[HN Gopher] OpenAI needs to raise at least $207B by 2030
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OpenAI needs to raise at least $207B by 2030
Author : akira_067
Score : 515 points
Date : 2025-11-26 15:06 UTC (7 hours ago)
(HTM) web link (ft.com)
(TXT) w3m dump (ft.com)
| rpmisms wrote:
| https://archive.ph/PyLnT
| fullshark wrote:
| "If you owe the cloud computing company a hundred dollars, it's
| your problem, but if you owe the cloud computing company 207
| billion dollars..."
| akira_067 wrote:
| Too big to fail. It's essentially 08 part 2 with the expected
| irr.
| ieie3366 wrote:
| But this is not a bank, or an airline, or a real estate
| giant.
|
| If OpenAI goes bankrupt, what happens? People won't be able
| to write their precious slop oh no and serious professionals
| will just switch to any other LLM provider
| LunaSea wrote:
| Users might simply switch to Gemini or Claude but partnered
| companies might go bankrupt or see their stock tank.
| rubyfan wrote:
| OpenAI deals will likely end up with government backing in
| the next 12 months. Then we'll all be on the hook for it.
| user3939382 wrote:
| If they want to come talk to me I can help them out of this.
| Usually the smart guys are too busy talking to hear an offer
| though.
| voxadam wrote:
| Previously: https://news.ycombinator.com/item?id=46054092 | 11
| hours ago | 44 points | 19 comments
| Invictus0 wrote:
| People crying about the revenue gap constantly forget that OpenAI
| still hasn't turned on the ads, porn, and gambling. Trust, they
| will turn it on eventually.
| 9cb14c1ec0 wrote:
| I fully expect all three to happen.
| femiagbabiaka wrote:
| HSBC, the firm who did the analysis in the article, took into
| account projected revenues matching user numbers of 44% of the
| world's non-Chinese population.
| rvnx wrote:
| It would be plausible but very optimistic projection if there
| was no competition that is currently crushing OpenAI
| femiagbabiaka wrote:
| Oh, I agree it's implausible. But GP said
|
| > People crying about the revenue gap constantly forget
| that OpenAI still hasn't turned on the ads, porn, and
| gambling
|
| But quite the opposite, HSBC assumed that they will have a
| virtual global monopoly on AI, and even under those
| projections they will still need to take on hundreds of
| billions of debt. I'm sure if they get there getting access
| to that debt will be easier than I'm assuming currently.
| rvnx wrote:
| Do you believe so ? (like real question, not sarcastic
| here)
| femiagbabiaka wrote:
| I think that a company with a global monopoly on a
| thinking machine that replaces wide swaths of current
| internet business categories, whose user base makes up
| most of the world outside of the GFW, would be very
| valuable on the public market and would probably have
| access to as much debt as they want, even if it had
| negative consequences for the world economy. Even the 2nd
| or 3rd place company in that race will be quite
| profitable. It's not _impossible_ , just implausible.
| yabatopia wrote:
| With zero market share for Google.
|
| Living in AImaginationland must be nice. C'mon kids, let's
| all sing the AImagination song: AImagination, AImagination,
| AIiiimagination, ...
| femiagbabiaka wrote:
| 44% for OpenAI wouldn't mean 0% for Google, but considering
| that even Apple only has about 30% of the global smartphone
| marketshare, OpenAI getting there seems unlikely.
| ecshafer wrote:
| I think the ads will be turned on, inevitably.
|
| I hope the porn and gambling aren't turned on, but they will
| be. Probably under spin off companies to shield the brand, but
| using the tech.
| pksebben wrote:
| if I had my druthers, we'd leave the ads but get the porn and
| gambling.
|
| two out of three of those require me to want to do them for
| them to affect my life.
| looknee wrote:
| They're already turning on the porn:
| https://www.bbc.com/news/articles/cpd2qv58yl5o
| sethops1 wrote:
| I am suspect that ads will be able to cover the cost of
| inference, much less model building, salaries, product
| development, etc. The ad industry is built upon _and priced
| for_ websites that return results for virtually zero cost.
| That isn't going to be true for rendering AI.
| moi2388 wrote:
| You are more attracted to ads than porn?!
| ecshafer wrote:
| Define "attracted". I believe porn and gambling both do
| incredible amounts of damage to society. Ads probably do
| some damage to society, though I can recognize some
| benefits in being able to advertise and market products and
| services. I don't believe there is any benefit to the other
| two.
| otabdeveloper4 wrote:
| > ads, porn, and gambling
|
| We already have those at home without OpenAI.
|
| Also, the competition would be ruthless.
| moralestapia wrote:
| Sure, because there's one single ad network, one single place
| where you can gamble and one single porn site in the entire
| planet ...
| Spivak wrote:
| That is exactly the parent's point, that while those things
| could bring in revenue, the competition in those industries
| is already incredibly fierce. And that's before potential
| new entrants into the space on the AI front. Even in the
| best of cases I don't think anyone is gonna be able to pull
| anything other than middling margins.
| moralestapia wrote:
| They've already got (way!) more users than those other
| sites, though.
|
| But yeah, maybe they should give up because of the
| imaginary obstacles brought up here, lol.
|
| >potential new entrants into the space on the AI front
|
| Are these "potential new entrants into the space on the
| AI front" in the room with us right now?
| Spivak wrote:
| I'm not saying they should or will give up on these
| markets, just that their margins aren't likely to be
| great.
|
| There's already so much AI porn _right now_. There 's no
| reason to believe that OpenAI will be any better or able
| to command higher margins than their competitors. They
| also have the problem of being under a ton of public and
| regulatory scrutiny so the highest paying clientele, the
| people with niche unsavory fetishizes, won't be able to
| be serviced by them.
|
| And that's ignoring the fact that getting into this space
| at all is pure HN speculation and unlikely to ever happen
| anyway.
| otabdeveloper4 wrote:
| > They've already got (way!) more users than those other
| sites, though.
|
| By selling a dollar for 90 cents. The trick is what to do
| when the venture capital runs out.
| rchaud wrote:
| This is absolutely what techbro MBAs raised on case studies
| of Apple and Toyota are likely to think. Gamblers and porn
| users do not have any sort of brand loyalty and are likely
| to be hostile to the idea of "vertical integration" and
| "360 degree views of the customer".
| lm28469 wrote:
| Wouldn't that entirely kill the AGI delulu narrative (for
| people who still believe in it)
| michaelcampbell wrote:
| Delusion isn't swayed by facts. There are more than enough
| examples of this in the world today.
| thm wrote:
| "Google is excluded entirely"
| sethops1 wrote:
| Try using the shopping feature they just launched. It's
| literally just jamming ads into your chat session.
|
| https://openai.com/index/chatgpt-shopping-research/
| testfrequency wrote:
| This is what they hired Fidji for, and they are going down
| the same dark path she took Meta down.
|
| Everything's for sale, and they will amplify whatever ==
| revenue.
| jazzyjackson wrote:
| Which is silly because the whole point of asking an AI what
| induction stovetop to buy is so I don't have to do "shopping
| research"
| marcosdumay wrote:
| > Alphabet annual revenue for 2024 was $350.018B, a 13.87%
| increase from 2023.
|
| So, they need to "just" get 20% of the market from Google to
| break even...
| sebow wrote:
| (Imo) They will turn to all of these(especially to porn and
| gambling) when the core model of "enhance your life" will
| slowly fade away. The "academia space", the teens/boomers
| demographics, all of those will stop using OpenAI at scale if
| they're bombarded with vices (porn, gambling, etc).
|
| Ads & referrals are already in the works, and people are
| generally tolerant of those. But, as with any company,
| appearances matter. ChatGPT will definitely lose users at the
| slightest possibility of having non-sanitized content served to
| more morally sensible groups.
| Invictus0 wrote:
| there will be differentiated cohorts
| akira_067 wrote:
| They may not be shipping good enough products, but on the flip
| side it still feels like they have almost no competition
| outside of coding and image gen. The EOL termination of 4-o
| should be some evidence of this.
| bildung wrote:
| OTOH, _why_ don 't they ship good enough products? To me all
| of OpenAIs recent investments strongly suggest they hit a
| dead end with their current LLM approach. After all, if they
| knew the path ahead for GPT looks great, why don't they
| invest into training the next big thing instead of doing
| datacenters with the intention of renting them out?
| rchaud wrote:
| Why would OpenAI have any sort of advantage in these industries
| compared to the established players?
|
| it's pretty sobering to think that the so-called harbingers of
| SkyNet AGI have to fall back to mafia-era revenue streams like
| vice to convince shareholders that their money wasn't wasted.
| fullshark wrote:
| Ads/porn I get but how does genAI powered gambling work?
| bigfishrunning wrote:
| "ChatGPT, here's 5 dollars. Please roll a fair die. did i
| win?"
|
| This is truly the most stupid timeline.
| 1970-01-01 wrote:
| I think you're right, however that only defeats themselves in
| the long run. AI is something that can be run locally, while
| search, shopping, movies, social, etc. cannot. And once the ads
| are baked into the product, you will need a force like the EU
| to remove them else shareholders will riot. Ads will be the
| perfect weapon to shoot themselves in the foot.
| snowwrestler wrote:
| Ok, probably true, but it's still a pretty far fall from "we're
| just about to deliver AGI which will put us in the driver seat
| of the entire global economy." Which was the core value prop of
| their $trillion investment pitch. Like, there are way cheaper
| ways to deliver ads, porn, and gambling than training and
| operating huge LLMs.
| an0malous wrote:
| The cost per generation is still too expensive, they would not
| profit from ads and very few people pay for porn. I don't see
| how they'd profit from gambling either.
| dude250711 wrote:
| A bit like a socialist country.
| lawn wrote:
| Not at all. This is capitalism.
| dist-epoch wrote:
| No, this is Sparta
| stuffn wrote:
| Not when the government steps in because OpenAI, NVIDIA,
| Microsoft, etc are all going down together. There is so much
| pseudo-money-laundering going on between those companies. I
| would be shocked if the government (e.g. 2008 style socialism
| for the rich) steps in to make them "too big to fail".
| stanleykm wrote:
| still capitalism
| OccamsMirror wrote:
| Microsoft and Nvidia aren't going down.
|
| Their stock prices might go down but they're not going
| down.
| rchaud wrote:
| Stock prices going down is the reason AIG, GM and
| Chrysler received bailouts.
| parineum wrote:
| Debt and an inability to pay it by selling stock is why
| they received bailouts.
|
| Nvidia and Microsoft stand to make less money, not be in
| debt.
| akira_067 wrote:
| Something something true capitalism has never been tried
| before
| kennywinker wrote:
| Exactly - private profits, public losses, is quintessential
| neoliberal capitalism.
| loudmax wrote:
| In unconstrained socialism, a small group of powerful
| individuals use government control of corporations for their
| personal benefit.
|
| In unconstrained capitalism, a small group of powerful
| individuals use corporate control of government for their
| personal benefit.
|
| Clearly, these outcomes are completely different.
| GuinansEyebrows wrote:
| "unconstrained socialism" is kind of an oxymoron, isn't it?
| brap wrote:
| Bailouts are not capitalism
| peppersghost93 wrote:
| They are if they happen under capitalist states, which is
| what the US is.
| rchaud wrote:
| So if something is declared "capitalist", it maintains
| that state in perpetuity, regardless of the actions it
| takes in reality?
| wahnfrieden wrote:
| No, but it is a materialist analysis of capitalism in
| practice, rather than unrealized idealism
| rightbyte wrote:
| Queues are not socialism?
| h1fra wrote:
| But it's happening in the biggest capitalist country in a
| capitalist world
| achierius wrote:
| Nope, workers don't own the means of production -- this is the
| dictatorship of the bourgeoisie, baby.
| rapsey wrote:
| The most interesting point about OpenAI I have heard lately is
| they are literally trying to make themselves too big to fail. If
| they go down so does everyone else, which explains all those
| strange deals with everybody and the comment from their (cfo?)
| about being backstopped by the gov.
| YetAnotherNick wrote:
| > If they go down so does everyone else
|
| What does that even mean?
| rapsey wrote:
| In terms of the stock market since without AI thw US would be
| in a recession.
| rvnx wrote:
| Let's say OpenAI signed a commitment contract that they
| agreed to spend XXX USD in your company over N years. You
| invest in infrastructure, your contractors sometimes take
| loans, the construction companies take loans. Countries /
| Funds lend money to such companies (example: Saudi Arabia
| fund), these funds themselves raised debt, it can quickly
| spiral down.
| bradfa wrote:
| If OpenAI fails, wouldn't their customers just move to
| other AI providers? So the total hardware demand by AI
| companies wouldn't dramatically change over a reasonable
| time frame?
| stuartjohnson12 wrote:
| If OpenAI fails, the assumed case is overcapitalisation
| relative to demand. In such a world, if the reason OpenAI
| has no liquidity is because there's insufficient demand,
| there's no customers to move across.
| tushar-r wrote:
| What happens if the OpenAI failure is because of lack of
| demand from their customers and the market in general?
| None of the AI providers or hardware providers will
| survive, no?
| jvanderbot wrote:
| Is it unclear? Compared to other times a "too big to fail"
| industry failed?
|
| If OpenAI crashes, for example funding stops, they go broke,
| fall behind, nobody buys anything, then all the money they
| invested for data centers or demand they created for NVIDIA
| chips and compute collapses. That creates surplus of
| hardware, causes lots of construction/buildout / stockup
| orders to get cancelled, and the whole thing ripples as
| suppliers and construction and data center providers etc etc
| suddenly lose a ton of anticipated profits.
|
| Share prices drop as people dump to protect their portfolios,
| anticipating dips in the prices because share prices will
| drop as people dump to protect their portfolios (I'm not
| kidding).
|
| Given that the big 7 AI companies are basically _all_ of the
| market growth lately, it doesn't even take a serious panic /
| paranoia episode to see the market itself stagnate or
| significantly regress, as people pull from anything AI
| related, and then pull from the market itself anticipating
| the market will fall.
|
| It's a fairly standard playbook at this point.
| stackbutterflow wrote:
| That's different from saying that boeing is too big to fail
| for example. The US can't accept to lose its only major
| commercial aircraft manufacturer. Or Intel for similar
| reasons.
|
| But what you're describing is about keeping the AI bubble
| from popping. Can a bubble really be too big too fail?
| jvanderbot wrote:
| What I'm describing is the scare-quotes too-big-to-fail.
| Some actually are. But we use that term to mean anything
| that might cause significant economic trouble nowadays.
| MattDamonSpace wrote:
| Similar to certain banks in 2007/2008, the idea would be "so
| much investment is tied to one company that if that company
| went bankrupt, it could have consequences for the broader
| economy"
| rcarr wrote:
| The thing is, it is not 2007/2008 any more. The US
| government is holding record amounts of debt and countries
| around the world are now trying to become independent of
| it. This includes its bond markets on which the dollar
| relies upon to give it its reserve currency status, which
| in turn is what gives it its power to print money and bail
| industries out. If something happens that requires Big Tech
| to be bailed out and international bond holders decide the
| US is no longer reliable, it could very well end up
| triggering the collapse of the US dollar as the world's
| reserve currency and the downfall of the US as we know it.
| fragmede wrote:
| Not to mention, there's also that tariffs thing going on.
| mrweasel wrote:
| The stock market will lose faith in AI companies, which will
| crash the stock price of Google, Microsoft, Oracle, Nvidia
| and CoreWeave. Investors will lose billions, many of those
| investors are pension funds. Any AI projects that aren't
| already profitable will shutdown.
|
| And, because AI is currently what prevents the US economy
| from being in a recession (at least that what some people
| speculate), the US economy will stumble, which means that
| everyone else will to.
| fragmede wrote:
| Yeah. Look at how the S&P 493 are doing! :/
| rvnx wrote:
| If OpenAI fails, they could potentially bring in their downfall
| the major cloud providers who invested in hardware for them,
| expecting that it would pay-off over time.
| ZiiS wrote:
| 'Potentially' but we are nowhere close to this. Hyperscalers
| print a _lot_ of money they can afford to lose. Even Nvidia
| wouldn't be in too much trouble yet. (The pure LLM companies
| are already toast, IMHO).
| franktankbank wrote:
| Oh no not the Cloud!
| lkey wrote:
| Only Oracle went into debt to fund this expansion, and may
| well die. The rest of the cloud oriented mag7 used cash, can
| afford to write it off, and will continue being monopolies
| unimpeded.
| maherbeg wrote:
| I don't see a world where there is such a catastrophic
| failure, unless someone comes up with a significantly more
| efficient architecture.
|
| We're barely scratching the surface of the utility of LLMs
| with today's models. They aren't more pervasive because of
| their costs today, but what happens if they drop another
| order of magnitude with the current capabilities?
| akira_067 wrote:
| This seems accurate, and plausibly the only way out. The
| biggest issue I see here is that in this case... the greed
| might topple a government
| Rebuff5007 wrote:
| Hot take: a flagship silicon valley startup built on hype and
| overzealous ambition crashing and burning in 2026 is exactly
| what the industry needs right now.
| logsr wrote:
| > trying to make themselves too big to fail
|
| this is super overblown. what their executive said was that
| eventually the scale of compute required is so large, that it
| requires not only investing in new DCs, but new fabs, power
| plants, etc, which can only happen if there is implicit
| government support to guarantee 10+ year investment horizons
| required for the lower level of capital investment. that is not
| controversial at all and has nothing to do with OpenAI
| specifically being too big to fail.
| matthewowen wrote:
| It's sort of hard to judge this.
|
| The article mostly focuses on ChatGPT uses, but hard to say if
| ChatGPT is going to be the main revenue driver. It could be! Also
| unclear if the underlying report is underconsidering the other
| products.
|
| It also estimates that LLM companies will capture 2% of the
| digital advertising market, which seems kind of low to me. There
| will be challenges in capturing it and challenges with user
| trust, but it seems super promising because it will likely be
| harder to block and has a lot of intent context that should make
| it like search advertising++. And for context, search advertising
| is 40% of digital ad revenue.
|
| Seems like the error bars have to be pretty big on these
| estimates.
| disgruntledphd2 wrote:
| > It also estimates that LLM companies will capture 2% of the
| digital advertising market, which seems kind of low to me.
| There will be challenges in capturing it and challenges with
| user trust, but it seems super promising because it will likely
| be harder to block and has a lot of intent context that should
| make it like search advertising++. And for context, search
| advertising is 40% of digital ad revenue.
|
| Yeah, I don't like that estimate. It's either way too low, or
| much too high. Like, I've seen no sign of OpenAI building an
| ads team or product, which they'd need to do soon if it's going
| to contribute meaningful revenue by 2030.
| _aavaa_ wrote:
| https://openai.com/careers/growth-paid-marketing-platform-
| en...
|
| Is that role not exactly what you mention?
| disgruntledphd2 wrote:
| Actually yes (I did mean to check again but I hadn't seen
| evidence of this before).
|
| I do think that this seems odd, looks like they're hiring
| an IC to build some of this stuff, which seems odd as I
| would have expected them to be hiring multiple teams.
|
| That being said, the earliest they could start making
| decent money from this is 2028, and if we don't see them
| hire a real sales team by next March then it's more likely
| to be 2030 or so.
| xixixao wrote:
| At least the description is not at all about building an
| adtech platform inside OpenAI, it's about optimizing their
| marketing spend (which being a big brand, makes sense).
