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It's OpenAI's world, we're just living in it
- FfejL 1y ago"[Microsoft's] platform power didn’t just come from controlling applications on top of Windows, but the OEM ecosystem underneath. If OpenAI builds AI for everyone, then they are positioned to extract margin from companies up-and-down the stack — even Nvidia. " Ah yes, the ChromeOS strategy. How'd that work out for Google? Building a platform is good, a way to make quite a bit of money. It's worked really well for Google and Apple on phones (as Ben notes). But there's a reason it didn't happen for Google on PCs. Find it hard to believe it will for OpenAI. They don't (and can not) control the underlying hardware.
- FinnLobsien 1y agoThe question is to what degree that matters - if this power applies anywhere you can access ChatGPT (which is anything with a web browser), do you actually need to control the hardware?
- consumer451 1y agoThe counter argument, saying that it’s likely going to be Google, appears in the latest Acquired.fm podcast. They’re the only AI lab with their own silicon. Edit: they didn’t say “likely,” they just marveled at the talent + data + TPU + global data centers + not needing external investment. If I recall correctly, their theory was that google could deliver tokens cheaper than anyone else.
- pjmlp 1y agoIt worked great, Web is ChromeOS Platform for all practical purposes, with Firefox meagre 3%, and Safari only being relevant thanks to iOS, and the whole Electron crap as "native apps".
- deleted 1y ago[deleted]
- saghm 1y agoI don't think that this is true in terms of being able to extract profits from the OEMs underneath, which is what the parent commenter quoted from the article. I don't think this refutes their response as much as it's a different point than the one they were responding to.
- jay_kyburz 1y agoWhats more, every single child here in Australia is learning on a school issued Chrome Book. To my kids, a spread sheet is google sheets and a power point is google slides. (We were joking about it just last week because my partner asked my eldest what was the Power Point he was working on and he said, "Whats Power Point?")
- georgebcrawford 1y ago> every single child here in Australia is learning on a school issued Chrome Book Many? Most? Possibly, but absolutely not every single one.
- kllrnohj 1y ago> Ah yes, the ChromeOS strategy. How'd that work out for Google? They dominate the EDU market?
- saghm 1y agoIf OpenAI is only able to dominate a market the size of this, I don't think it's their world that we're all living in
- nakamoto_damacy 1y agoWhenever I see a post at #1 with not comment, I know it's been artificially pumped to the top. So many people upvoted but not a single comment yet. Let there be some comments! lol. OpenAI is a geopolitically important play besides being a tech startup so it gets pumped in funding and in PR, to show that we're still leading the world. But that premise is largely hallucinated.
- tallowen 1y agoI had a different takeaway - that a lot of folks on here read Ben Thomson and respect his work! It sounds like Ben is pretty bullish on OpenAI and maybe he's convinced folks through his work to agree with this take.
- shahahmed 1y agoyeah something tells me Ben does not care about being #1 on hn
- jabroni_salad 1y agoI do like stratechery but this is a roundup newsletter and not an article. If the HN thread gets engagement it will likely be based on the headline and not any of the articles in the roundup.
- nakamoto_damacy 1y agoI don't even know who "Ben" is...
- pixl97 1y agoAnecdotes are only a datapoint and nearly meaningless by themselves. For a great many others just the stratechery.com website alone is enough to get a view and an upvote.
- nakamoto_damacy 1y agoAre you sure Ben is not getting paid $7,000 per post by OpenAI?
- mimyimytmi 1y ago[dead]
- kllrnohj 1y agoPlatforms usually deliver significant value that is hard to replicate. OpenAI doesn't have any such thing. It's trivially replaced, and there's many competitors already. OpenAI is ahead of the curve, but they don't seem to have any particular way to do sticky capture. Migrating to a different LLM is an afternoon's work at most, not nearly the complexity of porting an app between OS' or creating a robust hardware driver model.
- barrenko 1y agoYou could say the same thing about Facebook...
- wahnfrieden 1y agoNot at all, because it is not easy to replicate and move its social graph
- pixl97 1y agoI mean, technically no, FB has a network effect of the other people on it either being the people you want to talk to, or the people you want to advertise to.
- warkdarrior 1y agoFB has network effects (your friends/neighbors/etc are there). When I use ChatGPT, I don't care whether anyone else uses it as well.
