5 ms·

Google does have a sort of temporary moat. They have a much better hardware supply line story than anyone else and the revenue to maintain that edge indefinitel

by zaphar 6mo ago

Google does have a sort of temporary moat. They have a much better hardware supply line story than anyone else and the revenue to maintain that edge indefinitely.

JumpCrisscross 6mo ago
If AI is commoditising, who is Bahrain and who are the Saudis?
- Urahandystar 6mo ago
  The app layer is Bahrain.
- mikelitoris 6mo ago
  What does that mean?
  - JumpCrisscross 6mo ago
    > What does that mean? I really couldn't have been more obscure, could I? :P In 1932, "the first oil field in the Persian Gulf outside of Iran" was discovered in Bahrain [1]. (The same year Saudi Arabia announced unification [2].) In the end, Saudi Arabia had larger reserves and wound up geopolitically dominating its first-moving rival. In commodities, the game tends to be scale in part through land grabbing. Less who got where first. To close the analogy, if AI does wind up commoditised, the layers at which that commodity is held are probably between power and compute [3]. So if AI commoditises (commodifies?), Google selling computer (and indirectly power) to Anthropic and OpenAI is the smarter play than trying to advantage Gemini. (If AI doesn't commoditise, the opposite may be true–Google is supercharging a competitor.) [1] https://en.wikipedia.org/wiki/Bahrain_Petroleum_Company https://en.wikipedia.org/wiki/Bahrain_Petroleum_Company [2] https://en.wikipedia.org/wiki/Proclamation_of_the_Kingdom_of_Saudi_Arabia https://en.wikipedia.org/wiki/Proclamation_of_the_Kingdom_of... [3] The alternate hypothesis is it's at distribution.
    - dmix 6mo ago
      Plus the whole thing of first mover advantage being a myth, especially in the tech industry
      - JumpCrisscross 6mo ago
        > Plus the whole thing of first mover advantage being a myth, especially in the tech industry Source? That would be surprising!
        dmix 6mo ago
        https://hbr.org/2005/04/the-half-truth-of-first-mover-advantage https://hbr.org/2005/04/the-half-truth-of-first-mover-advant... https://static1.squarespace.com/static/5654eb6ee4b0e19716ec5a92/t/56be95b686db43b5489cb0bd/1455330748283/2005_HBR_The+Half+Truth+of+First+Mover+Advantage.pdf https://static1.squarespace.com/static/5654eb6ee4b0e19716ec5... Showing how old I am with that reference A more recent article https://www.productplan.com/learn/first-mover-advantage-fast-follower https://www.productplan.com/learn/first-mover-advantage-fast... I should say it’s “mostly” a myth, there are some fleeting competitive advantages to first mover but a lot of them don’t apply well to tech companies and there isn’t strong historical evidence supporting it.
        2df 6mo ago
        Why? Being a first mover only counts for something if it can yield exclusivity that is durable.. you should know this being a VC and all. Real options - hello? If you want to benefit massively off being a first mover, you better do the work in figuring it out how you are going to acquire exclusivity that lasts long enough that keeps most firms out.
  - mh- 6mo ago
    I believe they were drawing a parallel to oil commoditization, but that's as far as I got.
- catlover76 6mo ago
  [dead]
- nostromo 6mo ago
  The company with the access to cheap and plentiful energy and the real estate to build data centers will be Saudi Arabia in your analogy. This is why SpaceX could be a dark horse in this race. Putting compute in space is expensive but so is building a data center in the US.