|
| There are a bunch of people from FB at OpenAI, so they
| could staff an adtech team internally I think, but I also
| think they might not be looking at ads yet, with having
| "higher" ambitions (at least not the typical ads machine
| ala FB/Google). Also if they really needed to monetize, I
| bet they could wire up Meta ads platform to buy on ChatGPT,
| saving themselves a decade of building a solid buying
| platform for marketers.
| disgruntledphd2 wrote:
| > There are a bunch of people from FB at OpenAI, so they
| could staff an adtech team internally I think
|
| Well they have Fidji, so she could definitely recruit
| enough people to make it work.
|
| > with having "higher" ambitions (at least not the
| typical ads machine ala FB/Google)
|
| Everyone has higher ambitions till the bills come due.
| Instagram was once going to only have thoughtfully
| artisan brand content and now it's just DR (like every
| other place on the Internet).
|
| > At least the description is not at all about building
| an adtech platform inside OpenAI, it's about optimizing
| their marketing spend (which being a big brand, makes
| sense).
|
| The job description has both, suggesting that they're
| hedging their bets. They want someone to build
| attribution systems which is both wildly, wildly
| ambitious and not necessary unless they want to sell ads.
|
| > I bet they could wire up Meta ads platform to buy on
| ChatGPT, saving themselves a decade of building a solid
| buying platform for marketers.
|
| Wouldn't work. The Meta ads system is so tuned for feed
| based ranking that I suspect they wouldn't gain much from
| this approach.
| _aavaa_ wrote:
| > it's not at all about building an affect platform
| inside OpenAI.
|
| Directly from posting: "building the technical
| infrastructure behind OpenAI's paid marketing platform"
| dotandgtfo wrote:
| That's a marketing role, not a product role.
| kooshball wrote:
| no. this role is for running ads campaigns at scale (on
| google, meta, etc) to grow openai users. its at a large
| enough scale it's called "platform" but it would be
| internal use only.
|
| > Your role will include projects such as developing
| campaign management tools, integrating with major ad
| platforms, building real-time attribution and reporting
| pipelines, and enabling experimentation frameworks to
| optimize our objectives.
| empiko wrote:
| https://chatgpt.com/merchants/
| celestialcheese wrote:
| > Like, I've seen no sign of OpenAI building an ads team or
| product
|
| You just haven't been paying attention. They hired Fidji Simo
| to lead applications in may, she led monetization/ads at
| facebook for a decade and have been staffing up aggressively
| with pros.
|
| Reading between the lines in interview with wired last
| week[0], they're about to go all in with ads across the
| board, not just the free version. Start with free, expand
| everywhere. The monetization opportunities in chatgpt are
| going to make what google offers with adwords look quaint,
| and every CMO/performance marketer is going to go in head
| first. 2% is tiny IMO.
|
| [0] - https://archive.is/n4DxY
| disgruntledphd2 wrote:
| I have indeed being paying attention, thanks. One executive
| does not an ads product make, though.
|
| I think that ads are definitely a plausible way to make
| money, but it's legally required that they be clearly
| marked as such, and inline ads in the responses are at
| least 1-2 versions away.
|
| The other option is either top ads or bottom ads. It's not
| clear to me if this will actually work (the precedents in
| messaging apps are not encouraging) but LLM chat boxes may
| be perceived differently.
|
| And just because you have a good ad product doesn't mean
| you'll get loads of budget. You also need targeting
| options, brand safety, attribution and a massive sales
| team. It's a lot of work and I still maintain it will take
| till 2030 at least.
| rchaud wrote:
| Google, Meta and Microsoft have AI search as well, so OAI with
| no ad product or real time bidding platform isn't going to just
| walk in and take their market.
|
| 2% is optimistic in my opinion.
| fhd2 wrote:
| Google, Meta and Microsoft would have to compete on demand,
| i.e. users of the chat product. Not saying they won't manage,
| but I don't think the competition is about ad tech
| infrastructure as much as it is about eyeballs.
| rchaud wrote:
| It might take Microsoft's Bing share, but Google and Meta
| pioneered the application of slot machine variable-reward
| mechanics to Facebook, Instagram and Youtube, so it would
| take a lot more than competing on demand to challenge them.
| jack_pp wrote:
| > And for context, search advertising is 40% of digital ad
| revenue.
|
| But all the search companies have their own AI so how would OAI
| make money in this sector?
| agwp wrote:
| Several ways, although I'm not sure whether the below will
| happen:
|
| 1. Paid ads - ChatGPT could offer paid listings at the top of
| its answers, just like Google does when it provides a results
| page. Not all people will necessarily leave Google/Gemini for
| future search queries, but some of the money that used to go
| to Google/Bing could now go to OpenAI.
|
| 2. Behavioral targeting based on past ChatGPT queries. If you
| have been asking about headache remedies, you might see ads
| for painkillers - both within ChatGPT and as display ads
| across the web.
|
| 3. Affiliate / commission revenue - if you've asked for
| product recommendations, at least some might be affiliate
| links.
|
| The revenue from the above likely wouldn't cover all costs
| based on their current expenditure. But it would help a bit -
| particularly for monetizing free users.
|
| Plus, I'm sure there will be new advertising models that
| emerge in time. If an advertiser could say "I can offer $30
| per new customer" and let AI figure out how to get them and
| send a bill, that's very different to someone setting up an
| ad campaign - which involves everything from audience
| selection and creative, to bid management and conversion rate
| optimization.
| mrweasel wrote:
| So I don't necessarily disagree with your suggestions, but
| that is just not a $1T company you're describing. That's
| basically a X/Twitter size company, and most agree that
| $44B was overpaying.
|
| It's not that OpenAI hasn't created something impressive,
| it just came at to high a price. We're talking space
| program money, but without all the neat technologies that
| came along as a result. OpenAI more or less develop ONE
| technology, no related product or technologies are spun out
| of the program. To top it all off, the thing they built,
| apparently not that hard to replicate.
| jcfrei wrote:
| There's also a possible scenario where the online ads market
| around search engines gets completely disrupted and the only
| remaining avenues for ad spending are around content delivery
| systems (social media, youtube, streaming, webpages, etc.). All
| other discovery happens within chatbots and they just get a
| revenue share whenever a chatbot refers a user to a particular
| product. I think ChatGPT is soon going to roll out this feature
| where you can do walmart shopping without leaving the chat.
| echelon wrote:
| Shopping within Alexa never made sense. I'm not sure I'll
| want to do it via ChatGPT.
|
| Maybe they're thinking they can build a universal store with
| search over every store? Like a "Google Shopping" type
| experience?
| recursive wrote:
| Your revenue share concept sounds passive. I suspect
| advertisers will also be able to pay for placement.
| postexitus wrote:
| Tapping into AdTech is extremely hard, as it's hard driven by
| network effects. What you mean is "displaying ads inside OpenAI
| products" then, yes, achievable, but that's a miniscule part of
| targeted Ad markets - 2% is actually very optimistic.
| Otherwise, they can sell literally 0 products to existing
| players as they all have already established "AI" toolsets to
| help them for ad generation and targeting.
| friendzis wrote:
| Query: LibraGPT, create a plan for my trip to Italia
|
| Response: Book a car at <totally not an ad> and it will be
| waiting for you at arrival terminal, drive to Napoli and stay
| at <totally not an ad> with an amazing view. There's an
| amazing <totally not an ad> place that serves grandma's
| favorite carbonara! Do you want me to make the bookings with
| a totally not fake 20% discount?
| xiphias2 wrote:
| I'm traveling like this all the time already, I don't
| understand why it's hard for people to understand that ad
| placement is actually easier for chat than search
| poloniculmov wrote:
| But who wants that? And you're going to say that's
| exactly what a travel agent does, selling me stuff so he
| can get a kickback. But when stuff goes wrong, I'll yell
| at the travel agent so he has some incentive to curate
| his ads.
| KaiserPro wrote:
| > that ad placement is actually easier for chat than
| search
|
| Yes, but the reason why people are turning to chatgpt is
| because the time to actual info that _I want_ is much
| much lower.
|
| The point of advertising is to displace the thing that
| you actually want with something they are paying the
| company to promote.
|
| You can handwave about personalization, but do you want
| adtech people having access to your life's context?
| tantalor wrote:
| > all the time already
|
| What are you actually saying? You're already using
| chatbots that are embedding non-disclosed paid
| endorsements? And you like that?
|
| > ad placement is actually easier for chat
|
| Can you point to, I don't know, anything to back this up?
| lesuorac wrote:
| That seems a bit risky for when the car isn't waiting for
| you at the terminal.
|
| At least with an ad it's obvious a separate company is
| involved. If you do all the payment through OpenAI it seems
| to leave them open to liability.
| morkalork wrote:
| Could be as simple as referral link commission like all
| those totally-not-content-farm travel blogs.
|
| Travel sites, VPNs and insurance all pay quite handsomely
| (compared to say amazon links on cooking sites)
| friendzis wrote:
| > If you do all the payment through OpenAI it seems to
| leave them open to liability.
|
| Booking, airbnb, rentalcars, etc all seem to be doing
| pretty fine regulatory wise.
| tantalor wrote:
| How to speedrun massive penalties and disgorgement from
| FTC.
|
| I guess we'll just put that in the "Cost of Goods Sold"
| bucket.
| mh- wrote:
| I'm not aware of any FTC rule that would preempt this
| sort of product as long as it met the endorsement
| disclosure rules (16 CFR Part 255), same as paid
| influencers do today.
|
| What are you imagining they run afoul of?
|
| https://www.ftc.gov/business-guidance/resources/ftcs-
| endorse...
|
| https://www.ecfr.gov/current/title-16/chapter-I/subchapte
| r-B...
| tantalor wrote:
| friendzis's example showed a plausible way to generate
| revenue by inserting paid placements into the chat bot
| response without disclosures by pretending they are just
| honest, organic suggestions.
| mh- wrote:
| Right. That's not a novel idea, and this is a well-trod
| area of concern. That's why these FTC rules have been
| around for many years.
|
| edit: to be clear, I am saying that in the absence of
| clear disclosures, that would run afoul of _current_ FTC
| rules. And historically they have been quick to react to
| novel ways of misleading consumers.
| friendzis wrote:
| All these chatbots are openly making recommendations for
| particular products since the day one. FTC (or any other
| regulatory body) does not even look at that direction.
|
| Do you have at least a rough idea how many current
| product recommendations are influenced grok "musk is the
| bestest at everything" style?
| PunchyHamster wrote:
| bribe the artificial idiot to con the user, brilliant !
| postexitus wrote:
| Let's put an analogy to Google ads - the ads that appear at
| search results do not make up even 5% of their ad revenue.
| Even smaller for Meta. They earn their big ad revenues from
| their network, not from their main apps.
| hobofan wrote:
| What? Where are you getting those numbers from?
|
| Every source I know (hard to link on mobile) shows Google
| Search to make up 50+% of their ad revenue, and there has
| been extensive reporting over the years on Google's
| struggle to diversify away from that.
| echelon wrote:
| If ChatGPT shows ads, I'll switch to Claude or Gemini or
| DeepSeek.
| HWR_14 wrote:
| Assuming you know it's an ad. Ads in answers will generate
| a ton of revenue and you'll never know if that Hilton
| really is the best hotel or if they just paid the most.
| mh- wrote:
| This isn't a realistic concern unless FTC rules changed
| substantially from where they are today (see my other
| comment on this post for links). Sponsored link
| disclosures would be in place.
|
| Everything else aside, it's simply not worth it for them
| to try to skirt these rules because the majority of their
| users (or Google's) simply don't care if something is
| paid placement or not, provided it meets their needs.
| sjsdaiuasgdia wrote:
| The US federal government is now a mob-style
| organization. The laws, rules, and regulations that are
| written down are only applicable as far as Trump and
| those around him want them to be. Loyalty to the boss is
| the only inviolable rule.
|
| In other words, if they want to put ads into chat, they
| just need to be perceived as well aligned to Trump to
| avoid any actual punishment.
| HWR_14 wrote:
| That's only true if you can demonstrate a substantial
| percentage of people would be unaware of it. The reason
| influencers have to disclose is some but not all take
| endorsement money. It would be pretty easy for OpenAI to
| say it was common knowledge or to bury disclosures in the
| fine print of the services and not every time it happened
| wood_spirit wrote:
| The OpenAI pitch for "publishing partnerships" (basically
| buying bias and placement) leaked last year.
| lambda wrote:
| Do you think it would show ads, or just prioritize content
| based on who has paid for ad placement?
| tomashubelbauer wrote:
| I expect all hosted model providers will serve ads
| (regular, marked advertisements, no need for them to
| pretend not to, people don't care) once the first provider
| takes the lid off on the whole thing and it proves to be
| making money. There's no point in differentiating as the
| one hosted model with no ads because it only attracts a few
| people, the same way existing Google search and YouTube
| alternatives that respect the user are niche. Only offline,
| self hosted models will be ad free (in my estimation).
| dooglius wrote:
| They're all already trained on ads, and it would be silly
| to think advertisers aren't going to optimize for this.
| this_user wrote:
| IMO the key problem that OpenAI have is that they are all-in on
| AGI. Unlike a Google, they don't have anything else of any
| value. If AGI is not possible, or is at least not in reach
| within the next decade or so, OpenAI will have a product in the
| form of AI models that have basically zero moat. They will be
| Netscape in a world where Microsoft is giving away Internet
| Explorer for free.
|
| Meanwhile, Google would be perfectly fine. They can just
| integrate whatever improvements the actually existing AI models
| offer into their other products.
| benterix wrote:
| > They can just integrate whatever improvements the actually
| existing AI models offer into their other products.
|
| If this is what users actually want.
| ActivePattern wrote:
| Yes, as is implied by the word "improvements"
| trenning wrote:
| This is how I look at Meta as well. Despite how much it is
| hated on here fb/ig/whatsapp aren't dying.
|
| AI not getting much better from here is probably in their
| best interest even.
|
| It's just good enough to create the slop their users love to
| post and engage with. The tools for advertisers are pretty
| good and just need better products around current models.
|
| And without new training costs "everyone" says inference is
| profitable now, so they can keep all the slopgen tools around
| for users after the bubble.
|
| Right now the media is riding the wave of TPUs they for some
| reason didn't know existed last week. But Google and meta
| have the most to gain from AI not having any more massive
| leaps towards agi.
| treis wrote:
| They're both all in on being a starting point to the
| Internet. Painting with a broad brush that was Facebook or
| Google Search. Now it's Facebook, Google Search, and ChatGPT.
|
| There is absolutely a moat. OpenAI is going to have a
| staggering amount of data on its users. People tell ChatGPT
| everything and it probably won't be limited to what people
| directly tell ChatGPT.
|
| I think the future is something like how everyone built their
| website with Google Analytics. Everyone will use OpenAI
| because they will have a ton of context on their users that
| will make your chatbot better. It's a self perpetuating cycle
| because OpenAI will have the users to refine their product
| against.
| mnky9800n wrote:
| yeah but your argument is true for every llm provider. so i
| don't see how it's a moat since everyone who can raise
| money to offer an llm can do the same thing. and google and
| microsoft doesn't need to find llm revenue it can always
| offer it at a loss if it chooses unless it's other revenue
| streams suddenly evaporate. and tbh i kind of doubt
| personalization is as deep of a moat as you think it is.
| treis wrote:
| Everyone could raise and build a search engine or social
| network. Many did and none of them dethroned Google or
| Facebook.
| WhyOhWhyQ wrote:
| Google can offer their services for free for a lot longer
| than OpenAI can, and already does to students. DeepSeek
| offers their competitor product to ChatGPT for free to
| everyone already.
| treis wrote:
| I don't think that's accurate. They're within the range
| of profitability on inference today and that's before
| theyve started selling ads.
| WhyOhWhyQ wrote:
| On what basis do you say they're within the range of
| profitability on inference today? Every source I see
| paints a different story based on their own bias.
|
| Ed Zitron has a bias and a narrative differing from
| OpenAI's bias and narrative:
| https://www.wheresyoured.at/oai_docs/
| iso1631 wrote:
| Social networks have network effects, the value comes
| from other people on the network, not the platform
| itself.
| CamperBob2 wrote:
| True enough, until it turns out that 90% of the people
| are AI bots.
| lenerdenator wrote:
| > IMO the key problem that OpenAI have is that they are all-
| in on AGI
|
| I think this needs to be said again.
|
| Also, not only do we not know if AGI is possible, but
| generally speaking, it doesn't bring much value if it is.
|
| At that point we're talking about up-ending 10,000 years of
| human society and economics, assuming that the AGI doesn't
| decide humans are too dangerous to keep around and have the
| ability to wipe us out.
|
| If I'm a worker or business owner, I don't need AGI. I need
| something that gets x task done with a y increase in
| efficiency. Most models today can do that provided the right
| training for the person using the model.
|
| The SV obsession with AGI is more of a self-important
| Frankenstein-meets-Pascal's Wager proposition than it is a
| value proposition. It needs to end.
| efdee wrote:
| Why would AGI not be possible?
|
| It might be hard, it might be difficult, but it is
| definitely possible. Us humans are the evidence for that.
| gampleman wrote:
| That's rather presupposing materialism (in the philosophy
| of mind sense) is correct. That seems to be the consensus
| theory, but it's not be shown 'definitely' true.
| torginus wrote:
| Because human brains are giant three-dimensional
| processors containing billions of neurons (each with
| computationally complex behaviors), each one performing
| computations >3 orders of magnitude more efficiently than
| transistors do, to train an intelligence with trillions
| of connections in real time, while being attached to
| incredibly sophisticated sensors and manipulators.
|
| And despite all that, humans are still just made of dirt.
|
| Even if we can get silicon to do _some_ of these tricks,
| that 'd require multiple breakthroughs, and it wouldn't
| be cost-competitive with humans for quite a while.
|
| I would even think it's possible that building brain-
| equivalent structures that consume the same power, and
| can do all the stuff for the same amount of resources, is
| a so far out science fiction proposition, that we can't
| even give a prediction as to when it will happen, and for
| practical purposes, biological intelligences will have an
| insurmountable advantage for even the furthest
| foreseeable future once you consider the economics of
| humans vs machines.
| rightbyte wrote:
| > And despite all that, humans are still just made of
| dirt.
|
| No we become dirt. I guess we are made of wood and
| computers are made of sand.
| habinero wrote:
| Theoretically possible doesn't mean we're capable of
| doing it. Like, it's easy to _say_ "I'm gonna boil the
| ocean" and another thing for _you personally_ to succeed
| at it while on a specific beach with the contents of
| several Home Depots.
|
| Humans tend to vastly underestimate scale and complexity.
| JumpCrisscross wrote:
| > _they are all-in on AGI_
|
| What are you basing this on? None of their investor-oriented
| marketing says this.
| perlgeek wrote:
| https://openai.com/charter/
|
| > OpenAI's mission is to ensure that artificial general
| intelligence (AGI)--by which we mean highly autonomous
| systems that outperform humans at most economically
| valuable work--benefits all of humanity. We will attempt to
| directly build safe and beneficial AGI, but will also
| consider our mission fulfilled if our work aids others to
| achieve this outcome.
|
| Note that it doesn't say: "Our mission is to maximize
| shareholder value, and we develop AI systems to do that".