- chmod775 1y agoYou mean the social network that is currently dying the same death as countless other platforms before it, just on a larger scale? Maybe some are too young to remember the great migrations from/to MySpace, MSN, ICQ, AIM, Skype, local alternatives like StudiVZ, ..., where people used to keep in contact with friends. Facebook was just the latest and largest platform where people kept in touch and expressed themselves in some way. People adding each other on Facebook before others to keep in touch hasn't been a thing for 5 years. It's Instagram, Discord, and WhatsApp nowadays depending on your social circle (two of which Meta wisely bought because they saw the writing on the wall). If I open Facebook nowadays, then out of ~130 people I used to keep in touch with through that platform, pretty much nobody is still doing anything on there. The only sign of life will be some people showing as online because they've the facebook app installed to use direct messaging. No, people easily migrate between these platforms. All it takes is put your new handles (discord ID/phone number/etc) as a sticky so people know where to find you. And especially children will always use whichever platform their parents don't. Small caveat: This is a German perspective. I don't doubt there's some countries where Facebook is still doing well.
- hn_throw_bs 1y agoCan someone elucidate us as to how so many platforms (ChatGPT, Gemini, Claude, etc etc) all sprung up so quickly? How did the engineering teams immediately know how to go about doing this kind of tech with LLMs and DNNs and whatnot?
- nemomarx 1y agoWas it that quickly? GPT 3 is where I would kind of put the start of this and that was in 2020, they had to work on the technology for quite a while before it got like this. Everyone else has been able to follow their progress and see what works.
- dantyti 1y agoGPT 2 didn't have a chat interface but had made a splash in some circles (think spam-adjacent). Edit: mixed up my dates claiming DALL E came out before GPT 3
- beeflet 1y agoI remember subredditsimulator was big (based on GPT and GPT2), but there was some confusion because no one could get ahold of these models
- warkdarrior 1y ago"so quickly" meaning over the last 3 years? (ChatGPT was launched in Nov 2022)
- icyfox 1y agoAll of the products you mention already had research teams (in the case of ChatGPT and Claude that actually predated most of their engineers). So knowing how to build small language models was always in their wheel house. Scaling up to larger LLMs required a few algorithmic advancements but for the most part it was a question of sourcing more data and more compute. The remarkable part of transformers is their scaling laws, which let us achieve much better models without having to reinvent new architecture.
- aaa_aaa 1y agoOpenai is an artificially and ridiculously inflated balloon. It has nothing except initial market capture with hype. But yes they will keep whipping investors and keep burning money.
- wahnfrieden 1y agoThey also have the leading model.
- nicce 1y agoIn which area?
- dantyti 1y agoI'd assume active user count
- throwboy1119 1y agohype
- thiago_fm 1y agoWhich model? Sonnet 4.5 DESTROYS anything OpenAI has for coding.
- wahnfrieden 1y ago5-pro and 5-codex-high
- mips_avatar 1y agoI wonder if OpenAI's app platform is going to be more like Windows (most economic value goes to user and app partners) or like Facebook (most economic value goes to facebook, app makers get screwed. I mean Microsoft acted badly towards a lot of partners, but it was a true platform.
- cj 1y agoOr like Apple. Mix of both, except they take the best ideas and bring them in house (and occasionally use proprietary APIs to do things others can’t)
- sergiotapia 1y agoOpenAI doesn't have a moat unfortunately. One URL replacement away and you can switch most models in minutes. I have personally done this many times over the last year and a half. It only takes labs to produce better and better models, and the race to bottom on token costs.
- alonmower 1y agoyou could say the same thing about a search engine. if they keep an edge on brand or quality they can find ways of monetizing that attention
- nemomarx 1y agoHonestly how google maintains a "moat" over other search engines could use a good business study. They've defied some pretty serious competitors there without an obvious lock in or anything. (You can say default in various browsers and a phone OS and that's probably the main component but it's not clear changing that default would let Bing win or etc.)
- sumedh 1y ago> OpenAI doesn't have a moat unfortunately. The moat is the branding, for most people AI means ChatGpt.
- zkmon 1y agoI think platform monopolies are a thing of the past, where, when most of the world was asleep, a few silicon valley garage companies took over the green field and locked-in a huge customer base irreversibly, thus colonizing the world. The world is now much more awake and connected, ruling out any concentration of dominance. You can't have a repeat of colonial times.
- yalogin 1y agoI am not sure about this. They definitely created a brand new service and data flows that didn’t exist before and they have the majority of the mind share, however it’s already commoditized. The next two to three years will show how the chips fall. I can see that it’s tough or almost impossible for apple to get a share in this but google is right there to take the consumer side. For enterprise again we have to wait and see how gcp and AWS do. The value is not in the llm but vertical integration and providing value. OpenAI has identified this and is doing is vertical integration in a hurry. If the revenue sustains it will be because of that. For consumer space again, nvidia is better positioned with their chips and SoCs but OpenAI is not a sure thing yet. By that I don’t mean they are going to fall apart, they will continue to make a large amount fmloney but whether it’s their world or not is still up in the air.