  - bpye 6mo ago
    > Putting compute in space is expensive but so is building a data center in the US. You know what's also really hard in a vacuum? Dissipating heat.
    - JumpCrisscross 6mo ago
      > You know what's also really hard in a vacuum? Dissipating heat Correct. The economics of space-based DCs comes down to permitting delays versus radiator mass. At ISS-weight radiators (12 to 15 W/kg (EDIT: kg/kW)), you need almost decade-long delays on the ground (or 10+ percent interest rates) to make lifting worthwhile. Get down to current state-of-the-art in the 5 to 10 W/kg (EDIT: kg/kW) range, however, and you only need permiting delays of 2 to 3 years. If there is a game-changing start-up waiting to be built, it's in someone commercialising a better vacuum-rated radiator.
      - ambicapter 6mo ago
        Would you want more wattage per kg for a better radiator?
        deleted 6mo ago
        [deleted]
        JumpCrisscross 6mo ago
        Yes! Thank you–fixed.
  - redanddead 6mo ago
    Putting it centrally globally makes a lot of sense, just like connecting airports Saudi will host the biggest data centers in the world
nostromo 6mo ago
Running AI at a loss long enough to kill the competition would run afoul of antitrust laws. Even more so since they’re bundling their AI products with their search monopoly. Although I doubt this will stop them if they think it’s advantageous…
- pixl97 6mo ago
  >would run afoul of antitrust laws Buwahahahahahahahhahah They drop a little cash on some shitcoin the president controls and those problems go away.
  - deleted 6mo ago
    [deleted]
  - deleted 6mo ago
    [deleted]
- akozak 6mo ago
  Lower real operating costs isn't the same thing as below cost pricing. US law here is nuanced. Good quick primer https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost-pricing https://www.ftc.gov/advice-guidance/competition-guidance/gui...
- Bewelge 6mo ago
  I thought that these type of antitrust laws are in no way enforced anymore in the tech industry. And that it's been that way for decades. I mean the sheer existence of Google shows that right? What about Maps, Mail, Books... basically everything apart from Search? Why would an AI Mode as one category of Search results be any different? They're not actively promoting Gemini in those search results. They're simply augmenting it with this new tool that exists now.
  - er2d 6mo ago
    Yes anti-trust is very much theatre nowadays. As long it further's American interests globally - monopoly is fine. Other countries need to take notice and start picking winners nationally in order to compete with the large American big tech firms.
htx80nerd 6mo ago
This is the thing - Google is a real company with well established business, money of their own, hardware, server farms, etc. ChatGPT and Anthropic have none of that in the same way google does. They have an incentive to lie and 'fake it till you make it' so they can get out of the 'risk zone' of collapsing back in on themselves. Google can throw money at Gemini all day.
- flockonus 6mo ago
  That may be true for OpenAI, less so for Antropic - which has much better margins. Both of these companies CEOs have come in public saying the same. No doubt as of currently Google has a better business. But the same argument could have been said about Instagram or Whatsapp before Facebook (now Meta) acquired them.