| bradleybuda wrote:
| In fairness, no company's mission statement says
| "maximize shareholder value" because it doesn't need to
| be said - it's implicit. But I agree that AGI is at the
| forefront of OpenAI's mission in a way it isn't for
| Google - the nonprofit roots are not gone.
| bc569a80a344f9c wrote:
| I'm not nitpicking as such, I'm just providing a
| counterexample because it is rather rare for a company to
| spell it out:
|
| > In order to achieve our mission, we will conduct our
| business with the following Code of Ethics in mind:
|
| > Obey the law.
|
| > Take care of our members.
|
| > Take care of our employees.
|
| > Respect our suppliers.
|
| > If we do these four things throughout our organization,
| then we will achieve our ultimate goal, which is to
| reward our shareholders.
|
| https://customerservice.costco.com/app/answers/answer_vie
| w/a...
| nfw2 wrote:
| If your mission is to build AGI, and building and
| deploying it will take many years, an appropriate
| strategy to accomplish that goal is to find other revenue
| streams that will make the long haul possible.
| andsoitis wrote:
| The opening lines of their mission statement is direct
| about this:
|
| "OpenAI is an AI research and deployment company. Our
| mission is to ensure that artificial general intelligence
| benefits all of humanity."
|
| and
|
| "We are building safe and beneficial AGI, but will also
| consider our mission fulfilled if our work aids others to
| achieve this outcome."
|
| https://openai.com/about/
| WhyOhWhyQ wrote:
| I don't know what the moneyed insiders think OpenAI is
| about, but Sam Altman's public facing thoughts (which I
| consider to be marketing) are definitely oriented toward
| making it look like they are all-in on AGI:
|
| See:
|
| (1) https://blog.samaltman.com/the-gentle-singularity
| (June, 2025) - "We are past the event horizon; the takeoff
| has started. Humanity is close to building digital
| superintelligence, and at least so far it's much less weird
| than it seems like it should be."
|
| - " It's hard to even imagine today what we will have
| discovered by 2035; maybe we will go from solving high-
| energy physics one year to beginning space colonization the
| next year; or from a major materials science breakthrough
| one year to true high-bandwidth brain-computer interfaces
| the next year."
|
| (2) https://blog.samaltman.com/three-observations (Feb,
| 2025) - "Our mission is to ensure that AGI (Artificial
| General Intelligence) benefits all of humanity."
|
| - "In a decade, perhaps everyone on earth will be capable
| of accomplishing more than the most impactful person can
| today."
|
| (3) https://blog.samaltman.com/reflections (Jan, 2025) -
| "We started OpenAI almost nine years ago because we
| believed that AGI was possible, and that it could be the
| most impactful technology in human history"
|
| - "We are now confident we know how to build AGI as we have
| traditionally understood it."
|
| (4) https://ia.samaltman.com/ (Sep, 2024) - "This may turn
| out to be the most consequential fact about all of history
| so far. It is possible that we will have superintelligence
| in a few thousand days (!); it may take longer, but I'm
| confident we'll get there."
|
| (5) https://blog.samaltman.com/the-merge (Dec, 2017) - "A
| popular topic in Silicon Valley is talking about what year
| humans and machines will merge (or, if not, what year
| humans will get surpassed by rapidly improving AI or a
| genetically enhanced species). Most guesses seem to be
| between 2025 and 2075."
|
| (I omitted about as many essays. The hype is strong in this
| one.)
| jug wrote:
| I've also thought of this and what's more, Google's platform
| provides them with training from YouTube, optimal backend
| access to the Google Search index for grounding from an
| engine they've honed for decades, training from their
| smartphones, smart home devices and TV's, Google Cloud... And
| as you say, also the reverse; empowering their services from
| said AI, too.
|
| They can also run AI as a loss leader like with Antigravity.
|
| Meanwhile, OpenAI looks like they're fumbling with that
| immediately controversial statement about allowing NSFW after
| adult verification, and that strange AI social network which
| mostly led to Sora memes outside of it.
|
| I think they're going to need to do better. As for coding
| tools, Anthropic is an ever stronger contender there, if they
| weren't pressured from Google already.
| tarsinge wrote:
| Not only this, but there is a compounded bet that it'll be
| OpenAI that cracks AGI and not another lab, particularly
| Google from which LLMs come in the first place. What makes
| OpenAI researchers so special at this point?
| hdjrudni wrote:
| What's more -- how long can they keep the lid on AGI? If
| anyone actually cracks it... surely competitors are only a
| couple months behind. At least that seems to be the case
| with every new model thus far.
| cyanydeez wrote:
| Also, they'll have garbage because the curve is sinusoidal
| and not anything else. Regardless of the moat, the models
| won't be powerful enough to do a significant amount of work.
| sholain wrote:
| "don't have anything else of any value. " ?
|
| OpenAI is still de facto the market leader in terms of
| selling tokens.
|
| "zero moat" - it's a big enough moat that only maybe four
| companies in the world have that level of capability, they
| have the strongest global brand awareness and direct user
| base, they have some tooling and integrations which are
| relatively unique etc..
|
| 'Cloud' is a bigger business than AI at least today, and what
| is 'AWS moat'? When AWS started out, they had 0 reach into
| Enterprise while Google and AWS had infinity capital and
| integration with business and they still lost.
|
| There's a lot of talk of this tech as though it's a
| commodity, it really isn't.
|
| The evidence is in the context of the article aka this is an
| extraordinary expensive market to compete in. Their lack of
| deep pockets may be the problem, less so than everything
| else.
|
| This should be an existential concern for AI market as a
| whole, much like Oil companies before highway project
| buildout as the only entities able to afford to build toll
| roads. Did we want Exxon owning all of the Highways 'because
| free market'?
|
| Even more than Chips, the costs are energy and other issues,
| for which Chinese government has a national strategy which is
| absolutely already impacting the AI market. If they're able
| to build out 10x data centres at offer 1/10th the price at
| least for all the non-Frontier LLM, and some right at the
| Frontier, well, that would be bad in the geopolitical sense.
| podgietaru wrote:
| I mean, on your Cloud point I think AWS' moat might
| arguably be a set of deep integrations between services,
| and friendly API's that allow developers to quickly
| integrate and iterate.
|
| If AWS' was still just EC2, and S3 then I would argue they
| had very little moat indeed.
|
| Now, when it comes to Generative AI models, we will need to
| see where the dust settles. But open-weight alternatives
| have shown that you can get a decent level of performance
| on consumer grade hardware.
|
| Training AI is absolutely a task that needs deep pockets,
| and heavy scale. If we settle into a world where
| improvements are iterative, the tooling is largely
| interoperable... Then OpenAI are going to have to start
| finding ways of making money that are not providing API
| access to a model. They will have to build a moat. And that
| moat may well be a deep set of integrations, and an
| ecosystem that makes moving away hard, as it arguably is
| with the cloud.
| vl wrote:
| EC2 and S3 moat comes from extreme economies of scale.
| Only Google and Microsoft can compete. You would never be
| able to achieve S3 profitability because you are not
| going to get same hardware deals, same peering
| agreements, same data center optimization advantages. On
| top of that there is extremely optimized software stack
| (S3 runs at ~98% utilization, capacity deployed just
| couple weeks in advance, i.e. if they don't install new
| storage, they will run out of capacity in a month).
| bloppe wrote:
| I wouldn't call it a moat. A moat is more about switching
| costs rather than quality differentiation. You have a
| moat when your customers don't want to switch to a
| competitor despite that competitor having a superior
| product at a better price.
| mystifyingpoi wrote:
| > S3 runs at ~98% utilization
|
| I'm geniuinely curious, source?
| bloppe wrote:
| The AWS moat is a web of bespoke product lock-in and
| exorbitant egress fees. Switching cloud providers can be a
| huge hassle if you didn't architect your whole system to be
| as vendor-agnostic as possible.
|
| If OpenAI eliminated their free tier today, how many
| customers would actually stick around instead is going to
| Google's free AI? It's way easier to swap out a model. I
| use multiple models every day until the free frontier
| tokens run out, then I switch.
|
| That said, idk why Claude seems to be the only one that
| does decent agents, but that's not exactly a moat; it's
| just product superiority. Google and OAI offer the same
| exact product (albeit at a slightly lower level of quality)
| and switching is effortless.
| sholain wrote:
| There are quite large 'switching costs' from moving a
| solution that's dependent on on model and ecosystem, to
| another.
|
| Models have to significantly outperform on some metric in
| order to even justify looking at it.
|
| Even for smaller 'entrenchements' like individual
| developers - Gemeni 3 had our attention for all of 7
| days, now that Opus 4.5 is out, well, none of my
| colleagues are talking abut G3 anymore. I mean, it's a
| great model, but not 'good enough' yet.
|
| I use that as an example to illustrate broader dynamics.
|
| Open AI, Anthropic and Google are the primary
| participants here, with Grok possibly playing a role, and
| of course all of the Chinese models being an unknown
| quantity because they're exceptional in different ways.
| hdjrudni wrote:
| Aren't you contradicting yourself? To even be considering
| all the various models, the switching cost can't be that
| large.
|
| I think the issue here isn't really that it's "hard to
| switch" it's that it's easier yet to wait 1 more week to
| see what your current provider is cooking up.
|
| But if any of them start lagging for a few months I'm
| sure a lot of folks will jump ship.
| bloppe wrote:
| Switching a complex cloud deployment from AWS to GCP
| might take a dedicated team of engineers several months.
| Switching between models can be done by a single person
| in an afternoon (often just 5 minutes). That's what we're
| talking about.
|
| That means that none of these products can ever have a
| high profit margin. They have to keep margins razor thin
| at best (deeply negative at present) to stay relevant. In
| order to achieve the kinds of margins that real moats
| provide, these labs need major research breakthroughs.
| And we haven't had any of those since Attention is All
| You Need.
| sholain wrote:
| " Switching between models can be done by a single person
| in an afternoon (often just 5 minutes). That's what we're
| talking about."
|
| Good gosh, no, for comprehensive systems it's
| considerably more complicated than that. There's a lot of
| bespoke tuning, caching works completely differently
| etc..
|
| "That means that none of these products can ever have a
| high profit margin."
|
| No, it doesn't. Most cloud providers operate on a 'basis'
| of commodity (linux, storage, networking) with
| proprietary elements, similar to LLMs.
|
| There doesn't need to be any 'breakthroughs' to find
| broad use cases.
|
| The issue right now is the enormous underlying cost of
| training and inference - that's the qualifying
| characteristic that makes this landscape different.
| diamond559 wrote:
| Selling tokens at a massive loss, burning billions a
| quarter isn't the win you think it is. They don't have a
| moat bc they literally just lost the lead, you only can
| have a moat when you are the dominant market leader which
| they never were in the first place.
| SR2Z wrote:
| All indications are that selling tokens is a profitable
| activity for all of the AI companies - at least in terms
| of compute.
|
| OpenAI loses money on free users and paying the absurdly
| high salaries that they've chosen to offer.
| delis-thumbs-7e wrote:
| What indications?
| ludicrousdispla wrote:
| Chuck-E-Cheese is also very good at selling tokens.
| mbesto wrote:
| > All indications are that selling tokens is a profitable
| activity for all of the AI companies - at least in terms
| of compute.
|
| We actually don't this yet because the useful life of the
| capital assets (mainly NVIDIA GPUs) isn't really well
| understood yet. This is being hotly debated by wall st
| analysts for this exact reason.
|
| https://www.cnbc.com/2025/11/14/ai-gpu-depreciation-
| coreweav...
| sholain wrote:
| Gemeni does not have 'the lead' in anything but a
| benchmark.
|
| The most applicable benchmarks right now are in software,
| and devs will not switch from Claude Code or Codex to
| Antigravity, it's not even a complete product.
|
| This again highlights quite well the arbitrary nature of
| supposed 'leads' and what that actually means in terms of
| product penetration.
|
| And it's not easy to 'copy' these models or integrations.
| riffraff wrote:
| Gemini-cli existed long before Antigravity. It took
| Google very little.
|
| And the gemini app will come preloaded on any android
| phone, who else can say the same?
| user34283 wrote:
| Speak for yourself - I cancelled the Claude Code
| subscription after testing Antigravity.
|
| It works quite well here, and my phone came with a year
| of free Gemini Pro, so I don't currently see a reason to
| pay extra.
| zamadatix wrote:
| I think you're measuring the moat of developing the first
| LLMs but the moat to care about is what it'll take to clone
| the final profit generating product. Sometimes the OG tech
| leader is also the long term winner, many times they are
| not. Until you know what the actual giant profit generator
| is (e.g. for Google it was ads) then it's not really
| possible to say how much of a moat will be kept around it.
| Right now, the giant profit generator is not seeming to be
| the number of tokens generated itself - that is really
| coming at a massive loss.
| nradov wrote:
| The moat for any frontier LLM developer will be access to
| proprietary training data. OpenAI is spending some of their
| cash to license exclusive rights to third party data, and
| also hiring human experts in certain fields just to create
| more internal training data. Of course their competitors are
| also doing the same. We may end up in a situation where each
| LLM ends up superior in some domains and inferior in others
| depending on access to high quality training data.
| throwaway1389z wrote:
| "Needs cash" is not a moat.
| tpurves wrote:
| Thanks for calling this out. Here is a better comparison.
| Before Google was founded, the market for online search
| advertising was negligible. But the global market for all
| advertising media spend was on the order of 400B (NYT 1998).
| Today, Google's advertising revenue is around 260B / year or
| about 60% of the _entire_ global advertising spend circa 1998.
|
| If you think of openAI like a new google, as in a new category-
| defining primary channel for consumers to search and discover
| products. Well, 2% does seem pretty low.
| beowulfey wrote:
| But that occurred with a new form of media that people now
| use in more of their time than back before Google. It implies
| AI is growth in time spent. I think the trend is more likely
| that AI will replace other media.
| tonyedgecombe wrote:
| >Today, Google's advertising revenue is around 260B / year or
| about 60% of the entire global advertising spend circa 1998.
|
| Or about 30% of the global advertising spend circa 2024.
|
| I wonder if there is an upper bound on what portion of the
| economy can be advertising. At some point it must become
| saturated. People can only consume so much marketing.
| jononor wrote:
| Advertising is in many market like a tax or tariff -
| something all businesses needs to pay. Think of selling
| consumer goods online - you need ads on social media to
| bring in customers. Spending 10% on ads as COGS is a no
| brainer. 20% too. Maybe it could go as high as 50% - if the
| companies do not really have an alternative, and all the
| competitors ard doing it too? They are just going to pass
| the bill to the consumer anyway...
| Keyframe wrote:
| i hate to be that guy, but.. before google was around, it was
| the first wave of commercial internet - for all of what five
| years? Online search was a thing, in-fact it was THE thing
| across many vendors and all relied on advertising revenue.
| Revenue on the internet which was ramping up still for dotcom
| era in those few years. Google's ad revenue vs 98 global ad
| spend revenue - is that inflation adjusted? Global markets
| development since then, internet economy expansion, even
| sheer number of people alive.. completely different worlds.
|
| What might stand from comparison is google introduced a good
| product people wanted to use and innovative approach to
| marketing at the time which was unobtrusive. Product drive
| the traffic. It was quite a bit before Google figured it all
| out though.
| pbreit wrote:
| FT is really losing it. Used to be reliable with quality takes.
| Now mostly following in line with the spectating takers.
| KaiserPro wrote:
| In what sense? They are asking the questions that investment
| managers would be asking, like: "where the fuck is your
| revenue going to come from"
|
| and "200 billion, when your revenue is 12, is the market you
| are targeting actually big enough to support that"
| almostkindatech wrote:
| It's FT Alphaville, which means it's only supposed to be a
| blog-style comment on the HSBC report
| NewsaHackO wrote:
| It is to the point of yellow journalism. They know that the
| "OpenAI is going to go belly up in a week!" take is going to
| be popular with AI skeptics, which includes a large number of
| HN viewers. This thread shot up to the top of the front page
| almost immediately. All of that adds to the chances of roping
| in more subscribers.
| _trampeltier wrote:
| FT (like all media) does not sell news, they sell ads.
| iso1631 wrote:
| FT's advertising revenue is under half of their total
| revenue
| techblueberry wrote:
| Seems like ad targeting might be a tough sell here though, it'd
| basically have to be "trust me bro". Like - I want to advertise
| coca-cola when people ask about terraforming deserts? I think I
| wouldn't be either surprised by amazing success or terrifying
| failure.
|
| Perplexity actually did search with references linked to
| websites they could relate in a graph and even that only made
| them like $27k.
|
| I think the problem is on Facebook and Google you can build an
| actual graph because content is a thing (a url, video link
| etc). It will be much harder to I think convert my
| philosophical musings into active insights.
| ml-anon wrote:
| So few people understand how advertising on the internet
| works and that is I guess why Google and Meta basically print
| money.
|
| Even here the idea that it's as simple as "just sell ads" is
| utterly laughable and yet it's literally the mechanism by
| which most of the internet operates.
| observationist wrote:
| You have to take into consideration the source. FT is part of
| the Anthropic circle of media outlets and financial ties. It
| benefits them to create a draft of support to OpenAI
| competition, primarily Anthropic, but they(FT) also have deep
| ties to Google and the adtech regime.
|
| They benefit from slowing and attacking OpenAI because there's
| no clear purpose for these centralized media platforms except
| as feeds for AI, and even then, social media and independents
| are higher quality sources and filters. Independents are often
| making more money doing their own journalism directly than the
| 9 to 5 office drones the big outlets are running. Print media
| has been on the decline for almost 3 decades now, and AI is
| just the latest asteroid impact, so they're desperate to stay
| relevant and profitable.
|
| They're not dead yet, and they're using lawsuits and backroom
| deals to insert themselves into the ecosystem wherever they
| can.
|
| This stuff boils down to heavily biased industry propaganda,
| subtly propping up their allies, overtly bashing and degrading
| their opponents. Maybe this will be the decade the old media
| institutions finally wither up and die. New media already
| captures more than 90% of the available attention in the
| market. There will be one last feeding frenzy as they bilk the
| boomers as hard as possible, but boomers are on their last
| hurrah, and they'll be the last generation for whom TV ads are
| meaningfully relevant.
|
| Newspapers, broadcast TV, and radio are dead, long live the
| media. I, for one, welcome our new AI overlords.
| borski wrote:
| All of which is great theory without any kind of evidence?
| Whereas the evidence pretty clearly shows OpenAI is losing
| tons of money and the revenue is not on track to recover it?
| observationist wrote:
| Well, for one, the model doesn't take into account various
| factors, assumes a fixed cost per token, and doesn't allow
| for the people in charge of buying and selling the compute
| to make decisions that make financial sense. Some of OpenAI
| research commitments and compute is going toward research,
| with no contracted need for profit or even revenue.
|
| If you account for the current trajectory of model
| capabilities, bare-minimum competence and good faith on
| behalf of OpenAI and cloud compute providers, then it's
| nowhere near a money pit or shenanigan, it's typical VC
| medium to high risk investment plays.
|
| At some point they'll pull back the free stuff and the
| compute they're burning to attract and retain free users,
| they'll also dial in costs and tweak their profit per token
| figure. A whole lot of money is being spent right now as
| marketing by providing free or subsidized access to
| ChatGPT.
|
| If they wanted to maximize exposure, then dial in costs,
| they could be profitable with no funding shortfalls by 2030
| if they pivot, dial back available free access,
| aggressively promote paid tiers and product integrations.
