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Nah this is a repeat of Google's early days. They built storage at such a scale that it was hard for anyone else to compete in anything that required storage l

by treis 1y ago

Nah this is a repeat of Google's early days. They built storage at such a scale that it was hard for anyone else to compete in anything that required storage like email. OpenAI is doing the same with compute. They're going to have more compute than everyone else combined. It will give them the scale and warchest to drive everyone else out. Every AI company is going to end up being a wrapper around them. And OpenAI will slowly take that value too either via acquisition or cloning successful products.

kilroy123 1y ago
Google, too, has a lot of compute. Not to mention the chips to power the compute.
- pityJuke 1y ago
  And they own the compute, as opposed to renting some of it. And they have the engineers to utilise that compute.
gizajob 1y ago
If only everyone in the world had compute in their pockets or on their desk…
sipjca 1y ago
seems like a flawed assumption when the cost of tokens -> 0
mdasen 1y ago
But is OpenAI building that compute or are they renting it? OpenAI and Anthropic are signing large deals with Google and Amazon for compute resources, but ultimately it means that Google and Amazon will own a ton of compute. Is OpenAI paying Amazon's cap ex just so Amazon can invest and end up owning what OpenAI needs over the long term? For those paying Google, are they giving Google the money Google needs to further invest in their TPUs giving them a huge advantage?
- treis 1y ago
  Practically, it doesn't matter like it didn't matter for Google that storage got many orders of magnitude cheaper. By the time training a novel LLM and serving it to a billion users is trivial in the way that providing 1GB of email storage is today there will be other moats. They'll have decades of user history and a monitization framework that will be hard to overcome. Google is a viable competitor here. Everyone else is missing part of the puzzle. They theoretically could compete but they're behind with no obvious way of catching up. Amazon specifically is in a position similar to where they were with mobile. They put out a competing phone but with no clear advantage it flopped. They could put out their own LLM but they're late. They'd have to put out a product that is better enough to overcome consumer inertia. They have no real edge or advantage over OpenAI/Google to make that happen. Theoretically they could back a competitor like Anthropic but what's the point? They look like an also ran these days and ultimately who wins doesn't affect Amazon's core businesses.
  - esafak 1y ago
    How is Anthropic an also-ran when they lead the enterprise market?
    - dybber 1y ago
      Do they? Doesn’t big corporations just buy CoPilot from Microsoft where they already have a license for Office, Teams, GitHub, Visual Studio, Azure etc.?
      - esafak 1y ago
        By API usage: https://menlovc.com/perspective/2025-mid-year-llm-market-update/ https://menlovc.com/perspective/2025-mid-year-llm-market-upd...
        netdevphoenix 1y ago
        You know Menlo is an Anthropic investor, right? The report is likely biased imo. While I can see Anthropic or any other leading on API usage, it is unlikely that Anthropic leads in terms of raw consumer usage as Microsoft has the Office AI integration market locked down
JimDabell 1y ago
> OpenAI is doing the same with compute. No, it’s Amazon that’s doing this. OpenAI is paying Amazon for the compute services, but it’s Amazon that’s building the capacity.
pphysch 1y ago
Pretty sure this "compute is the new oil" thesis fell flat when OAI failed to deliver on GPT-5 hype, and all the disappointments since. It's still all about the (yet to be collected) data and advancements in architecture, and OAI doesn't have anything substantial there.
- XorNot 1y ago
  It's absolutely no longer about the data. We produce millions of new humans a year who wind up better at reasoning then these models but don't need to read the entire contents of the Internet to do it. A relatively localized, limited lived experience apparently conveys a lot that LLM input does not - there's an architecture problem (or a compute constraint).
  - pphysch 1y ago
    AI having societally useful impact is 100% about the data and overall training process (and robotics...), of which raw compute is a relatively trivial and fungible part. No amount of reddit posts and H200s will result in a model that can cure cancer or drive high-throughput waste filtering or precision agriculture.
- kingstnap 1y ago
  I think GPT 5 is pretty good. My use case is vscode copilot and the GPT 5 Codex model and the 5 mini model are a lot better than 4.1. o4 mini was pretty good too. Its slow as balls as of late though. So I use a lot of sonnet 4.5 just because it doesn't involve all this waiting even though I find sonnet to be kinda lazy.
  - pphysch 1y ago
    Sure, GPT-5 is pretty good. So are a dozen other models. It's nowhere near the "scary good" proto-AGI that Altman was fundraising on prior to its inevitable release.
    - Libidinalecon 1y ago
Keyframe 1y ago
Every AI company is going to end up being a wrapper around them. the race is for sure on: https://menlovc.com/perspective/2025-mid-year-llm-market-update/ https://menlovc.com/perspective/2025-mid-year-llm-market-upd...

