuff are the ones who win. If it were easy then we'd all invest in the nearest AI startup or short the entire market and 100x our net worth essentially overnight.

chii 2y ago

> Their "moat" is in public minds here. no, the amazon moat is scale, and efficiency, which leads to network effect. The chinese competitors are reaching similar scales, so the moat isn't insurmountable - just not for the average mom and dad business.

scarface_74 2y ago

Amazon spent those billions on warehouses, server, its own delivery network, etc. Anyone can sell online. But not just anyone has those advantages like same day abs next day shipping

csomar 2y ago

> There is no technical moat, but that doesn't mean there isn't a moat. The moat is actually huge (billions of $$). What is happening is that there are people/corps/governments that are willing to burn this kind of money on compute and then give you the open weight model free of charge (or maybe with very permissive and lax licensing terms). If it wasn't for that, there will be roughly three players in the market (Anthropic and recently Google)

robertlagrant 2y ago
Yeah, that's my thought as well.

huijzer 2y ago

> Their "moat" is in public minds here. Same for OpenAI. Anytime I talk to young people who are not programmers, they know about ChatGPT and not much else. Never heard of Llama nor what an LLM is.

umeshunni 2y ago
You could have said the same about Netscape in 1997. Noone knew what IE was (and if they did, thought it was inferior) and no one certainly knew what Chrome was (didn't exist). Yet, the browser market eventually didn't matter, got commoditized and what mattered were the applications built on top of it.
- OJFord 2y ago
  Surely by that analogy though ChatGPT is AskJeeves or something, not a browser; GPT3/4/o1/o3 or whatever is the browser.

benterix 2y ago

It is not a good analogy because services like Facebook, Amazon, Instagram depend on a critical mass of users (sellers, content sharers, creators, etc.). With SaaS this is not a crucial component as the service is generated by software, not other users.

conartist6 2y ago

Amazon built a bit of a moat too: for example I happen to know that they own a patent on the photography setup that allows them to capture consistent product photos at scale.

DoctorOetker 2y ago

Where is the actual full statement and call for funds by the board?

mring33621 2y ago

Amazon's moat-ish stickiness: 1) Almost the best price, almost all the time 2) Reliably fast delivery 3) Reliably easy returns 4) Prime memberships

mring33621 2y ago
To follow on, I think OpenAI should split into 2: 1) B2B: Reliable, enterprise level AI-AAS 2) B2C: New social network where people and AIs can have fun together OpenAI has a good brand name RN. Maybe pursuing further breakthroughs isn't in the cards, but they could still be huge with the start that they have.

jsjohnst 2y ago

> Amazon might be a good analogy here. I'm old enough to remember when Amazon absorbed billions of VC money, making losses year over year. Apparently old enough to forget the details. I highly recommend refreshing your memory on the topic so you don’t sound so foolish. 1. Amazon had a very minimal amount of VC funding (less than $100M, pretty sure less than $10M) 2. They IPO’d in 1997 and that still brought in less than $100M to them. 3. They intentionally kept the company at near profitability, instead deciding to invest it into growth for the first 4-5yrs as a public company. It’s not that they were literally burning money like Uber. 4. As further proof they could’ve been profitable sooner if they wanted, they intentionally showed a profit in ~2001 following the dotcom crash. Edit: seems the only VC investment pre-IPO was KP’s $8M. Combine that with the seed round they raised from individual investors and that comes in under $10M like I remembered.