|
| This doesn't even take into account the shopping
| assistant/adtech deals, just ongoing research trajectories,
| assumed improved efficiencies, and some pegged performance
| level presumed to be "good enough" at the baseline.
|
| They're in maximum overdrive expansion mode, staying
| relatively nimble, and they've got the overall lead in AI,
| for now. I don't much care for Sam Altman on a personal
| level, but he is a very savvy and ruthless player of the VC
| game, with some of the best ever players of those games as
| his mentors and allies. I have a default presumption of
| competence and skillful maneuvering when it comes to
| OpenAI.
|
| When an article like this FT piece comes out and makes
| assumptions of negligence and incompetence and projects the
| current state of affairs out 5 years in order to paint a
| negative picture, then I have to take FT and their biases
| and motivations into account.
|
| The FT article is painting a worst case scenario based on
| the premise "what if everyone involved behaved like
| irresponsible morons and didn't do anything well or
| correctly!" Turns out, things would go very badly in that
| case.
|
| ChatGPT was released less than 3 years ago. I think
| predicting what's going to happen in even 1 year is way
| beyond the capabilities of FT prognosticators, let alone 5
| years. We're not in a regime where Bryce Elder, finance and
| markets journalist, is capable or qualified to make
| predictions that will be sensible over any significant
| period of time. Even the CEOs of the big labs aren't in a
| position to say where we'll be in 5 years. I'd start
| getting _really_ skeptical when people start going past 2
| years, across the board, for almost anything at this point.
|
| Things are going to get weird, and the rate at which things
| get weird will increase even faster than our ability to
| notice the weirdness.
| borski wrote:
| All of which is more theory. Of course nobody can predict
| the future. Your argument is essentially "they have
| enough money and enough ability to attract more that
| they'll figure it out," just like Amazon did, who were
| also famously unprofitable but could "turn it on at any
| time."
|
| FT's argument is, essentially, "we're in a bubble and
| OpenAI raised too much and may not make it out."
|
| Neither of us knows which is more correct. But it is
| certainly at least a very real possibility that the FT is
| more correct. Just like the Internet was a great "game
| changer" and "bubble maker," so are LLMs/AI.
|
| I think it's quite obvious we're in a bubble right now.
| At some point, those pop.
|
| The question becomes: is OpenAI AOL? Or Yahoo? Or is it
| Google?
|
| I don't think anybody is arguing it's Pets.com.
| disgruntledphd2 wrote:
| That's a fabulous tale you've told (the notion that
| there's a bunch of Anthropic leaning sites is my personal
| favourite) but alas, the article is reporting on a GSBC
| report which they are justifiably sceptical if, and does
| not in any way, shape or form represent the FTs beliefs.
|
| AI can both be a transformative technology and the
| economics may also not make sense.
| roadside_picnic wrote:
| > It also estimates that LLM companies will capture 2% of the
| digital advertising market, which seems kind of low to me.
|
| I'm not super bullish on "AI" in general (despite, or maybe
| because of working in this space the last few years), but
| strongly agree that the advertising revenue that LLM providers
| will capture _can_ be potentially huge.
|
| Even if LLMs never deliver on their big technical promises, I
| know so many casual users of LLMs that basically have replaced
| their own thought process with "AI". But this is an _insane_
| opportunity for marketing /advertising that stands to be a much
| of a sea change in the space as Google was (if not more so).
|
| People _trust_ LLMs with tons of personal information, and then
| also trust it to advise them. Give this behavior a few more
| years to continue to normalize and product recommendations from
| AI will be as trusted as those from a close friends. This is
| the _holy grail_ of marketing.
|
| I was having dinner with some friends and one asked "Why
| doesn't Claude link to Amazon when recommending a book?
| Couldn't they make a ton in affiliate links?" My response was
| that I suspect Anthropic would rather pass on that easy revenue
| to build trust so that one day they can recommend _and sell_
| the book to you.
|
| And, because everything about LLMs is closed and private, I
| suspect we won't even know when this is happening. There's a
| world where you ask an LLM for a recipe, it provides all the
| ingredients for your meal from paid sponsors, then schedules to
| have them delivered to your door bypassing Amazon all together.
|
| All of this can be achieved with just adding layers on to what
| AI already is today.
| Avicebron wrote:
| What in the dystopia?
|
| The "holy grail" of the AI business model is to build a
| feeling of trust and security with their product and then
| turn around to try and gouge you on hemmorrhoid cream and the
| like?
|
| We really need to stop the worship of mustache twirling
| exploitation
| roadside_picnic wrote:
| There's no worship here on my part (in fact I got out of
| the AI space because was increasingly less about
| tech/solving problems, and more about pure hype), but my
| experience in this industry has been that the most
| dystopian path tends to be the most likely. I would prefer
| if Google search, Reddit and YouTube were closer to what
| they were 15 years ago, but I do recognize how they got
| here.
|
| I mean, look at all this "alignment" research. I think the
| people _working_ in this space sincerely believe they are
| protecting humanity of a "misaligned" AGI, but I also
| strongly believe the people _paying_ for this research want
| to figure out how to make sure we can keep LLMs _aligned_
| with the interests of advertisers.
|
| Meta put so much money into the Metaverse because they were
| looking for the next space that would be like the iPhone
| ecosystem: one of total control (but ideally better).
| Already people are using LLMs for more and more mundane
| tasks, I can easily imagine a world where an LLM is _the_
| interface for interacting online world rather than a web
| browser (isn 't that what we want with all these "agents"?)
| People already have AI lovers, have AI telling them that
| they are gods, having people connecting with them on a
| deeper level than they should. You believe Sam Altman
| doesn't realize the potential for exploitation here is
| _unbounded_?
|
| What AI represents is where a single company control every
| piece of information fed to you and has also established
| deep trust with you. All the benefits of running a social
| media company (unlimited free content creation, social
| trust) with none of the draw backs (having to manage and
| pay content creators).
| torginus wrote:
| In my experience LLMs suck at (product) recommendations - I
| was looking for books with certain themes, asked ChatGPT 5,
| the answer was vague, generic and didn't fit the bill. At
| another time I writing an essay and was looking for famous
| figures to cite as examples of an archetype, and ChatGPT's
| answers were barely related.
|
| In both cases, LLMs gave me examples that were generally
| famous, but very tangentially related to the subject at hand
| (at times, ChatGPT was reaching or straight up made up
| stuff).
|
| I don't know why it has this bias, but it certainly does.
| Anon1096 wrote:
| I work on rec systems.
|
| The ideal here will be a multi tiered approach where the
| LLM first identifies that a book should be recommended, a
| traditional recommendation system chooses the best book for
| the user (from a bank of books that are part of an ads
| campaign), and then finally the LLM weaving that into the
| final response by prompt suggestion. All of this is
| individually well tested for efficacy within the social
| media industry.
|
| I'll probably get comments calling this dystopian but I'm
| just addressing the claim that LLMs don't do good
| recommendations right now, which is not fundamental to the
| chatbot system.
| torginus wrote:
| All this would imply that the core value derives from
| better rec systems and not LLMs, which will merely embed
| the recommendation into their polite fluff.
|
| Rec systems are in use right now everywhere, and they're
| not exactly mindblowing in practice. If we take my
| example of books with certain plotlines, it would need
| some super-high quality feature extraction from books
| (which would be even more valuable imo, than having
| better algorithms working on worse data). LLMs can
| certainly help with that, but that's just one domain.
|
| And that would be a bespoke solution for just books,
| which would, if worked, would work with a standard search
| bar, no LLM needed in the final product.
|
| We would need people to solve every domain for
| recommendation, whereas a group of knowledgeable humans
| can give you great tips on every domain they're familiar
| with on what to read, watch, buy to fix your leaky roof,
| etc.
|
| So in essence, what you suggest would amount to giving up
| on LLMs (except as helpers for data curation and feature
| extraction) and going back to things we know work.
| idontwantthis wrote:
| > It also estimates that LLM companies will capture 2% of the
| digital advertising market, which seems kind of low to me.
|
| This cannot all be about advertising. They are selling a global
| paradigm shift not a fraction of low conversion rate eyeballs.
| If they start claiming advertising is a big part of their
| revenue stream then we will know that AI has reached a dead
| end.
| baxtr wrote:
| I mean seriously, if they offered ChatGPT for free but with ads
| I bet many would use that.
|
| There is your multi-bn $ revenue stream.
| nextaccountic wrote:
| > it will likely be harder to block
|
| Maybe users will employ LLMs to block ads? There's a problem in
| that local LLMs are less powerful and so would have a hard time
| blocking stealth ads crafted from a more powerful LLM, and
| would also add latency (remote LLMs add latency too, but the
| user may not want to pay double for that)
| everdrive wrote:
| Do we have a model for how advertising with LLMs will work?
| darkwizard42 wrote:
| Is there any link directly to the report? I am unable to find any
| in this article or a number of others which seem to just copy the
| same information here.
|
| I think beyond the number of crazy assumptions (no Google taking
| market share in the consumer market?? only 2% of digital
| advertising expected to be captured by OpenAI?) it is hard to
| nail down which levers could move which might make this funding
| hole disappear.
| NewsaHackO wrote:
| No, and there never will be. The second you ask anyone for hard
| numbers about OpenAI's (or any AI's) unprofitability, everyone
| evaporates (which is weird considering how quantitative the HN
| crowd tries to be, compared to, say, reddit). Everything is
| just "professional opinions" on economics by tech bro bloggers.
| darkwizard42 wrote:
| I'm not looking for OpenAI numbers, I'm looking for the HSBC
| report which would contain more numbers regarding how they
| did their estimates.
| aurareturn wrote:
| The team also assumes LLM companies will capture 2 per cent of
| the digital advertising market in revenue, from slightly more
| than zero currently.
|
| This seems quite low. Meta has 3.5 billion users and projected
| ~$200b revenue in 2025. ChatGPT is at ~1 billion so far. By 2030,
| let's just stay ChatGPT reaches 2 billion years or 57% of Meta's
| current users. I'd like to think that OpenAI's digital ad revenue
| should reach 10% by 2030 an then accelerate from there. In my
| opinion, the data that ChatGPT has on a user is better than the
| inferred user data from Instagram/FB usage. I think ChatGPT can
| build a better advertisement profile of each user than Meta can
| which can lead to better ad targeting. Further more, I think
| ChatGPT can really create a novel advertisement platform such as
| learning about sponsored products directly via chat. I'm already
| asking ChatGPT about potential products and services everyday
| like medicine, travel, gadgets, etc.
|
| I think people are severely underestimating ChatGPT as a way to
| make money other than subscriptions. I also think people are
| underestimating the branding power ChatGPT has already. All my
| friends have ChatGPT on their phone. None of them except me has
| Gemini or Claude app.
|
| This doesn't account for OpenAI's other ambitions such as Sora
| app.
|
| Hey Sam Altman or OpenAI employee, if you are reading this, I
| think you should buy the North American version of TikTok if the
| opportunity presents itself. The future of short videos will be
| heavily AI generated/assisted. Combine Tiktok's audience with
| your Sora tools and ChatGPT data and you got yourself a true
| Instagram competitor immediately. If the $14b sales price of US
| Tiktok is real, that's an absolute bargain in the grand scheme of
| things.
| l2silver wrote:
| I wonder if meta is a poor comparison for advertising because
| they're users tend to spend more time on their products doom
| scrolling, as opposed to something like google, where you get
| your answer right away and move on.
| aurareturn wrote:
| ChatGPT is a hybrid between Google and Meta. People use it
| for product and service search and research. People also use
| it as a companion - especially young people.
|
| It's becoming social as well: https://openai.com/index/group-
| chats-in-chatgpt/
| gtirloni wrote:
| > Meta has 3.5 billion users and projected ~$200b revenue in
| 2025.
|
| Meta has WhatsApp, Instagram, and Facebook to account for that.
|
| OpenAI has ChatGPT (not a social platform).
|
| It seems to me you're comparing apples and oranges here.
| k_kelly wrote:
| Google makes over a billion of its ad Revenue from search.
| Intent works.
|
| But I think Open AI is not a slam dunk for Ads. Gemini and AI
| mode will compete for the same budget, and Google's Ad
| machine is polished.
|
| I think eventually you will buy Ads for Open AI in Google's
| marketing platforms, just like most people buy bing ads in
| Google.
| aurareturn wrote:
| OpenAI knows my intent better than Google.
|
| I'm telling it nearly everything from my work problems to
| health problems to love life problems to product research,
| traveling plans, etc.
| jayd16 wrote:
| Google and Meta know your intent without you even telling
| them...
| tantalor wrote:
| That's different than intent.
|
| Your intent is the immediate need: how do I fix this
| leaky faucet?
|
| Your user profile (love life problems) is generally not
| useful there.
| phatfish wrote:
| Maybe, but OpenAI only get the data you decide to type
| into ChatGPT in a vibe therapy session or whatever, and
| they have to burn a load of GPU time to keep you feeding
| it more slop.
|
| Google just passively collects email and browsing
| history, much better data for targeting ads and way less
| cost to run.
| tarsinge wrote:
| Problem is the day Google puts a similarly priced and
| more powerful chatbot similar to ChatGPT and powered by
| Gemini most users will switch without a second thought,
| and Google will get all that data about their personal
| life too. OpenAI having a free tier with powerful models
| is unsustainable, brand loyalty is a joke at this stage,
| people will not bother going to ChatGPT if the search bar
| in their browser starts a discussion with Google. I'm
| sure big players like Google know OpenAI is a temporary
| scheme to get free money, they are surfing along now but
| they are playing the long game.
| ml-anon wrote:
| You do not understand how online ads work. Please just
| stop.
| freejazz wrote:
| Yeesh
| aurareturn wrote:
| OpenAI has ChatGPT (not a social platform).
|
| You didn't state reasons why not being a social platform
| matters here.
|
| Anyways, check this out: https://openai.com/index/group-
| chats-in-chatgpt/ It seems to me you're
| comparing apples and oranges here.
|
| I don't think so. 1 billion users and a clear intention to
| deliver ads with an immense amount of data on users. That's a
| clear threat to both Meta and Google.
|
| PS. That's why Meta and Google are all in on AI. OpenAI is an
| existential threat to both in my humble opinion.
| ncallaway wrote:
| > You didn't state reasons why not being a social platform
| matters here.
|
| The network effects _matter_ so much more for a social
| platform than a chat bot. The switching costs for a user
| are _much_ lower, so users can move to a different one much
| easier.
|
| How sticky will chat bots prove to be in the long term?
| Will OpenAI be able to maintain a lead in the space in the
| long term, the way Google was over Bing? It's possible, but
| it's also pretty easy to imagine other providers being
| competitive and a landscape where users move between
| different LLMs more fluidly
| empiko wrote:
| Another reason why social media matters is that people
| actually spend their free time in all those feeds. On the
| other hand, using LLMs is much more oriented towards
| specific utilities. Having 1B users who visit you once a
| day to ask for an email proofread will not make you
| profitable.
| justincormack wrote:
| But, like search, it captures intent to buy much better,
| while looking at feeds for internatinment does not.
| Adwords worked because of that, they could capture ad
| revenue on queries that lead to sales. The amount of
| extra context in AI chat is even better, as is the
| ability to steer the conversation to different options.
| aurareturn wrote:
| No one spends their free time on Google search either.
| Didn't stop Google from being even more profitable than
| Meta.
| input_sh wrote:
| > You didn't state reasons why not being a social platform
| matters here.
|
| There's nothing to pointlessly waste your time on. You open
| it to do a thing, you either do the thing or get frustrated
| or leave. Social networks are designed to waste your time
| even when they outlive their usefulness, therefore they can
| serve you more ads.
|
| You could argue Google is the same as ChatGPT in that
| regard, but that's why Google has Adsense in almost any
| search result you click on.
|
| As for your group chats feature argument, anyone can _make_
| a social network, that 's the easy part. Getting friend
| groups to switch is the more difficult part.
|
| > PS. That's why Meta and Google are all in on AI. OpenAI
| is an existential threat to both in my humble opinion.
|
| They're all in on AI because that's what their investors
| want them to do to "not be left behind". Meta was all in
| Metaverse. And on a cryptocurrency before that (Diem). And
| on Free Basics before that. The fact that none of those
| succeeded didn't hurt them at all precisely because they
| had an infinite money glitch known as ads.
|
| They can afford to waste amounts of money equivalent to a
| yearly budget of a small country, ChatGPT can't.
| adammarples wrote:
| I think Google is the much bigger threat. I've more or elss
| stopped using ChatGPT now, it's easier to just type the
| question directly into Google and get the response from
| their AI rather than navigating to chatgpt first. Anecdotal
| but I don't see anything long term keeping people on that
| site.
| KaiserPro wrote:
| > It seems to me you're comparing apples and oranges here.
|
| apart from those oranges have ~100bn a year to spend on rnd
| and still make a profit, where as openai doesn't
|
| So yes, it is apples to oranges. but its reality.
| edm0nd wrote:
| I think the play here for OpenAI is they will eventually
| acquire reddit and that will be their first intro into a
| social platform.
|
| Then they will have a social platform that they will continue
| to use to mine AI training data from + a source of ad
| revenue.
| arionmiles wrote:
| >I think you should buy the North American version of TikTok if
| the opportunity presents itself. The future of short videos
| will be heavily AI generated/assisted.
|
| I will have whatever you're smoking. If a social media platform
| literally proves the dead internet theory, it's not making any
| money.
| csomar wrote:
| I actually believe we are speed running into this. I have
| seen way too many people watching AI generated videos and
| scrolling through them.
| MisterTea wrote:
| > short videos will be heavily AI generated/assisted.
|
| Low effort input. Low effort consumption. What a depressing
| vision of the suture. This is why I don't use social media.
| mbesto wrote:
| > Meta has 3.5 billion users and projected ~$200b revenue in
| 2025
|
| Meta makes about $200B on ads, Google makes about $235B on ads.
| Advertising is roughly 1.5% of the total GDP of the US and
| hasn't changed in 20+ years. So what you have is a big ass pie
| with a few players fighting for it that barely grows every
| year.
|
| OpenAI has to somehow:
|
| 1. Compete directly with Google Gemini and Meta's Llama for a
| piece of users pie with a product that has very little
| differentiator (functionality and technically speaking).
|
| 2. Have to prove to advertisers that their single dollar ad
| purchase on OpenAI is categorically worth more than any other
| channel.
|
| 3. Have enough forward capital to continue purchasing capital-
| intense hardware purchases.
|
| 4. Having enough capital to weather any potential economic
| headwinds.
|
| I know where my bet is.
| roflyear wrote:
| They have to compete against entities who really know what
| they are doing.
| aurareturn wrote:
| OpenAI has branding power, a clear product focused mindset,
| focused attention, and moves faster than Google and Meta.
| Nearly 1 billion users in 3 years is no joke.
|
| We're on Hacker News. Y Combinator literally teaches their
| companies that they can beat incumbents using focus and
| speed.
|
| My bet is on OpenAI. When they IPO, I can easily see them
| with $1 trillion in valuation and raise the a record amount
| of money in an IPO.
|
| If Meta and Google don't see OpenAI and LLMs as an
| existential threat, they wouldn't invest so much. I think AI
| has that potential to completely disrupt Google and Meta
| because it fundamentally changes the way people behave. It's
| a paradigm shift. It isn't just playing the same game.
| ml-anon wrote:
| You're betting on OpenAI a company that has literally never
| sold an online ad against the two kings of online
| advertising...cool.