by zaphar 6mo ago

Google does have a sort of temporary moat. They have a much better hardware supply line story than anyone else and the revenue to maintain that edge indefinitely.

JumpCrisscross 6mo ago

If AI is commoditising, who is Bahrain and who are the Saudis?

Urahandystar 6mo ago
The app layer is Bahrain.
mikelitoris 6mo ago
What does that mean?
- JumpCrisscross 6mo ago
  > What does that mean? I really couldn't have been more obscure, could I? :P In 1932, "the first oil field in the Persian Gulf outside of Iran" was discovered in Bahrain [1]. (The same year Saudi Arabia announced unification [2].) In the end, Saudi Arabia had larger reserves and wound up geopolitically dominating its first-moving rival. In commodities, the game tends to be scale in part through land grabbing. Less who got where first. To close the analogy, if AI does wind up commoditised, the layers at which that commodity is held are probably between power and compute [3]. So if AI commoditises (commodifies?), Google selling computer (and indirectly power) to Anthropic and OpenAI is the smarter play than trying to advantage Gemini. (If AI doesn't commoditise, the opposite may be true–Google is supercharging a competitor.) [1] https://en.wikipedia.org/wiki/Bahrain_Petroleum_Company https://en.wikipedia.org/wiki/Bahrain_Petroleum_Company [2] https://en.wikipedia.org/wiki/Proclamation_of_the_Kingdom_of_Saudi_Arabia https://en.wikipedia.org/wiki/Proclamation_of_the_Kingdom_of... [3] The alternate hypothesis is it's at distribution.
  - dmix 6mo ago
    Plus the whole thing of first mover advantage being a myth, especially in the tech industry
    - JumpCrisscross 6mo ago
      > Plus the whole thing of first mover advantage being a myth, especially in the tech industry Source? That would be surprising!
      - dmix 6mo ago
        https://hbr.org/2005/04/the-half-truth-of-first-mover-advantage https://hbr.org/2005/04/the-half-truth-of-first-mover-advant... https://static1.squarespace.com/static/5654eb6ee4b0e19716ec5a92/t/56be95b686db43b5489cb0bd/1455330748283/2005_HBR_The+Half+Truth+of+First+Mover+Advantage.pdf https://static1.squarespace.com/static/5654eb6ee4b0e19716ec5... Showing how old I am with that reference A more recent article https://www.productplan.com/learn/first-mover-advantage-fast-follower https://www.productplan.com/learn/first-mover-advantage-fast... I should say it’s “mostly” a myth, there are some fleeting competitive advantages to first mover but a lot of them don’t apply well to tech companies and there isn’t strong historical evidence supporting it.
      - 2df 6mo ago
        Why? Being a first mover only counts for something if it can yield exclusivity that is durable.. you should know this being a VC and all. Real options - hello? If you want to benefit massively off being a first mover, you better do the work in figuring it out how you are going to acquire exclusivity that lasts long enough that keeps most firms out.
- mh- 6mo ago
  I believe they were drawing a parallel to oil commoditization, but that's as far as I got.
catlover76 6mo ago
[dead]
nostromo 6mo ago
The company with the access to cheap and plentiful energy and the real estate to build data centers will be Saudi Arabia in your analogy. This is why SpaceX could be a dark horse in this race. Putting compute in space is expensive but so is building a data center in the US.
- bpye 6mo ago
  > Putting compute in space is expensive but so is building a data center in the US. You know what's also really hard in a vacuum? Dissipating heat.
  - JumpCrisscross 6mo ago
    > You know what's also really hard in a vacuum? Dissipating heat Correct. The economics of space-based DCs comes down to permitting delays versus radiator mass. At ISS-weight radiators (12 to 15 W/kg (EDIT: kg/kW)), you need almost decade-long delays on the ground (or 10+ percent interest rates) to make lifting worthwhile. Get down to current state-of-the-art in the 5 to 10 W/kg (EDIT: kg/kW) range, however, and you only need permiting delays of 2 to 3 years. If there is a game-changing start-up waiting to be built, it's in someone commercialising a better vacuum-rated radiator.
    - ambicapter 6mo ago
      Would you want more wattage per kg for a better radiator?
      - deleted 6mo ago
        [deleted]
      - JumpCrisscross 6mo ago
        Yes! Thank you–fixed.
- redanddead 6mo ago
  Putting it centrally globally makes a lot of sense, just like connecting airports Saudi will host the biggest data centers in the world

nostromo 6mo ago

Running AI at a loss long enough to kill the competition would run afoul of antitrust laws. Even more so since they’re bundling their AI products with their search monopoly. Although I doubt this will stop them if they think it’s advantageous…

pixl97 6mo ago
>would run afoul of antitrust laws Buwahahahahahahahhahah They drop a little cash on some shitcoin the president controls and those problems go away.
- deleted 6mo ago
  [deleted]
- deleted 6mo ago
  [deleted]
akozak 6mo ago
Lower real operating costs isn't the same thing as below cost pricing. US law here is nuanced. Good quick primer https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost-pricing https://www.ftc.gov/advice-guidance/competition-guidance/gui...
Bewelge 6mo ago
I thought that these type of antitrust laws are in no way enforced anymore in the tech industry. And that it's been that way for decades. I mean the sheer existence of Google shows that right? What about Maps, Mail, Books... basically everything apart from Search? Why would an AI Mode as one category of Search results be any different? They're not actively promoting Gemini in those search results. They're simply augmenting it with this new tool that exists now.
- er2d 6mo ago
  Yes anti-trust is very much theatre nowadays. As long it further's American interests globally - monopoly is fine. Other countries need to take notice and start picking winners nationally in order to compete with the large American big tech firms.

htx80nerd 6mo ago

This is the thing - Google is a real company with well established business, money of their own, hardware, server farms, etc. ChatGPT and Anthropic have none of that in the same way google does. They have an incentive to lie and 'fake it till you make it' so they can get out of the 'risk zone' of collapsing back in on themselves. Google can throw money at Gemini all day.

flockonus 6mo ago
That may be true for OpenAI, less so for Antropic - which has much better margins. Both of these companies CEOs have come in public saying the same. No doubt as of currently Google has a better business. But the same argument could have been said about Instagram or Whatsapp before Facebook (now Meta) acquired them.