by treis 1y ago

kilroy123 1y ago

Google, too, has a lot of compute. Not to mention the chips to power the compute.

pityJuke 1y ago
And they own the compute, as opposed to renting some of it. And they have the engineers to utilise that compute.

gizajob 1y ago

If only everyone in the world had compute in their pockets or on their desk…

sipjca 1y ago

seems like a flawed assumption when the cost of tokens -> 0

mdasen 1y ago

But is OpenAI building that compute or are they renting it? OpenAI and Anthropic are signing large deals with Google and Amazon for compute resources, but ultimately it means that Google and Amazon will own a ton of compute. Is OpenAI paying Amazon's cap ex just so Amazon can invest and end up owning what OpenAI needs over the long term? For those paying Google, are they giving Google the money Google needs to further invest in their TPUs giving them a huge advantage?

treis 1y ago
Practically, it doesn't matter like it didn't matter for Google that storage got many orders of magnitude cheaper. By the time training a novel LLM and serving it to a billion users is trivial in the way that providing 1GB of email storage is today there will be other moats. They'll have decades of user history and a monitization framework that will be hard to overcome. Google is a viable competitor here. Everyone else is missing part of the puzzle. They theoretically could compete but they're behind with no obvious way of catching up. Amazon specifically is in a position similar to where they were with mobile. They put out a competing phone but with no clear advantage it flopped. They could put out their own LLM but they're late. They'd have to put out a product that is better enough to overcome consumer inertia. They have no real edge or advantage over OpenAI/Google to make that happen. Theoretically they could back a competitor like Anthropic but what's the point? They look like an also ran these days and ultimately who wins doesn't affect Amazon's core businesses.
- esafak 1y ago
  How is Anthropic an also-ran when they lead the enterprise market?
  - dybber 1y ago
    Do they? Doesn’t big corporations just buy CoPilot from Microsoft where they already have a license for Office, Teams, GitHub, Visual Studio, Azure etc.?
    - esafak 1y ago
      By API usage: https://menlovc.com/perspective/2025-mid-year-llm-market-update/ https://menlovc.com/perspective/2025-mid-year-llm-market-upd...
      - netdevphoenix 1y ago
        You know Menlo is an Anthropic investor, right? The report is likely biased imo. While I can see Anthropic or any other leading on API usage, it is unlikely that Anthropic leads in terms of raw consumer usage as Microsoft has the Office AI integration market locked down

JimDabell 1y ago

> OpenAI is doing the same with compute. No, it’s Amazon that’s doing this. OpenAI is paying Amazon for the compute services, but it’s Amazon that’s building the capacity.

pphysch 1y ago

Pretty sure this "compute is the new oil" thesis fell flat when OAI failed to deliver on GPT-5 hype, and all the disappointments since. It's still all about the (yet to be collected) data and advancements in architecture, and OAI doesn't have anything substantial there.

XorNot 1y ago
It's absolutely no longer about the data. We produce millions of new humans a year who wind up better at reasoning then these models but don't need to read the entire contents of the Internet to do it. A relatively localized, limited lived experience apparently conveys a lot that LLM input does not - there's an architecture problem (or a compute constraint).
- pphysch 1y ago
  AI having societally useful impact is 100% about the data and overall training process (and robotics...), of which raw compute is a relatively trivial and fungible part. No amount of reddit posts and H200s will result in a model that can cure cancer or drive high-throughput waste filtering or precision agriculture.
kingstnap 1y ago
I think GPT 5 is pretty good. My use case is vscode copilot and the GPT 5 Codex model and the 5 mini model are a lot better than 4.1. o4 mini was pretty good too. Its slow as balls as of late though. So I use a lot of sonnet 4.5 just because it doesn't involve all this waiting even though I find sonnet to be kinda lazy.
- pphysch 1y ago
  Sure, GPT-5 is pretty good. So are a dozen other models. It's nowhere near the "scary good" proto-AGI that Altman was fundraising on prior to its inevitable release.
  - Libidinalecon 1y ago

Keyframe 1y ago

Every AI company is going to end up being a wrapper around them. the race is for sure on: https://menlovc.com/perspective/2025-mid-year-llm-market-update/ https://menlovc.com/perspective/2025-mid-year-llm-market-upd...