| celestialcheese wrote:
| It took tiktok just 5 years to go from ~no revenue to
| ~$12b annual in the US.
|
| ChatGPT has roughly the same MAU as tiktok. I don't see
| why their ad business wouldn't meet or exceed what tiktok
| was able to do in less than 5 years.
| mbesto wrote:
| 12B and 200B is a HUGE difference...especially in a 5
| year time span.
| Barrin92 wrote:
| Because TikTok is free, had no competitors and network
| effects given that it is a social media platform. ChatGPT
| already depends on subscription income, has to compete
| with companies that can offer the same service for free
| and has no network effects because you're literally
| talking to a commodified bot
| xeromal wrote:
| I agree with the gist of your statement but the same
| could've been said for a number of new companies against
| entrenched players. Heck, I'm pretty sure google was that
| company against the existing search.
|
| You'll probably argue that this time it's different but
| no one knows what's different until it's already changed.
| apsurd wrote:
| As devil's advocate, the innovator's dilemma is said to be
| the cause of incumbent disruption. But in the case of AI,
| we're seeing incumbents over-correct into rapid AI
| adoption. It is a mess, but I wouldn't then use history to
| predict who the winners will be.
| mbesto wrote:
| > OpenAI has branding power
|
| With consumers right now? Sure, but so does WhatsApp and
| IG, both Meta properties. Meta and Google also WAY better
| brand power with advertisers. So there's that.
|
| > I can easily see them with $1 trillion in valuation and
| raise the a record amount of money in an IPO.
|
| They have agreements of roughly in $1.5T infra spend (and
| that doesn't include their own S&M and R&D spend) for the
| next 5 years. They have to have a combined amount of
| cashflow to cover that $1.5T (mix of income, debt
| financing, and stock financing) + all their other spending.
| The CFO admitted that they may need to bail out data
| centers to cover this to stay solvent in the long run.
|
| > Y Combinator literally teaches their companies that they
| can beat incumbents using focus and speed.
|
| YC is literally not God when it comes to advice, so this
| point is moot. Meta and Google didn't come out of YC and
| yet still beat incumbents.
| naveen99 wrote:
| What about money spent on software developers, other
| knowledge work... AI could take 10-20% of spending on
| humans... that would be a few trillion per year.
| mkup wrote:
| I can reset my advertisement profile by creating a new account
| on ChatGPT, for Meta platforms (Facebook, Instagram and
| WhatsApp) this is not the case.
| ugh123 wrote:
| > None of them except me has Gemini or Claude app.
|
| Do they use Google docs/sheets? Or even Google Search anywhere?
| Then they have Gemini integrated in some way
| JohnMakin wrote:
| people hate ai content. if you dont believe me go into the
| comment sections of basically any IG reel these days. Plus,
| nothing locks these videos/reels into a single platform. I've
| seen so many sora videos on IG and I've yet to (and dont want
| to) use sora.
| sigmar wrote:
| People hit like and then comment "ai"... I think they love
| being mad at ai or aren't mad enough to stop hitting like.
| (Just today I saw a viral video on IG of a monkey on the side
| of a mountain path jumping onto a man's umbrella and getting
| taken away by the wind)
| ZiiS wrote:
| Raising $207B is plausible vs the dozens of Nuclear Power plants
| they also need.
| Lalabadie wrote:
| Yeah, that's the "so it can continue to lose money" part.
| yehat wrote:
| No, they can use the ideas from The Matrix for power delivery.
| ZiiS wrote:
| Whilst the rest of that documentary is spot on; the human
| battery ideas were overly optimistic.
| ripped_britches wrote:
| I heard this about Amazon for 20 years
| nasmorn wrote:
| Amazon raised like 10million. People complained about lack of
| dividends but that was at least money earned
| zerosizedweasle wrote:
| Amazon wasn't committing to larger spending in one year than
| the US defense budget.
| silveraxe93 wrote:
| 2025 US defense budget is $849.8 billion[1].
|
| Had a look and:
|
| >In total, OpenAI aims to invest approximately $1.4 trillion
| in computing infrastructure - encompassing Google Cloud,
| Nvidia chips, and data center expansions.
|
| Huh yeah fair. That's more than the yearly defense budget.
| Absurd. Though I'm sure it's not _yearly_
|
| - [1] https://en.wikipedia.org/wiki/Military_budget_of_the_Un
| ited_...
| phatfish wrote:
| The sovereign wealth funds and billionaires need
| _something_ to do with all their available cash. It 's no
| fun just watching the number increase anymore, that got
| boring quite a while ago.
| coffeebeqn wrote:
| That is such an insane bet though! How many trillions can
| they have itching in their pockets
| bpt3 wrote:
| To add to the valid counterpoints in the existing replies,
| Amazon was cash flow positive for most of those 20 years, so
| they were investing their own money back into things that could
| generate even more revenue (and profit!) for the company.
|
| OpenAI is still losing money much faster than it can make it
| and is planning to accelerate those losses indefinitely.
|
| I think the most likely outcome is that it turns into something
| like Uber, where they continue to lose money waiting for a
| major technological leap (truly unassisted and reliable AI in
| this case, fully self-driving cars in the case of Uber) and
| then pivot a bit to a largely unnecessary and poorly executed
| business model that people reluctantly use for the most part
| (with some eager advocates) but makes some money.
| Rebuff5007 wrote:
| Amazon had a product on day 1... particularly one that was
| unique and made a lot of sense for the moment it was
| introduced.
| jandrese wrote:
| Selling books online was certainly profitable, but I'm not
| sure about unique. Amazon's big success is that they had no
| particular ties to any existing publisher so they didn't have
| the corporate headwinds of "this will kill our brick and
| mortar stores and their distribution systems!".
| leoh wrote:
| No, it was unique. Being able to browse such an extensive
| collection of books and order them from your computer was
| mind-blowing.
| coffeebeqn wrote:
| OpenAI doesn't have a product? Have we existed in the same
| reality for the last 3 years? Something something fastest
| grown user base in the history of tech
| bigfishrunning wrote:
| Something Something every one of those users (even the
| paying ones!) loses OpenAI money
| reducesuffering wrote:
| People still said this about Uber as of last year, few
| realizing that they're generating $10B in profit a year now
| mrweasel wrote:
| Uber is also more or less a monopoly in many place. They took
| over the taxi industry and now drivers make less money than
| before.
|
| OpenAI has multiple competitors, who all build their LLMs for
| less money.
| outside1234 wrote:
| And unlike taxi drivers / companies, these competitors have
| much deeper pockets.
|
| It is not hard to imagine Google being able to outlast
| OpenAI for a decade and it is hard to imagine OpenAI being
| able to survive for more than another couple of years given
| that.
| mandevil wrote:
| You misunderstand the Amazon story. Amazon did two pre-IPO
| funding rounds: <1m angel round and an 8m Series A led by
| Kleiner Perkins. That's it. In contrast, OAI has raised almost
| 60 billion in 10 funding rounds, and if you RtFA you can see
| the estimates are they have to raise hundreds of billions more.
|
| For the IPO itself Amazon sold 3 million shares at $18, for a
| raise of 54m (from the IPO alone they had enough cash to pay
| off every investor up to that point). In July 2001, in the
| heart of the dotcom crash, they raised 100m by selling equity
| to undisclosed investors, and of course they have been using
| shares as part of their compensation packages for a very long
| time, but that's about it for Amazon's entire equity raises.
|
| They did raise 15b in a bond issuance a few weeks ago, their
| first bonds issued since 2022, with the money going to several
| things but mostly AI. However, since bond payoffs are very
| different from selling equity this is a very different play
| from what OAI is doing. Amazon will never pay more than a fixed
| amount for that money, capped upside to the bond-holders.
|
| The reason this is different is that Amazon has largely run
| either a small profit or a small loss, quarter after quarter,
| because they take their profits and instead of recording it,
| putting it in a bank, or dividend-ing it to shareholders they
| put it into building datacenters and warehouses and software
| and the like. But because of that enormous cash generation they
| have only rarely tapped outside investors, either in bonds or
| equity markets. OAI is not generating near enough cash to fund
| their operations, so they have been selling equity in
| absolutely enormous quantities- they have already raised more
| cash pre-IPO than any company in history and outside estimates
| like this one from HSBC call for them to blow past the amount
| they've already raised. This is fundamentally very very
| different.
| aika_london wrote:
| How to read FT for free
| mikestew wrote:
| https://news.ycombinator.com/item?id=46058125
| almostkindatech wrote:
| If you sign-up for a free account you can read FT Alphaville,
| which is the blog-style section of the FT containing articles
| like this one
| fragmede wrote:
| I'll tell you for $45/month.
| bill3389 wrote:
| It is not losing money, the whole industry haven't figured out
| how to generate revenue yet. it is the starting phase of LLM like
| we experienced in .com bubble. Is it a bubble at this point? Yes.
| Can it generate revenue in the future? Yes. Will openAI survive
| in this bubble? Maybe.
| SalmoShalazar wrote:
| It is quite literally losing money at an unsustainable rate.
| They need a path to profitability otherwise this is a massive
| boondoggle for all of the investors
| Mistletoe wrote:
| Unfortunately "all of the investors" is in reality the whole
| world's markets due to the disgusting top heavy nature of the
| SP500 currently.
|
| I have been talking to AI a lot about what portfolios will
| survive that crash. :)
| integricho wrote:
| And what is the conclusion, what will survive?
| christophilus wrote:
| Berkshire.
| bill3389 wrote:
| we are still at early age. think it as human, the early age
| is burning money. when grow older, the ability of making
| money increases.
|
| Compared with .com bubble. most .com dies, and the one who
| survived are GOOGLE, AMAZON, Tencent etc.
| LunaSea wrote:
| Yes but you need money to survive until the later stages
| mcbuilder wrote:
| Yeah, financial bubble != useless technology. Maybe coding
| agents do cost $50 per month in the long term, but I might just
| pay that for entertainment and personal stuff. Like, I don't
| even try to vibe code my job, but in the evenings having a cool
| slop generator is good times.
|
| Right now I use a Chinese vibe code plan, really good value.
| Rebuff5007 wrote:
| You seem to be complicating your thinking here.
|
| They are spending more money than they are bringing in. This
| means they are losing money.
| tantalor wrote:
| > as ubiquitous and useful as Microsoft 365
|
| What is this saying? Is this sarcastic?
|
| I don't know anybody with a Microsoft 365 subscription.
|
| I suppose the cloud storage is nice, but you can do much better;
| Google gives you double that for the same price ($99/yr).
| zerosizedweasle wrote:
| Businesses, a lot of people have it through work.
| hdjrudni wrote:
| > I suppose the cloud storage is nice, but you can do much
| better; Google gives you double that for the same price
| ($99/yr).
|
| Nuh uh. I get 6TB of OneDrive for $100/yr*. Granted, it's
| across 6 accounts.
|
| For $100, I get 2TB of Google One.
|
| Edit: OK, so they upped it to $130/yr.
| fragmede wrote:
| > I don't know anybody with a Microsoft 365 subscription
|
| I don't either, but the lesson to be learned is that you live
| in a bubble. Microsoft makes many millions of dollars a year
| off of those subscriptions. Just because the bubble of people
| you interact with doesn't mean that those people don't exist.
|
| OK no that was a lie. I know one person that has a Microsoft
| 365 subscription. I hate it when he sends me word or outlook
| document links or whatever the hell. Just use Google docs,
| dude.
| ChicagoDave wrote:
| TechCrunch: Anthropic is projecting positive cash flow by 2028,
| while OpenAI is expecting sizable losses, with cash burn reaching
| $14 billion in 2026
| pjmlp wrote:
| What about the usual capitalism point of view?
|
| If their business isn't sustainable they should go bankrupt, and
| close shop.
| Joel_Mckay wrote:
| Except the 7 firms make up >30% of all market growth, and move
| more capital than entire countries. Yes, they are hemorrhaging
| cash with every new customer, and burdening taxpayers by eating
| community electrical and water infrastructure.
|
| In terms of business, it is not sustainable:
|
| https://www.youtube.com/watch?v=t-8TDOFqkQA
|
| The hype-cycle is nothing new =3
|
| "Memoirs of extraordinary popular delusions and the madness of
| crowds" (Charles Mackay, 1852)
|
| https://www.gutenberg.org/files/24518/24518-h/24518-h.htm
| rchaud wrote:
| Capitalism makes more sense if it's thought about purely in
| terms of _individual_ self interest as supposed to something
| that leads to an efficient market on aggregate.
|
| The CEOs making big calls across the economy have already
| negotiated golden parachutes in the event of their failure.
|
| The financiers and lawyers getting a chunk of each bond deal
| they close have every incentive to raise more than what's
| actually needed. Investment funds flush with ZIRP dollars have
| every incentive to plow it back into investments to show that
| "the money is at work".
| pjmlp wrote:
| Yeah self interest is how we end with world we have today at
| the edge of destruction through various mechanisms.
| dgb23 wrote:
| Boom and bust hype cycles have always been a feature of
| capitalism, especially for advanced technology. Perhaps the
| only way to know the limit is to overshoot.
| pjmlp wrote:
| And then take the whole economy with it when blows up.
| dgb23 wrote:
| Not just the economy. We usually deal with these busts and
| crisis collectively through the public sector as well.
|
| There's also a hidden opportunity cost in regards to hype
| cycles. So much energy, attention and money flows into the
| hype, while other businesses or entire sectors get
| overlooked and underappreciated.
| paxys wrote:
| TL;DR - financial analysts look at current charts and project
| them foward by 5 years and go "wow the numbers look bad".
|
| Sure OpenAI may well be bleeding money into the 2030s, or may
| even go bust completely depending on how pessimistic you are, but
| the analysis completely skips:
|
| - They are building their own data centers, and will be less
| reliant on renting compute from Microsoft and Amazon over time.
|
| - Once the AI bubble has subsided costs for GPU purchases and
| rentals will decrease significantly. Plus there will be more
| advancements and competition in the space (e.g. Google TPUs) and
| Nvidia will no longer be able to name their own price.
|
| - We will write more efficient software for training and
| inference.
|
| - Once user growth is tapped out OpenAI will no longer need to
| have the overly generous free tier that they do today. And if
| they decide to turn up the advertising faucet these users could
| bring in a ton more revenue than in the projection. Thinking that
| every AI company combined will capture only 2% of the total
| digital advertising market is ridiculous. AI apps are already
| challenging social media for scrolling time.
|
| Basically, the entire space is evolving so rapidly that it's
| pointless to make a projection with the assumption that the
| landscape isn't going to change from here on.
| logsr wrote:
| I think you are right that the entire analysis is flawed. The
| Amazon and Microsoft "rental" deals have inflated price tags
| because of the circular financial arrangements between them and
| OpenAI, and because those future revenue streams can be used
| notionally to finance CapEx. All of the Stargate DC build is
| being done through for-profit SPVs, so the financials are
| murky, but building the infra gives them collateral for debt,
| and they are going to lease the compute to the highest bidder,
| so there is a whole scheme for getting out of the non-profit
| box, creating a self-perpetuating loop of borrowing to build,
| using what they build as collateral for more borrowing, raising
| additional revenue and hedging by leasing compute to 3rd
| parties, and then using the for-profit SPVs to cross-subsidize
| OpenAI proper. That plan has enormous risks of its own (can the
| leadership team of OpenAI effectively build a competitor in the
| hyperscale compute space?) but whatever happens, it won't just
| be straight line scaling their current deals with existing
| hyperscalers.
| raincole wrote:
| ChatGPT just launched "shopping research."[0]
|
| Hideous idea as it is, I fully expect they break even in 2026.
|
| [0]: https://openai.com/index/chatgpt-shopping-research/
| 542458 wrote:
| Honestly, this is huge for people like me who tend to over-
| research and over-think the hell out of product choices. "Find
| me a top-fill warm-mist humidifier that looks nice, is
| competitively priced against similar products, and is available
| from a retailer in $city_name. Now watch for it to go on sale
| and lmk."
|
| If they can figure out how to get the right kickbacks/referrals
| without compromising user trust and really nail the search and
| aggregation of data this could be a real money-maker.
| chneu wrote:
| Trusting AI with your shopping is very short sighted.
|
| Lol what a terrible idea. Why not just hand every decision
| you'll ever make to AI?
|
| Nobody needs critical thinking or anything. Just have AI do
| it so you save $3 and 4 minutes.
| wnolens wrote:
| Why would I want to spend 1-2h researching humidifiers if I
| can spend that time in _any_ other way, and still end up
| with a humidifier that fits my needs first try?
|
| This kind of task is perfect for AI in a way that doesn't
| take away too much from the human experience. I'll keep my
| art, but shopping can die off.
| superxpro12 wrote:
| for the same problems with amazon, youre relying on a
| computer to tell you what to buy, which is very shortly
| going to be infested with promoted products and adverts
| instead of genuine advice. The AI implementers will
| poison the responses in the name of advertising, of this
| i have zero doubt in my mind.
| underbluewaters wrote:
| 10+ years ago you could in fact just pick the best-
| reviewed product on Amazon at a certain price point and
| have a great experience! God help you if you tried that
| today.
| coffeebeqn wrote:
| Because you end up with a $1 value piece of crap that
| someone spent considerable time optimizing and faking
| reviews for LLMs instead of on the product. Basically in
| the medium term this strategy will get you temu stuff
| lossolo wrote:
| Well, you can always do the same thing that an LLM would:
| open SEO spam ranking sites "best humidifiers 2025",
| filled with referral links to Amazon or other sellers,
| which basically copy product descriptions and assign
| rankings that aren't based on any tests or real data.
| james2doyle wrote:
| How often do you buy the first result on an Amazon
| search? Because that's delegating your labour, isn't it?
| Surely the best products are getting to the top, right?
| Well no, they're being paid to get to the top. An LLM
| that has in-app shopping is gonna be the same thing
| mbesto wrote:
| > This kind of task is perfect for AI in a way that
| doesn't take away too much from the human experience.
|
| Not the current form of AI. I regularly use Project Farm
| to find the best "insert tool". In an ideal world a robot
| runs all of these tests in perpetuity covering every
| physical appliance possible (with every variation, etc.).
| However, current AI cannot do this. Obviously LLMs can't
| do this because they don't operate in the physical world.
| raincole wrote:
| Compared to what, reading Amazon reviews? Google
| site:reddit.com?
| matkoniecz wrote:
| > Just have AI do it so you save $3 and 4 minutes.
|
| Maybe I am deeply suboptimal, but typically this kind of
| decision takes me far more than 4 minutes.
| crims0n wrote:
| Fundamentally, is it really that different from being
| persuaded by an advertisement or trusting what the
| marketing says on the box?
| GuinansEyebrows wrote:
| > If they can figure out how to get the right
| kickbacks/referrals without compromising user trust
|
| i'm trying to envision a situation in which the former
| doesn't cancel out the latter but i'm having a pretty hard
| time doing that. it seems inevitable that these LLM services
| will just become another way to deliver advertised content to
| users.
| squigz wrote:
| > If they can figure out how to get the right
| kickbacks/referrals without compromising user trust and
| really nail the search and aggregation of data this could be
| a real money-maker.
|
| As another commenter points out, "not compromising user
| trust" seems at odds with "money-maker" in the long-term.
| Surely Google and other large tech companies have
| demonstrated that to you at this point? I don't understand
| why so many people think OpenAI or any of them will be any
| different?