- ryukoposting 1y ago> The value is not in the llm but vertical integration and providing value. The irony being that LLMs are particularly good at writing the web frontend code, lowering the technical barrier to entry for competitors.
- irl_zebra 1y agoI'm on the verge of unsubscribing from Stratechery. The last month has been a bunch of fawning over Meta, YouTube, and constant talk about and fawning over OpenAI and whatever latest models are coming out. It's kind of tiring and boring. I swear I heard them talk about some YouTube influencers event like five times across their different shows and across time. Like, I do not care at all.
- Multiplayer 1y agoDid you listen to the recent interview with Ben Bajarin? I thought that interview alone justified the subscription. Curious as to whether anyone else felt the same.
- graeme 1y agoFantastic interview. Hard to get much info from inside the world Bajarin was speaking of. Notable how everyone is saying they can't get capacity for the tokens they're trying to serve.
- roxolotl 1y agoIs this fawning or just reflecting reality? I’m generally in the “LLMs kinda suck camp” and I read the headline and thought “yep 100%”. OpenAI is able to raise and deploy insane amounts of capital on a whim. Regardless of that being a good or bad thing it’s still true.
- mooglevich 1y agoAs a longtime loyal subscriber to Stratechery... I kinda agree. But as the other commenters did point out, this does reflect how the market seems to feel about OpenAI, at least. (Meta - I'm less sure of; Thompson does fawn over Meta quite a bit, I personally think it's too much and seems to not fully reflect reality, but man do they really cane it when you see their usage numbers, so maybe he's right.) I did think his GPT-5 commentary was good, insofar as picking up the nuance of why it's actually better than the immediate reactions I, at least, saw in the headlines. Where I do agree with you is how Stratechery's getting a little oversaturated. I'm happy Ben Thompson is building a mini media empire, but I might have liked it more when it was just a simple newsletter that I got in my inbox, rather than pods, YouTube videos, and expanding to include other tech/news doyens. Maybe I'm just a tech media hipster lol.
- Multiplayer 1y agoThe current AI wave has been compared (by sama) to electricity and sometimes transistors. AI is just going to be in all the products. The trillion dollar question is: Do you care what kind of electricity you are using? So, will you care what kind of AI you are using. In the last few interviews with him I have listened to he has said that what he wants is "your ai" that knows you, everywhere that you are. So his game is "Switching Costs" based on your own data. So he's making a device, etc etc. Switching costs are a terrific moat in many circumstances and requires a 10x product (or whatever) to get you to cross over. Claude Code was easily a 5x product for me, but I do think GPT5 is doing a better job on just "remembering personal details" and it's compelling. I do not think that apps inside chatgpt matters to me at all and I think it will go the way of all the other "super app" ambitions openai has.
- visarga 1y ago> I do think GPT5 is doing a better job on just "remembering personal details" and it's compelling. Today I asked GPT5 to extract a transcript of all my messages in the conversation and it hallucinated messages from a previous conversation, maybe leaked through the memory system. It cannot tell the difference. Indiscriminate learning and use of memory system is a risk.
- anthonypasq 1y agoI mean don't you think this is is more analogous to the introduction of computing than electricity? If you told people in 1960 that there would be supercomputers inside people's refrigerators do you think they would have believed you? And most people actually don't care what CPU they have in their laptop (enthusiasts still do which i think continues to match the analogy), they care more about the OS (chatGPT app vs gemini etc).
- random9749832 1y ago>The current AI wave has been compared (by sama) to electricity and sometimes transistors. AI is just going to be in all the products. Sorry, but you have to be beyond thick to believe any of this.
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- bgwalter 1y agoStratechery has always been shallow, but these overt advertisements are disturbing: - Sneaking in how someone went from a Sora skeptic to a purported creator within a week. - Calling the result the "future of creation". - Titling the advertisement "It’s OpenAI’s World, We’re Just Living in It". What they are doing here is to pitch Sora to attention deficit teenagers in order to have yet another way to make the hair of the favorite content creator red. As if that didn't already exist.