| 542458 wrote:
| I still approximately trust (yes, I know it's imperfect,
| but so is every other source) NYT's Wirecutter, and they do
| affiliate links.
| phatfish wrote:
| For this to be useful they need up to date information, so it
| just Googles shit and reads Reddit comments. I just don't see
| how that is likely to be any better than Googling shit and
| reading Reddit comments yourself.
|
| If they had some direct feed of quality product information
| it could be interesting. But who would trust that to be
| impartial?
| smallmancontrov wrote:
| Project Farm solves the trust problem with methodology +
| video documentation and the monetization problem with
| affiliate links for every product tested.
| jgilias wrote:
| It's better in that I don't have to waste my time reading
| Google and Reddit myself, but can let a robot do it.
| james2doyle wrote:
| Do you buy the first item that pops up on Amazon for a
| search that you've made? Because that's letting the robot
| do it for you.
|
| If the answer is "no because that's an ad", well, how do
| you know that the output from ChatGPT isn't all just
| products that have bought their rank in the results?
| jgilias wrote:
| You get the sources, you click through to them to see
| what they are.
|
| EDIT: Like, have you actually tried this? If you ask it
| to summarise what Reddit is saying with sources, that's
| pretty much exactly what you get.
| wahnfrieden wrote:
| I can Google and read but it takes a lot of time
| AlexandrB wrote:
| > If they can figure out how to get the right
| kickbacks/referrals without compromising user trust
|
| This is a complete contradiction. Once there's money involved
| in the recommendation you can no longer trust the
| recommendation. At a _minimum_ any kind of referral means
| that there 's strong incentive to get you to buy _something_
| instead of telling you "there are no good options that meet
| your criteria". But the logical next step for this kind of
| system is companies paying money to tilt the recommendation
| in their favour. Would OpenAI leave that money on the table?
| I can't imagine they would.
| leoh wrote:
| Meh. Google has something better cooking.
|
| https://www.theverge.com/news/819431/google-shopping-ai-gemi...
| tarsinge wrote:
| Google is already integrating this directly in search
| https://blog.google/products/shopping/agentic-checkout-holid...
| nightshift1 wrote:
| I tried it yesterday by comparing the specs of a few low-
| budget desktops for my father. It worked well and saved me a
| lot of time and the hassle of comparing multiple tabs on a
| PC.
|
| I am a bit worried about the feature where it calls the shops
| for inventory checking. That's the whole point of having a
| website. Now we are going to have expensive AI that calls
| other AI answering machines and no value will be added.
| Meanwhile, it will become even more difficult to talk to a
| human when necessary.
| adidoit wrote:
| LLMs have high utility for coding. The PMF is so strong that even
| with just coding i feel they will see an ARPU expansion beyond
| conservative assumptions.
|
| There are adjacancies in white collar work like financial
| analysis that they will go after. All these will capture high
| ARPU usage.
|
| Consumer is not their only path to revenue but it is probably the
| easiest to model. The enterprise play to automate and accelerate
| some white collar workers is a clear target not reflected here.
| zerosizedweasle wrote:
| They've committed to spend an amount equal to the entire US
| defense budget just in October.
| skizm wrote:
| I think you mean the US _WAR_ budget! /s
| Culonavirus wrote:
| I swear on the crap I just pulled out of my ass that I'll
| spend 100 quadrillion dollars. Imaginary ones of course. Now
| pump my stock.
|
| Seriously though, massive recession is on the horizon, no one
| is going to be spending squat.
| serendipityAI wrote:
| but with coding, the users are mercenary and will instantly
| switch to a model that is better. Less sticky compared to the
| consumer product
| guizadillas wrote:
| They can get all the enterprise contracts they want but I don't
| think it will be enough
| tehjoker wrote:
| You already can't trust llm output. How will you trust it when
| its actively steering you based on profit motive?
| ragazzina wrote:
| Do you trust the result of your Google searches?
| guizadillas wrote:
| Who does?
| tehjoker wrote:
| Not really but it would be nice if we could have high quality
| non manipulative information :/
| mise_en_place wrote:
| The reason for this is that leverage is extremely expensive and
| punished in the current macro regime. OpenAI will lose money
| faster if they scale up. That's because the Fed can capitulate
| all it wants, but real interest rates and real yields won't move.
| The market is saying "pay me".
| Aeroi wrote:
| Google earned $264.59 billion in ad revenue in 2024 alone. OpenAI
| can figure it out.
| rchaud wrote:
| And all Google did was develop the world's most popular search
| engine, email host, web browser, ad network, video streaming
| site, mobile operating system and cloud office suite and
| deliver profits for 20 straight years.
| austin-cheney wrote:
| The top two comments mention that capturing, at minimum, 2% of
| the digital advertising market seems low. I disagree. I see that
| as an enormous hill to climb.
|
| The LLMs will create new content, but they aren't creating new
| business channels in the advertising industry. As an example even
| once Google achieved search domination they still didn't have
| this. They had purchase a lot of things to make that happen like
| Urchin, Adscape, DoubleClick, YouTube, and a lot more.
| anshumankmr wrote:
| I have two words: 1) government contracts 2) ad dollars
| setnone wrote:
| The third might be 'AI Device'
| Aldipower wrote:
| That are 4 words. ;-) Other then that yes, goverment contracts,
| meaning offloading the costs to the regular people. I think the
| US goes all in with AI, trying to get world dominant and
| controlling the market. But I think this is a mistake and the
| US will get into trouble with this.
| captainkrtek wrote:
| It's so sad how much money leaders will effortlessly pump into
| something like this, when we still have existential threats of
| climate change, incurable diseases, poverty, housing, and so on.
|
| Meanwhile ungodly amounts of money are being used so some boomer
| can generate a AI video of a baby riding a puppy.
| jillesvangurp wrote:
| I think they are missing a few very significant revenue sources
| that likely going to grow beyond just simple enterprise user
| accounts for Chat GPT.
|
| I'll call out two of them.
|
| Image, video, and other content generation is going to become
| more important and companies will be spending on that. We've seen
| some impressive improvements there. IMHO near term a lot of that
| stuff might start showing up in advertising and news content, the
| whole media industry is going to be a massive consumer of this
| stuff. And there's going to be a lot of competition for the
| really high quality models that can be run at scale. Five years
| until 2030 is a lot of time for some pretty serious improvements
| to land.
|
| Another area that the article skips over is agentic tools. Those
| are showing a lot of promise right now. Agentic coding tools are
| just the tip of the iceberg here. A lot of these tools are going
| to be using APIs. So API revenue is a source of revenue. There
| are applications across the entire IT industry. SAAS, legacy
| software, productivity tools, etc.
|
| Yes 207B is a lot of money. And there's no guarantee that OpenAI
| comes out on top "winning" all these markets of course and we can
| argue about how big these markets will be. But OpenAI does have a
| good starting position and some street credibility here. It's a
| big bet on revenue and potential here. But so is betting against
| all that and dismissing things. And there's a lot of middle
| ground here.
| olelele wrote:
| This sounds very similar to the Tesla stock value hype train.
| It's all a gamble on the promise of tech that isn't quite there
| yet.
| qwertox wrote:
| What I don't understand is how Elon will ever compete with
| Chinese humanoid robot pricing and output. He's known for not
| caring about privacy, so there's no real difference between
| buying a Tesla one or a Chinese one. Both will look and
| listen into your home and transfer as much data as possible
| to their true owners.
|
| He congratulates Jeff Bezos for New Glenn, and rightly so,
| but he's absolutely silent about the Chinese robots. One has
| to admit that they're already ahead of the US. This comes
| from a German who well recognizes how far behind Germany is
| in comparison to the US, in regards to any digital
| technology.
| input_sh wrote:
| Oh that's easy: as soon as China gets good enough to
| compete at any market seen as vital, "the west" either
| makes up some nebulous national security threat to cut them
| off or imposes high enough import taxes to make the home-
| made versions cheaper in comparison. The same way "the
| west" has done it with cars, phones, and social media in
| recent years.
|
| There is no free market competition between "the west" and
| China, they're two completely separate markets for a
| reason. You're only allowed to cross that isle in a limited
| capacity, as soon as you get big enough to be seen as a
| legit threat, you're getting cut off. Works both ways,
| Tesla can sell in China, but they can't beat BYD. Apple can
| sell iPhones, but only because their market share is not
| big enough to matter.
| qwezxcrty wrote:
| I'm not really against your point but I just quickly
| checked (and it agrees with my personal observation),
| iPhone have been the very most popular phone brand in
| China for many years and recently the market share grew
| beyond 25%. I would not say that's not big enough to
| matter.
| input_sh wrote:
| You're confusing recent sales figures with overall market
| shares. Both Tesla and Apple use this neat little trick
| to their advantage, not just in China, but also in the EU
| and I'm sure in other places.
|
| They both sell only like 2-3 models at a time, always
| heavily preferencing one of them in marketing, and then
| use that to claim they have the "best selling phone in
| the market". Which is true, but is not the same as having
| that percentage of the overall market share as a brand.
|
| Nearly every Tesla sale is a Model Y sale, and nearly
| every Apple sale is an iPhone 17 sale. This does not
| apply to other brands such as BYD, Geely, Huawei, Oppo,
| (Samsung, Volkswagen,) where you can walk into a store
| and pick between about a dozen models targeting different
| niches.
|
| On top of that, Apple _just_ started selling iPhone 17,
| so yes, if you Google it, you find out that they 've
| "reached 25% of the Chinese market" and not realise that
| this is what happens every Q4 simply because that's when
| they start selling new models. That is not the same as
| having 25% of the _overall_ market share at all. Overall,
| both Tesla and Apple are around fifth most popular
| brands.
| quotemstr wrote:
| > how Elon will ever compete with Chinese humanoid robot
| pricing and output?
|
| ... with said humanoid robots?
|
| While it's true China's manufacturing sector can outproduce
| the west's right now, ubiquitous autonomous humanoid robots
| can level the playing field to a meaningful extent.
| seanmcdirmid wrote:
| Which is why China is investing a lot of resources into
| developing those while the west just kind of continues on
| with muted efforts.
| vel0city wrote:
| Yeah, considering Teslas upload imagery from their cars to
| datasets their employees have been known to access (and
| abuse that access as well) there's practically 0% chance
| I'd ever let a Tesla camera inside my home. Its bad enough
| they're recording me when my neighbors drive by and when I
| walk around, I wouldn't want them in my home on a device
| that's designed to be able to go through my stuff.
| wiether wrote:
| > IMHO near term a lot of that stuff might start showing up in
| advertising and news content, the whole media industry is going
| to be a massive consumer of this stuff.
|
| One of the candidate for mayor of New York ran a whole AI video
| ad campaign.
|
| Half of the real estate listings have AI remodeled pictures.
|
| Probably a quarter of the printed ads I see each day are AI
| generated.
|
| It will only increase, but it's already here.
| wahnfrieden wrote:
| Real estate agents only use AI because it's cheaper than
| paying $70 CAD per image for human-made images. There's a cap
| on how valuable the AI generated images are.
| badc0ffee wrote:
| The last time I sold a house, a professional photographer
| took some beautiful photos, gave the realtor like 60-80 and
| he picked 40 for the listing. He absorbed the cost of that
| with his commission. No way in hell did he pay $2800-5600
| (I'm also in Canada) for those photos.
| wahnfrieden wrote:
| I'm referring to virtual staging, not photography
| KaiserPro wrote:
| > Image, video, and other content generation is going to become
| more important and companies will be spending on that. We've
| seen some impressive improvements there.
|
| They are assuming that people _want_ automated content enough
| to pay for it.
|
| Like at the moment its great because its essentially free, but
| paying >200billion?
|
| Are we assuming that we can automate the equivalent of
| instagram, netflix/disney and whatsapp _and_ make advertising
| revenue?
|
| I think the unmentioned pivot is into robotics, which seems to
| have actual tangible value (ie automation of things that are
| hard to do now)
|
| but still 200billion in r&d
| LogicFailsMe wrote:
| I would assume that generative AI will be able to make
| endless hours of personalized reality TV content that will
| hit a surprisingly large demographic. And then it can use
| recommendation algorithms to distribute that reality TV AI
| slop to all the people that might or might not want it in
| order to turn it profitable. Evidence: all the god-awful
| foreign reality TV on Netflix currently.
|
| It's a bit harder to replace Disney at this point, but give
| it 20 years. I'm bullish on AI slop on par with The Apple
| Dumpling Gang or Herbie Goes to Monte Carlo within a decade
| or so. Evidence: The rapid evolution of AI generated video in
| the past few years extrapolated into the future.
| fatbird wrote:
| I keep thinking about how, 20 years, 3D printers became
| accessible for tech/price, and there was a lot of talk
| about how we'd all just print what we need (pretty much
| like in Stephenson's book _Diamond Age_ ), and you'd get
| rich selling digital patterns for material goods.
|
| Instead, we got the elevation of the handmade, the
| verifiably human created, typified by the rise of Etsy. The
| last 20 years have been a boom time for artists and
| craftspeople.
|
| I keep seeing AI slop and thinking that all this will do is
| make verifiably human created content more valuable by
| comparison, while generative AI content will seem lowbrow
| and not worth the cost to make it.
| exasperaited wrote:
| Creative people are on the whole a lot better at keeping
| AI slop out of art and craft fairs than they have been
| with the lazier output of 3D printers, CNC, laser
| engravers and off-the-shelf resin mould art.
|
| It is as if the relatively unspoken feelings about the
| downsides of technologies as a gateway to art have been
| rapidly refined to deal with AI (and of course, even the
| CNC and laser engraver people have common cause).
|
| But I think it is fair to say that if they feel success,
| there will be a growing pushback against the use of 3D
| printers, eufyMake resin printing and CNC in a niche
| where hand tools used to be the norm.
|
| And speaking even as someone who has niche product ideas
| that will be entirely 3D printed/CNC cut/engraved, I
| don't really disagree with it. I am mostly not that kind
| of creative person (putting aside experimental
| photography techniques) and I see no reason why they
| shouldn't push back.
|
| The reality is that "craft" fairs are an odd mix of
| people who spent a lot of time refining their art and
| selling things that are the work of hours of expressive
| creativity and effort, and table upon table of glittery
| resin mould art and vinyl cut stencil output stuck on
| off-the-shelf products. I think AI might help people
| refine their feelings about this stuff they once felt
| bad/incorrect/unkind about excluding.
|
| It's a bit like the way the art photography market is
| rediscovering things like carbon printing, photosensitive
| etching and experimental cyanotype, and getting a lot
| more choosy about inkjet-printed DSLR output.
| LogicFailsMe wrote:
| Sturgeon's law: 90% of everything is crap. Ergo we
| shouldn't be surprised if AI can replace 90% of supposed
| art and media in the long run. Not sure I will
| particularly notice since I can't stand most media
| already.
|
| But good luck with that remaining 10% AI...
|
| I think the reason 3D printers can't print anything is
| because most things are mixed media and 3D printers
| aren't so great at that yet. There are also issues with
| topology and the structural quality of 3D printed things
| compared to things put in a mold. And that's not entirely
| unlike people (who I once would have thought would know
| better ) oversimplifying the engineering and scientific
| challenges of AI for it to be human equivalent or better.
| Hamuko wrote:
| Yeah, I have a hard time believing that there's a massive
| demand for AI-generated videos and images. Like, why would
| the news industry want to generate images and videos with AI?
| It's not news. The advertising industry maybe, but even then
| it's probably not your top brands that go full in on it. If
| you see that all of Apple's adverts are generated with AI,
| it'll probably lower your brand perception.
|
| We already put more importance on handmade goods vs. factory-
| made, even if the latter is cheaper and better quality. I
| have my doubts about humanity collectively embracing content
| generated from prompts by black boxes.
| hotsauceror wrote:
| The cost of operating television studios and paying related
| staff, including on-air talent, is probably significant. I
| can easily see major news networks turning to AI-generated
| newsreaders. TikTok is already full of AI voiceovers; seems
| like a short leap, to me.
| Hamuko wrote:
| Is the cost of on-air talent so great that you want to
| replace recognisable faces of your network with a generic
| voiceover?
|
| Personally, I consider TikTok very different to news
| networks. TikTok is also primarily vertical video. Are
| news networks going to do that too?
| hotsauceror wrote:
| I don't quite follow this point. Master Chief is
| recognizable. So is Lara Croft. So is Darth Vader's
| voice. Networks could easily develop virtual
| personalities with distinctive, bankable, appealing
| characteristics.
|
| They wouldn't have off-air scandals, require insurance,
| pensions, teams of wardrobe and makeup artists, security
| details; They wouldn't need to travel. And that is just
| the on-air talent. You can replace thousands of tv
| studios all over the world with a handful of workstations
| and compute power.
| Hamuko wrote:
| And why haven't they? Master Chief has been around since
| 2001, Lara Croft since 1996 and Darth Vader since 1977.
| The technology has been around for ages, and as far as I
| know, no networks have opted for virtual anchors.
|
| Just from where you are pulling the data that on-air
| personalities are too expensive?
| hotsauceror wrote:
| I don't have a good answer for why they haven't already.
| I have wondered about the possibility of doing this for
| 10 years or more.
|
| "The data that on-air personalities are too expensive?"
| It doesn't seem to me , for the purposes of this
| conversation, that identification of a cost center
| required a quantitative analysis. The cost of human
| talent is non-zero, presumably large enough to merit
| scrutiny, and unpredictable; that is sufficient, to my
| way of thinking. So is the cost of the equipment and
| infrastructure to capture and transmit video image of
| that human talent, and the humans who maintain and
| operate that infrastructure.
|
| We've seen several decades of human cost-reduction
| initiatives, across multiple industries and fields of
| endeavor, so I'm taking that as evidence that if there is
| a cost that can be reduced or removed, someone somewhere
| is looking at doing so. Everything from assembly-line
| automation, to switching to email over inter-office memos
| and mailrooms, to the abandonment of fixed-benefit
| pensions, to self-service kiosks in fast-food
| restaurants, demonstrates that costs will be cut where
| they can be cut.
| vel0city wrote:
| I think there's a good chance people would watch an
| entirely generated character read the news, so long as
| they find the presentation reliable according to their
| world view.
|
| Tucker Carlson or Wolf Blitzer or Lester Holt might as
| well be cartoon characters to me. There's practically
| zero chance I'll ever meet them in person, especially
| more that we'd have any kind of real human connection.
| What one cares about is if they think the overall source
| is reliable and what kind of information (or
| disinformation) their orgs are pushing to the people.
| Having them be actual meatbags is a liability, they'll
| pop too much ambien one night and say some pretty
| terrible things on social media compared to only ever
| being a highly curated output of the organization. Unless
| they pull a Tay.
|
| https://en.wikipedia.org/wiki/Max_Headroom
| KaiserPro wrote:
| > TikTok is already full of AI voiceovers
|
| And it makes it look/sound cheap.
|
| I think thats the biggest issue they will face. For
| example, a company that uses avatars and emojis just
| looks cheap, because it is cheap to do.
|
| Are you going to pay for cheap looking TV, especially
| when you know its shit?
|
| But then the more important thing to remember is that
| news isn't expensive because of the news readers, its
| expensive because it costs lots to operate a news
| network. If you news anchors are costing millions, you
| have a chat show, not a news programme.
| xp84 wrote:
| > We already put more importance on handmade goods vs.
| factory-made, even if the latter is cheaper and better
| quality
|
| I guess if 'importance' means sentimentality, however, the
| "factory-made things" industry certainly makes the vast
| majority of the money to be made in manufacturing. Handmade
| is a niche. I think the argument is that whether people
| prefer it or not, AI-generated content will have a major
| place in the marketplace for content because of its natural
| advantages. In other words, a movie heavily generated with
| AI won't win any Oscars but there is a world where such
| things would make a lot of money and some of that money
| would flow to OpenAI.
| tapoxi wrote:
| I have a hard time understanding why I would want to waste
| my time watching something generated by AI when they
| clearly didn't value the time spent making it.
|
| I have a limited lifespan, I'm not going to use that to
| consume slop.
| Hamuko wrote:
| That's generally been my principle too. If it wasn't
| worth making by a human, why is it worth consuming by
| one?
| williamdclt wrote:
| > Yeah, I have a hard time believing that there's a massive
| demand for AI-generated videos and images. Like, why would
| the news industry want to generate images and videos with
| AI? It's not news. The advertising industry maybe, but even
| then it's probably not your top brands that go full in on
| it. If you see that all of Apple's adverts are generated
| with AI, it'll probably lower your brand perception.
|
| (disclaimer: I don't work in ad and don't know more about
| it than the next person)
|
| Whether the end product (the ad) is AI-generated or not is
| almost irrelevant. The whole production chain will likely
| be AIfied: to produce one ad you need to go through many
| concepts, gather reference images/videos, make prototypes,
| iterate on all that, and probably a ton of other things
| that I don't know about... The final ad is 1 image/video,
| but there's been dozens/hundreds of other images/videos
| produced in this process. Whether the final ad is AI-
| generated or not, AI will almost certainly (for better or
| worse...) have a major place in the production chain.
| giva wrote:
| Actually, I sense a mounting "AI fatigue". Angry comments
| under AI contents. Social media accounts that proclaim to be
| "AI Free". I was thinking today that the killer app for AI
| could be a filter that automatically exclude all AI content.
| __s wrote:
| There's a huge vegan market segment but meat industry still
| plods along
| dingnuts wrote:
| at least it's possible to be a vegan. imagine trying to
| be a smartphone vegan. I hope we're not headed there with
| this abominable technology. I hate using it and don't
| want to be forced
| gishh wrote:
| Roughly 2% of the US is vegan. About 5 million people.
|
| This would be why the meat industry "plods along" century
| after century. For every vegan there are 49 people who
| eat meat, and probably 35 people who feed their pets
| meat.
|
| There is actually a huge market for animal meat and it is
| the vegan industry that plods along.
|
| In fact, what even _is_ the vegan industry? Or do you
| mean it's basically marketing hype for companies that
| combine plants in various ways to sell as food?
| __s wrote:
| Yes. Most people don't care enough to change their
| behavior. Others think about it & decide it isn't for
| them
|
| Industry is plant based food, certification orgs, vegan
| charities, consulting, books (both recipes & lifestyle
| advocacy), content creation, ...
| exasperaited wrote:
| It is very obviously there. People are not simply accepting
| the AI-bro justification that one day they won't notice the
| difference so it's all fine.
|
| Ordinary people are understandably either exhausted by or
| angry at AI content, because it is relentless and
| misleading, and because they know instinctively that the
| people who want this to succeed also want to destroy
| employment and concentrate profits in the hands of a few
| Silicon Valley sociopaths.
| gosub100 wrote:
| Google are experimenting with different filters that
| intentionally blur the lines between real and fake video in
| their shorts. A creator I follow who makes human-in-shot
| videos suddenly looked fake, like some animation filter was
| applied. I commented on how bad it looked, and someone said
| YT are doing it to people's videos as some sort of "trial".
| The effects were to make the human look more AI generated.
| The only use for this I can surmise is to make AI content
| even harder to detect.
| __s wrote:
| https://www.reddit.com/r/PartneredYoutube/comments/1lno8u
| b/i... first I heard of this, looks like they're calling
| it ai upscaling
| 34679 wrote:
| I agree. Back in the 90's there was plenty of skepticism,
| along with some mockery, surrounding the internet. But you
| never saw headlines like "Lawyer caught using the internet"
| or "Artist busted using the World Wide Web".
|
| With AI, it's different.
| barbazoo wrote:
| > They are assuming that people _want_ automated content
| enough to pay for it.
|
| I'm assuming gen ai will supplement so instead of ten artists
| producing content you'll have three orchestrating and
| correcting but the output will be indistinguishable from what
| it was before. Just now the margin is much higher.
|
| I never think of direct to consumer sales in this context.
| gorbot wrote:
| Anecdotally I've seen lots of anti AI posts on instagram
| from gen-z accounts, and on YouTube ive seen "ai not used
| to make this music" in the description.
|
| Also anecdotal, but I do think there's gen z anti-ai
| sentiment, these kids are joining a world where they will
| never own a house and have bleak prospects and now even art
| is something they can't do if AI takes off, so the market
| might not be there
|
| Seems like older people love AI art, people over 50, which
| is a sizeable market don't get me wrong, but in 10-15 years
| idk
| KaiserPro wrote:
| But whats the USP of that though?
|
| > indistinguishable from what it was before. Just now the
| margin is much higher.
|
| In both music and TV/film there has been an explosion in
| productivity. A kid in a bedroom with a mediocre microphone
| can produce something that sounds 95% as good as something
| that took a team of ten to do at a big studio. The same
| with VFX. If you compare "the golden compass" from 2006 to
| the series in ~2020 the quality of the TV show is much
| higher, at a higher resolution and has more VFX shots in
| it.
|
| Both music and TV, the margins have dropped precipitously.
|
| I just cant see how making it easier will bring up margins.
| nitwit005 wrote:
| The whole VFX market is something like 10 billion USD a
| year.
|
| Which is a huge amount, but if they only capture a piece of
| it, it might not amount to much compared to their spending.
| vl wrote:
| Everything professionally produced you currently see uses a
| lot of CGI, and you can't even tell.
|
| Essentially what they are doing is cheaper, more accessible
| CGI. And in the same way at it is now, you are not going to
| be able to tell it was used in expensive productions and will
| be able to see it in the cheap productions.
| KaiserPro wrote:
| As an ex VFX infra guy, I can totally tell.
|
| But to your point, if we take all of TV production _world
| wide_ I doubt thats going to add up to 100 billion spent on
| set extension /characters/de-aging/fuckit fix it in post.
| And thats keeping spend at the same rate. (not to mention
| the recent peak spend on TV)
|
| For openAI to make money it has to be an order of magnitude
| cheaper, quicker and quality, _and_ be the lead so that
| people spend AI bucks with them. Rather than having a VFX
| company tune an opensource /weights model.
| rzerowan wrote:
| The main thread through the case laid out has a fundamental
| flaw "assumes a spherical cow in a vaccuum" . There are
| cheaper/faster more open competitors out there doing as much as
| OAI and getting integrated in real product pipelines across the
| planet.
|
| Its not a Blueray vs HD-DVD situation (winner takes all and
| competition dies on the vine) or early Google vs Yahoo Search i
| would posit its more like bitkeeper vs git - and will probably
| eveolve into a git/hg/bazaar type situation. Costs will only
| keep dropping and the easiest/cost effective options will get
| faster uptake in the backend dev world where it matters.If im
| integrating a LLM and the whole field can kinda do the
| equivalent capex/opex will push the decision.
| aprilthird2021 wrote:
| But there's fierce competition since no moat. How will
| generated images and videos avoid being a stock photo
| situation?
| techblueberry wrote:
| I think actually selling media is going to be tough. 1: you
| have to beat the current price point so people will use it, 2:
| it can't be too cheap or you can't make money. That mad market
| price point makes it hard to get right. The more content the
| fewer eyeballs, meaning the less value, meaning people willing
| to pay less. If it makes making movies a lot cheaper, then
| there's a lot less money to be made.
|
| The thing about tech is it has to scale to meet tech
| valuations, and there's a reason instagram basically gives
| content creation tools away for free.
| conscion wrote:
| These are all commodity use-cases though. Google, Meta, and
| Anthropic already all have competing products of equivalent
| quality and customer pricing is being driven down aggressively.
| paulddraper wrote:
| This is why consensus will never produce innovation.
|
| OpenAI has many plausible monetization avenues. (Whether it will
| execute on them -- a fair question. But acting like they just
| don't exist is low IQ.)
|
| Take _ONE_ example: online shopping.
|
| Online shopping is $6-7 trillion per year, growing 7% annually.
|
| Suppose ChatGPT captures 10% of that with a 5% fee. (Marketplaces
| like Amazon and Walmart charge 15%. Ebay is 5%.) That's $200B
| over five years.
| bofadeez wrote:
| Meanwhile Google does not have to raise money and they're
| profitable whether AI works or not.
| fpauser wrote:
| AI is/will be the mother of all bubbles.
| yk wrote:
| It's really hard for start ups to compete for VC money: "Hello
| Mr. VC I'm going to burn your money for buzzword" just no longer
| works, first openAi has an industrial buzz word generator, second
| their money burning plan scales much better than my money burning
| plan.
| smallmancontrov wrote:
| Yeah but they aren't a diversified portfolio of money burning
| plans and that's the real secret to responsible investing. I
| think Warren Buffet said that.
| 0xbadcafebee wrote:
| I just realized that other industries are way larger than AI.
| Assuming they capture the entire advertising market, only $390
| Billion was spent in the US last year. Compare that to health
| care, where 4.3 Trillion was spent in the US last year, or
| commercial banking's revenue of 1.5 Trillion, commercial real
| estate's 1.5 Trillion, gasoline stations' 1.10 Trillion, etc.
| What's amazing is, despite the fact that AI isn't making much
| money, is taking on considerable debt, and isn't even assured to
| be all that useful, _one third of the stock market_ is now just
| AI crap. The economy is going to collapse because of a small,
| brand-new industry. This... shouldn 't be possible.
| nprateem wrote:
| I know right it's like people are buying future value rather
| than based on current revenues or something.
|
| How long did Apple keep going up following the smartphone
| revolution?
| Glemkloksdjf wrote:
| Build a system which can read MRI images, now AI took over the
| whole MRI Analysis sector.
|
| Let AI diagnose the avg cold, now AI took over the household /
| local doctor for 90% of cases.
|
| Use AI for support, now AI took over the call-center business.
|
| AI can already code. It might not be perfect, it might not be
| always good but NO ONE assumed that 2025 some matrix
| multiplication can mimick another human being so well that you
| can write with it and it will produce working code at all.
|
| thats the hype, thats the market of ai.
|
| And in parallel we get robotic too. Only possible because of
| this AI thing. Because robotic with ML is so much better than
| whatever we had before. Now you can talk to a robot, the robot
| can move, the robot can plan actions. All of these robots use
| some type of ML in the background. Segment Anything is possible
| because of AI.
|
| Thats the reason why this 'AI crap' is so hyped.
| freejazz wrote:
| I don't understand why people think that AI "being able to
| code" has any bearing on anything else that humans do
| Glemkloksdjf wrote:
| Because AI doesn't mean 'AI' it means massive compute,
| massive amount of data and machine learning.
|
| All of that pushes everything forward: LLMs and any other
| architecture to LLMs, GenAI for images, sound and video,
| movement for robotics, image feature detection.
|
| Segment Anything 2 was a breakthrough in image
| segmentation, for example.
|
| The latest Google Weather model is also a breakthrough.
|
| All progress in robotics is ML driven.
|
| I don't think any investor thinks that OpenAI will achieve
| AGI with an LLM. Its Data + Compute -> Some Architecture ->
| AI/ML Model.
|
| if it will become the golden model which will be capable of
| everything or a thousand expert models or the Model of
| Expert model, we don't know yet.
| henry2023 wrote:
| Why is there a shortage of radiologists today if image
| categorization was solved 15 years ago?
|
| Have you ever talked to AI Support?
|
| It's easy to name a random industry and assume you'll
| automate it with a few clicks. It's harder to actually do it.
| cma wrote:
| Stock market isn't the economy. If wages are largely stock comp
| at high valuation they get clawed back in a crash.
| Infrastructure spend is massive but at 70-80% margins for
| nvidia real cost to economy is cut by that much, aside from the
| datacenter and power build out which is definitely a big
| portion.
|
| It could unwind cleanly as long as we don't let it infect the
| banking system too much, which it has started somewhat doing
| with more debt financed deals instead of equity financed and
| probably book values making it into bank balance sheets.
|
| Truck driver wages are $180-280 billion annually and seems like
| something that will get replaced and should justify $1 trillion
| of the spend or more, economically. I think Tesla for instance
| only spends single digit billions in R&D most years though, so
| the spending may not be going to where the most immediate
| solid/lasting economic impacts will come from. I'm not sure
| what Waymo's spend is.
| lysecret wrote:
| Now compare on free cash flow
| zahlman wrote:
| > This... shouldn't be possible.
|
| 1. Quite a lot of companies are not publicly traded, and
| therefore are not reflected in the stock market. AI companies
| have an incentive to be publicly traded because it's all
| venture-capital stuff.
|
| 2. Technology in general is always going to be over-weight
| _anyway_ because these are companies that tend towards
| "growth" (re-investing profits into future expansion, offering
| to buy back stocks at a higher price as a means of compensating
| investors, etc.) rather than "value" (compensating investors by
| paying out an explicit cash dividend on shares). This tends to
| push their P/E multiples higher.
|
| 3. Publicly traded companies, and thus stocks, generally are
| valued based on speculation about future cash flows, not
| according to current holdings.
|
| 4. The companies that you have to add up in order to come to a
| figure like "one third of the stock market", are doing a lot of
| things outside of AI. People still play video games, and they
| still do GPU-accelerated data analysis with conventional
| techniques. People still want their computer to include an
| operating system, and still use their social media to talk to
| accounts that they know are operated by people they know in
| real life.
|
| 5. The term "AI" is now used as if it exclusively referred to
| LLMs, but other AI systems have existed for a long time and
| have been actually accomplishing real things in the economy.
|
| > The economy is going to collapse
|
| There are a great many people out there who have predicted a
| hundred or so out of the last seven recessions. You don't know
| this, and there are many reasons to doubt it.
|
| Suppose some anti-AI deity snaps its fingers tomorrow and every
| LLM simply spontaneously ceases to function. It's not as if
| we've lost the knowledge of how to do things without LLMs. It's
| not as if the things we created without LLMs disappear, or
| anything else. We at worst, at a very conservative, scare-
| mongering estimate revert to that level; and things were pretty
| tolerable at that level. And technologies that are _not_ LLMs
| have also advanced since the release of ChatGPT.
| redox99 wrote:
| AI market is all the jobs that could be replaced by AI in the
| future. People paying 20USD/month for ChatGPT is a drop in the
| bucket.
| Razengan wrote:
| Yeah this is ridiculous when you consider all the dorps who
| quail "Fix the existing problems of the world first!!!" when
| things like space exploration and other scientific endeavors
| without an immediate benefit are discussed. Where are they now?
| fpauser wrote:
| Can we just stop putting the "I" behind the "A"? Thanks.
| AndrewKemendo wrote:
| They aren't going to get new equity funding they are going to go
| public so they can start issuing bonds.
| luxuryballs wrote:
| "We're gonna need more fuel for this fire!"
| lvl155 wrote:
| I don't think LLM leader is going to come out of this AI race on
| top. OpenAI is like Yahoo! in my view. They were there in the
| beginning and led by default. Someone somewhere will be the
| Google of this era. It won't be LLM but the next step. Leaps and
| bounds better than LLM. I also think we won't use even 1/100th of
| the energy needs projected right now.
| kilroy123 wrote:
| I agree. Or someone who combines a lot of tough to build tech
| right at the perfect time.
| logsr wrote:
| Google may very well be the Google of this era. They have
| demonstrated the ability to maintain parity on the engineering
| side, they have a long running advantage on OpEx with TPU, they
| have the most data, and the most trusted brand.
|
| AI collapses the value of IP across the board, because AI
| trends towards being the only IP, which means that the
| marketplace will be defined by operational efficiency, ability
| to build and run systems at massive global scale, access to
| capital, and government connections, so Microsoft, Amazon, and
| Google probably stay on top.
| lvl155 wrote:
| They barely caught up after leaking talent for the past 4-5
| years. I am not drinking the koolaid. A lot of talented
| people are going back home to China. I am 99% the next Google
| will come out of Asia.
| jasondigitized wrote:
| Google will be the Google of this era. They just got a slow
| start but the flywheel they already have in place is now
| spinning in their advantage.
| ec109685 wrote:
| That's 207b / 8b people / 4 years / 365 days or 1.17 cents a
| person.
|
| If ChatGPT is delivering that, they should have no problem
| raising money.
| PunchyHamster wrote:
| That if competition doesn't under-cut you and you convert at
| least part of the free users in the process.
|
| And with near every level of hardware getting some kind of AI
| acceleration a lof of the uses might even be local
| mr_00ff00 wrote:
| I don't know if this is ridiculous, but I'm curious if access to
| LLMs will one day be priced like the Bloomberg Terminal or
| something. Where access for one user is like 20,000 dollars.
| Maybe less than that, but like 5k per person.
|
| Seems crazy by most software standards, but when Bloomberg became
| a software only program (they stopped selling physical terminals)
| and people were shocked when they paid almost nothing for excel
| but then so much for the second tool they needed as traders.
|
| Yet it still is priced so high and people pay.
| ronsor wrote:
| The difference is that Bloomberg Terminals were always
| expensive, and so people expected to pay. LLMs are basically
| free (subsidized) at this point, and people are very sensitive
| to large price increases.
| mr_00ff00 wrote:
| Sure and I'm sure there would be a huge shock, but simple
| economics would dictate that if that's the true equilibrium
| of price for LLMs to be economical, then it would have to get
| to the price eventually
| WhyOhWhyQ wrote:
| I think there could be a few directions. Consumer level LLM
| usage will become free. Corporate-grade LLM use will cost a lot
| of money. Maybe the highest grade LLM use will be regulated and
| only done through government labs.
| techblueberry wrote:
| What's a high grade LLM though in such a competitive
| environment? And if China releases more high grade open
| source models, that pricing model is f8cked.
|
| One interesting thing I heard someone say about LLM's is this
| could be a people's innovation, basically something so low
| margin it actually provides more value to "the people" than
| billionaires.
| WhyOhWhyQ wrote:
| It just seems hard to imagine that simultaneously running
| 1,000 instances of claude code will be cheap in the next
| decade, but maybe running 1,000 instances of claude-like
| tools is what a corporate LLM subscription will give. And
| maybe running 1,000,000 or a billion such models is what
| the government will do once a contract gets awarded.
|
| Just random speculation though.
| moralestapia wrote:
| There's good quality LLMs you can run for free today, so no.
|
| The trend is going the opposite way, intelligence too cheap to
| meter according to @sama.
| razingeden wrote:
| that $18,000-$24,000 bloomberg terminal had a 300bps modem
|
| it took longer to generate a page of content or get a complete
| answer than a free LLM takes on an i5 CPU.
|
| (ex: llamaGPTJ for linux CLI)
|
| its missing live market data and news but incorporating that
| with something akin to openrouter would be trivial.
| 383toast wrote:
| chinese open source models disagree with you
| throw_m239339 wrote:
| It's my understanding that even the paid version ChatGPT is
| highly subsidized so yeah, the prices will have to be raised
| quite substantially to meet profitability.