- thiago_fm 1y agoThe victory lap from Sam Altman and all the money being raised makes people forget the following: - Open source LLM models at most 12 months behind ChatGPT/Gemini; - Gemini from Google is just as good, also much cheaper. For both Google and the users, as they make their own TPU; - Coding. OpenAI has nothing like Sonnet 4.5 They look like they invested billions to do research for competitors, which have already taken most of their lunch. Now with the Sora 2 App, they are just burning more and more cash, so people watch those generated videos in Tiktok and Youtube. I find it hilarious all the big talk. I hope I get proven wrong, but they seem to be getting wrecked by competitors.
- karel-3d 1y agoI don't like Ed Zitron automatic dismissal of everything AI and the constant profanities in his writing are getting old, and it's usually not very well structured, but that said... I like the perspective he has about the money involved. https://www.wheresyoured.at/the-case-against-generative-ai/ https://www.wheresyoured.at/the-case-against-generative-ai/ OpenAI needs 1 trillion dollars in next four years just to keep existing. That's more than all currently available capital, together, from all private equity. If you take all private equity together, it still won't be enough for OpenAI in next four years. It's just staggering amount of money that the world needs to bet on OpenAI.
- aiiizzz 1y agoThe openai bet goes "within 4 years, we need to be able to tell the AI to make money for us." Are they on track?
- rcxdude 1y agoThere's another important bit there: 'we need to be able to tell the AI to make money for us and no-one else can compete with us on that'. I think both halves of that are questionable.
- whaleofatw2022 1y agoI mean FWIW they could probably make those folks happy by just spitting out a list of everything to short because of ai disruption on each new release lol
- sixtyj 1y agoNot sure. https://youtu.be/OYlQyPo-L4g https://youtu.be/OYlQyPo-L4g From 7th minute, truth about ChatGPT - 2% paid users.
- rhetocj23 1y agoYeah the conversion rate is poor and its demand is not price inelastic, I would argue for many individuals demand is very price elastic.
- sublimefire 1y agoThe question is if the company can add more value to the models than someone else. I still see a lot of gaps in the ecosystem, eg evaluation/testing systems and integrations beyond chat interface and active control to get good results, not to mention other types of models that deal with 3d world or temporal data. There is an opportunity for an outsider to come and grab parts of the pie whilst the biggest are competing. They do look like trying to grab the market with tooling but if you can use their tools (oss) and switch the models then where is the moat?
- I_complete_me 1y agoMay I interject with my pathetic attempt at a Classification of Intelligences ala Linnaeus Pre-AI :: Examples :: Timeline --------------------------------------------------------------------- NHI Non-human Intelligence :: e.g. dolphins, apes, crows etc. :: millions of years HI Human Intelligence :: e.g. Einstein, Trump, Confuscius, Homer :: thousands of years Post-AI --------------------------------------------------------------------- AI Artificial Intelligence :: ChatGTP, Gemini, many others :: countable months AGI :: Artificial General Intelligence ; not there yet; :: zero AIApHI AI Assisted/Approved/Audited Human Intelligence :: See AI :: countable months HIApAI Human Intelligence Assisted/Approved/Audited AI :: The Future? :: zero I have mentioned no individuals here to avoid legal action. My point on AI is ... wait and see. Chill.
- AfterHIA 1y agoMy feeling is that the tech industry has been in, "hot water" since at least 2018 and has been using private equity and bullshit hype-trains to garner interest in new technologies in lieu of the public getting hip to the fact that mostly computers are spying on you, making you mentally ill, and stealing your data in exchange for, "being able to participate." As pointed out by others OpenAI and the rest of the AI ecosystem will need a financial miracle to stay afloat and offer their products for a competitive price. There's so much of what, "AI" is becoming that just seems like a massive psy-op to breathe one last breath of life into what is the skeleton of the old Silicon Valley. Innovation is possible but if the future really is liberal authoritarianism/oligarchy there's no room in the contrived market for, "innovative products that greatly improve human life." There's hope in: https://worrydream.com/ https://worrydream.com/
- ramon156 1y agoI mean we transitioned from the product to the brand, with no reason to. Soon it will just flow back into a product. I don't care if a Samsung fridge has gemini GPT or openai GPT, as long as it works
- charles_f 1y agoI don't understand the link between the title of the article, and its content. If I summarize their three points: 1. Corporate strategy of OpenAI is becoming a monopole 2. OpenAI is investing in infrastructure because they think they'll have lots of users in the future 3. Making videos on Sora is fun, and people are gonna post more of these. How does that substantiate "we live in OpenAI's world"? Am I missing something?
- hoppp 1y agoI doubt it They made 4.1 billion in revenue and had a loss of 13 billion last quarter on their Ai offering. They are not profitable