| nrhrjrjrjtntbt wrote:
| Simple.
|
| 1. Is it worth 20k to anyone? Well depends on the advantage but
| maybe yes. People are dropping 200-1000 a month already as
| ordinary devs.
|
| 2. Is there competition? Yes lots. To get to 20k one model
| provider needs a real killer edge that no one else can keep up.
| Or alternatively constraints push prices up (like memory!) but
| then that is not margin anymore.
| kilroy123 wrote:
| I think that's exactly what will happen but with robots.
|
| A robot the cooks, cleans, and talks to you.
|
| Many won't afford it so they'll maybe rent one by the day or
| for X number of hours.
| ayaros wrote:
| I'm sure they'll have no issues raising the funds. If they run
| into trouble, they can always ask ChatGPT for advice.
| smileson2 wrote:
| This should be a easy barrier for OpenAI, cgpt has only been
| public for 3 or so years and they are already close to mediating
| most of the global economy and human decision making
|
| AI credits will likely replace current money anyway
| sethops1 wrote:
| I hope this is sarcasm
| saguntum wrote:
| For context, this is close to all venture capital spending in the
| US in 2024 ($215B): https://nvca.org/press_releases/nvca-
| releases-2025-yearbook-...
| andy_ppp wrote:
| Chill out everyone, all we will need to do is ask the AGI how to
| make money on the investment!
|
| 1. Make AGI
|
| 2. ???
|
| 3. Infinite profit!
| venturecruelty wrote:
| You need to ask it to invent a time machine first so you can go
| back in time to build the AGI first, naturally.
| venturecruelty wrote:
| How many $20 per month subscriptions will that take?
| tim333 wrote:
| 172 million. Or so.
| fragmede wrote:
| if you make them $200/month subscriptions, that's only 17
| million subscriptions. Or so.
| tim333 wrote:
| I was thinking the 172 figure was $20/mo times five years
| but in reality if OpenAI had a bunch of such users they'd
| value them at about 20x annual revenue and raise on the
| stock market so they'd only need like 40 or 50 million
| subscribers.
| mbrumlow wrote:
| Please let me invest...
| mvkel wrote:
| This seems... completely reasonable?
| liamconnell wrote:
| Unfortunately for OpenAI, they are not positioned to capture
| value from any of the "big margin" use cases that they highlight
| as key to their future. I think all of these are pretty
| unrealistic for them:
|
| - Revenue sharing from drug discovery (called out by OpenAI CFO):
| Why would a pharma company give away the upside to a commoditized
| intelligence layer? Why would OpenAI have a more compelling story
| than Google Deep Mind, which has serious accolades in this space?
|
| - Media generation for ads and other content: For ads, OpenAI is
| facing off against Google, Meta and Amazon, all of which have
| existing relationships with advertisers. For the foreseeable
| future, AI content will be a major discount product compared to
| humans. OpenAI will not get to charge $1M for an ad like a
| production company does. So the TAM of ad production (~$50B)
| shrinks below $1B because AI deflates prices so much.
|
| - Other agent use cases: OpenAI doesnt have a surface to build
| these on. Google has chrome, Microsoft has office, Apple has
| OS's. The other use cases like coding will be a low-margin
| competition between model providers until some of them throw in
| the towel. The players with the best cash position win - and
| thats not OAI.
|
| I think the place that they could win is retail (also called out
| by OAI CFO). They made deals with Etsy and other small retailers.
| I was fixing my guitar the other day and would have instantly
| bought the tools it had suggested that I would need. The problem
| is that they have to win against Amazon here, and there is zero
| chance of a partnership for obvious reasons.
| ivan_gammel wrote:
| >Other agent use cases: OpenAI doesnt have a surface to build
| these on. Google has chrome
|
| ChatGPT app is their Chrome. Large consumer base using chat on
| daily basis can expand to prosumer and to enterprise. They
| build an emotional connection to their customers that has the
| vibe of iPhone.
| liamconnell wrote:
| Yes but its not relevant to the agent use cases (which are
| mostly about interacting with external systems). So agents
| built by Microsoft (Copilot) can natively interact with
| Office files in Sharepoint, and the Sharepoint product team
| can build to enable this in special ways. OpenAI has to use
| the APIs and deal with rate limits, speed issues and other
| limitations.
| ivan_gammel wrote:
| Do Oracle, SAP or Walmart invest in their own models or
| they build integrations? There are lots of companies which
| don't have other options but to work with 3rd party LLM
| vendors. OpenAI, Anthropic and Mistral are better
| positioned for this than others.
| hobofan wrote:
| A large portion of those customers buy those models from
| their preexisting cloud vendors: AWS, Azure, GCP.
|
| The customers are also price sensitive and are for many
| use-cases largely fine with last-generation model
| performance if that means they are cheaper. With that,
| there is little moat for the model creators, forcing a
| race to the bottom for model licensing, and the biggest
| chunk of the profit being captured by the cloud
| providers.
| throwway120385 wrote:
| Oracle, SAP, and Walmart already have teams of people
| managing the data they have in-house. I find it hard to
| believe that those people can't pivot to working with an
| in-house LLM under the right leadership.
| ivan_gammel wrote:
| Data landlords have no reason to invest in their own
| models when they can license their content to all vendors
| and offer integrations with them. Their business models
| are enhanced by AI, not threatened by it. For Google and
| Meta it's different: they offer entry points to data and
| chat apps are direct competitors. So chat apps with good
| integrations can be as big as largest ERPs, for example.
| vb-8448 wrote:
| At some point, I'd expect the following pattern to emerge:
|
| - random user: hey chatgpt, I need a new mechanical keyboard,
| buy me one - openai will get money for mechanical keyboard
| vendors to be on top of gpt's agent list
|
| the ad business will shift from trying to hack google to hack
| gpt
| jimkleiber wrote:
| It's already shifting. I know someone who used to do SEO and
| is now marketing how to get in llm results.
| javier2 wrote:
| I am already using claude to help me shopping. It can be so
| hard to find the actual specifications of a product. Amazon
| is filled with nonsense information, and its nearly
| impossible to compare different variants of things like
| monitors, tvs, cpus and other technical things that clearly
| are made with certain specifications in mind.
| dboreham wrote:
| I use it for gift suggestions. So they could easily add
| affiliate links on the page.
| liamconnell wrote:
| Yes that's what I meant. But Amazon will fight for its life
| to stop this. So OpenAI will have to go to other retailers,
| which don't have the same product catalogue size as Amazon.
| Best case scenario: Target or Walmart. But there is a reason
| that OpenAI announced deals with Etsy and Shopify rather than
| those.
|
| And OpenAI doesn't have as much product insight as the
| retailers so they have to rely on the retailer to choose
| which is the "best" mechanical keyboard for this person. And
| at that point, pretty much all of the shopping value is being
| provided by the retailer rather than ChatGPT, so why would
| they get much money?
|
| There's a market for this but its not going to be trivial for
| OpenAI to win it. And it probably wont be a cashflow monster
| like AdWords or Amazon.
| rco8786 wrote:
| > Amazon will fight for its life to stop this.
|
| Why? Amazon advertises heavily on Google search, why
| wouldn't they do the same with OAI?
| Analemma_ wrote:
| Because they make a shitload of money by arranging Amazon
| search results in a certain way, selling favorable
| placement on those results, and inserting upsells ("Try
| Amazon Prime!") into the checkout process, all of which
| are at risk if Chat-GPT becomes a frontend to buying on
| Amazon. (Note that they are already vigorously going
| after Perplexity for trying to be an Amazon frontend)
|
| In general, Big Tech will never allow itself to be just
| the backend to a service where another company controls
| the frontend and the relationship to the customer. That's
| how you get commoditized and ultimately replaced.
|
| Examples: you cannot get a streaming box with universal
| search ("which streaming service has show X? Just hit
| play and go"): the streaming services staunchly refuse to
| provide the APIs to do so. Nor is there interoperability
| across messaging apps to let users supply their own
| frontend clients. AI and MCP will go much the same way,
| it will be locked down as soon as it presents a business
| model threat.
| glpgeFwac wrote:
| Agree on your overall point, minor note that Apple TV
| does decent at being a streaming box with universal
| search. The benefit of buying into a walled garden is
| that sometimes platform owner and user interests align.
| liamconnell wrote:
| Good point!
|
| On the other hand, Historically Amazon didnt compete with
| Google (until GCP). They do compete with Microsoft, which
| is pretty closely aligned with OAI. They also have large
| investments in Anthropic.
|
| Even if OpenAI did win here, would it be a profit monster
| like Google Adwords? Adwords had the auction model which
| meant that certain categories were hugely lucrative for
| Google. Can a chatbot do the same? If I know that the
| product I buy is simply auctioned off to the highest
| bidder, what's the point of using an agent to help me
| shop? There has to be a pretext of the agent actually
| looking out for my best interest, otherwise I would just
| use search. Nobody expects adwords to look out for their
| best interest. They are always free to skip the ads
| section if they choose.
|
| It will be hard for ChatGPT to implement an auction model
| since it will be different for each product category.
| Hiring a lawyer will probably have a different
| interaction from buying groceries. On Google+AdWords, its
| all just search results and ads.
|
| If there is no auction, then all of this is WAY less
| profitable than the Google model. So once again - not
| going to save OAI from negative margins.
| aeturnum wrote:
| Because amazon doesn't have a web search service but they
| do have a product recommendation service? Even if they do
| pay OpenAI they would certainly be competing with their
| own service and keeping prices down via that. OpenAI
| needs Amazon (or some other fulfillment company) to
| deliver products. Amazon does not need OpenAI - they can
| build their own recommendation engine or work with
| another.
| luckylion wrote:
| > But Amazon will fight for its life to stop this
|
| have you seen Amazon's "Rufus"? It's hilariously useless.
| rco8786 wrote:
| This is it.
|
| Their real moonshot should be search and ads. They're already
| taking big chunks from Google, they're just not monetizing at
| all (yet).
|
| I already use chatgpt constantly for product research.
| svara wrote:
| Yes but this is incredibly competitive and
| undifferentiated.
|
| It's a huge market but who will it be a profitable business
| for?
|
| Likely a company or multiple who own some sort of platform
| that people are already on, so not OpenAI.
|
| What they have right now is the strong ChatGPT brand and
| that does mean a lot. But how long will it last?
|
| They're not the technology leader anymore, and that spells
| a lot of trouble.
|
| They are at a stage where they need to dominate the market
| and then leverage the data that gives them, plus the brand,
| plus the tech advantage to establish a durable near
| monopoly, but it looks like it's not working.
|
| It's a bit as if in 1999 3 equally strong Google
| competitors had popped up, with some pulling ahead.
| Analemma_ wrote:
| This was Amazon's huge bet on Alexa: that if you made a
| frictionless way to buy products by saying "computer, buy me
| [thing]", then people would use it and then you could sell
| favored placement on it.
|
| It was a total failure. I know lots of people-- both
| technical and non-technical-- who have Alexa devices, and not
| one of them has ever bought anything with it. You can read
| various comments from Amazon insiders confirming that the
| rate of buying things with Alexa was close to zero. And why
| not? It's the shittiest possible way to shop, like buying a
| lottery ticket except where the RNG is knowingly gamed. This
| is why Amazon is writing off Alexa entirely.
|
| I've commented to this effect before, but "what if people
| could shop sight unseen" is a PM fantasy, not a thing anybody
| actually wants. LLMs might be useful for helping with
| research and comparison shopping, but the "one-click [or one-
| prompt] buying" workflow is not gonna happen.
| kristo wrote:
| At that point why would I use ChatGPT if it's just getting
| paid to show me stuff?
| ____tom____ wrote:
| and then, to make money, they'd have to stop giving the
| correct answer, just like search engines
| notatoad wrote:
| this was supposed to be the business model for alexa. amazon
| had all the pieces - they had the product listings,
| marketplace, ordering infrastructure, the smart speaker in
| your home always listening to you, and they built exactly
| that product.
|
| it hasn't exactly taken off, and i don't think OpenAI has
| addressed any of the problems that prevented amazon's version
| from being a success. and that was _without_ taking
| advertiser money to choose which product to sell you, amazon
| was happy to just make a sale. if the product choices the AI
| shopping assistant makes are driven by advertiser dollars
| instead of product quality, i really don 't expect consumers
| to accept it.
| danpalmer wrote:
| What do you see the problems that prevented Amazon as
| being?
|
| I don't know much about this, but I'd have thought it was
| the lack of display or ability to critique the choices
| Alexa makes. But ChatGPT doesn't have that problem because
| you can see and "discuss" the buying decisions.
| brazukadev wrote:
| That would be the optimal scenario for openai but even this
| one I'm not really expecting to happen anymore. OpenAI
| failed.
| kristianc wrote:
| Which is likely why they won't try. Trying to raise that much
| money from 20 large individual customers would be suicidal. At
| the scale they're talking about, you need billions of
| "customers".
|
| Trying to embed themsleves into every enterprise workflow and
| taking a cut from it seems much more likely than them trying to
| invent the next killer app. ChatGPT is just the marketing arm
| which keeps them front of mind.
| jstummbillig wrote:
| > - Revenue sharing from drug discovery (called out by OpenAI
| CFO): Why would a pharma company give away the upside to a
| commoditized intelligence layer? Why would OpenAI have a more
| compelling story than Google Deep Mind, which has serious
| accolades in this space?
|
| I am not sure I follow. They "give it away", because they have
| to. They have to pay any of the model companies. What do
| DeepMind's accolades matter if it's commoditized, as you
| propose?
|
| AI resources will remain scarce for the foreseeable future: I
| have to literally wait multiple Minutes to get an answer for
| semi-hard coding problems. The current demand is the delta
| between this, and the few milliseconds that it could take if
| supply was there. I suspect the tension will grow. Why would
| there not be multiple companies positioned to capture value?
| Assuming that any of them can turn demand into profit, that
| seems to be the most likely story right now.
| mattmanser wrote:
| His point is AI's already getting commodified. So OpenAI
| won't get a portion of the profits or revenue sharing, it'll
| be a simple transaction. They simply pay for compute time.
|
| It's like pretending sulphuric acid manufacturers would get
| the right to demand a portion of drug company profits.
| jabberwhookie wrote:
| Big pharma might choose to pay full cost to get reasonable
| speed. To get to a partnership that looks a lot like tenant
| farming you would need a model that is actually 100X better
| at drug discovery than any other model, Why would that be
| OpenAI instead of deepmind? Not that either is likely worth
| much premium.
|
| Generally, I think only penny stock pharma cares at all to
| deal with IP with any kind of baggage instead of having
| already forgotten it in the backlog.
| liamconnell wrote:
| The CFO isn't talking about selling tokens to pharma
| companies. There's no money in that. She proposed revenue
| sharing. In this scenario, OpenAI's AI service helps discover
| drug candidates, and shares the IP ownership of the candidate
| (which is basically a risky bet that it will get through
| clinical trials and be profitable). Biotech is a complicated
| market filled with smart people and great negotiators - they
| dont give away IP ownership without a lot of thought.
|
| If OpenAI wants anything more valuable than selling tokens,
| they will need to offer something valuable and
| differentiated. Right now they are not differentiated in the
| space at all. Look up "OpenAI Biotech" - anything that
| they've built themselves?
|
| If any company will have a new product that biotech companies
| will pay top dollar for, its Google. Deepmind has been in
| biology (proteins) for almost a decade and they it has
| subsidiaries like Isomorphic Labs that are bringing products
| to market.
| semi-extrinsic wrote:
| > OpenAI's AI service helps discover drug candidates
|
| This has never been the difficult/expensive part of drug
| development.
| 9cb14c1ec0 wrote:
| > OpenAI doesnt have a surface to build these on
|
| Correct. They certainly could. An OpenAI alternative to g suite
| and MS Office would be a good start (integrated with the
| chatgpt mobile and web presence), but would also be a huge
| engineering effort.
| holden_nelson wrote:
| > OpenAI is facing off against Google, Meta and Amazon, all of
| which have existing relationships with advertisers.
|
| I will point out that these companies have existing
| relationships with advertisers because they have massive,
| sticky userbases and advanced targeting tools. The average
| consumer is absolutely using ChatGPT for personal use, and
| maybe Copilot at work if applicable. And they're using Google's
| AI by proxy when they perform searches.
|
| If OpenAI were to roll out advertising tooling, I have no doubt
| advertisers would flock there to try it out.
|
| Additionally, the other thing I think OpenAI leads in is
| Product. Google is amazing at creating technologies and awful
| at creating products. I think OpenAI can be positioned to win
| based off of that alone.
| skeuomorphism wrote:
| 207 billion to fund sam altmans greatest con on the world. Will
| it also be treated as "too big to fail", and be bailed out in the
| future, when it inevitably fails to deliver?
| atleastoptimal wrote:
| What is inevitably going to happen
|
| 1. AI becomes better, causes more fear, public uproar, arms race
| between China/US
|
| 2. AI becomes a government project, big labs merge, major push
| into AI for manipulation, logistics, weapons development/control
|
| 3. ????
|
| 4. Utopia or destruction
| mvdtnz wrote:
| Why was the original title changed? It had the correct title on
| HN a couple of hours ago.
| wg0 wrote:
| It is very simple. Let's forget other domains and talk about
| software industry alone.
|
| If they capture it fully that would only mean that OpenAI gets a
| portion of the engineering spend (because it is supposed to save
| on engineering salaries) which is a portion of the total spend
| which is almost always less than the total revenue.
|
| Now estimate the total revenue of all software companies combined
| in the world and look at their engineering spend and a faction of
| that is what OpenAI can have in best case scenario.
|
| So... Bubble.
| whoamii wrote:
| So, tree fiddy before inflation
| burnerRhodov2 wrote:
| I feel like OpenAI could flip on the ad switch and make $20B a
| quarter like google... so this number isn't too crazy to me?
| scoofy wrote:
| Oh, I like the part where they're supposed to be a not-for-
| profit... I guess I'm honestly a bit happy they aren't profiting.
| chasing0entropy wrote:
| Human thought is more than just general intelligence (AGI), but
| the ability to conceptualize data beyond linear symbolic
| representations and to combine the schema / metadata from
| multiple contextual inputs with memory, to output unique concepts
| in both alphanumeric and other conceptualized manners.
|
| An LLM, in addition to being unable to ever obtain true AGI
| because of the linear and singular representation of concepts and
| data, cannot combine multiple schemas or metadata from multiple
| contexts with its own training and reinforcement data.
|
| That means it cannot truly remember and correct its mistakes. A
| mistake is more than the observation and correction, it is
| applying global changes to both your metadata and schema of the
| event and surrounding data.
|
| LLMs as an AI solution is a dead end.
| nr378 wrote:
| I suspect that the asymptotic price of consumer facing LLMs will
| be 0, much like Search - although just like Search, monetisation
| potential from ads will be high (perhaps even higher given the
| ability to truly integrate ads into the result itself using
| LLMs).
|
| It potentially looks like Google and OpenAI will take this new
| market.
| 1vuio0pswjnm7 wrote:
| Original HN title: (80 chars)
|
| "OpenAI needs to raise at least $207bn by 2030 so it can continue
| to lose money"
|
| Full title: (95 chars)
|
| "OpenAI needs to raise at least $207bn by 2030 so it can continue
| to lose money, HSBC estimates"
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