The AI industry increasingly looks in scramble mode to keep the hype going as those storm clouds of financial and business reality get darker and darker on the horizon.
The thing that isn't normal is the degree of experimentation relative to company valuation. Normally once a company reaches $700 B+ valuation, they've figured out their product and monetization strategy. ChatGPT is clearly still iterating heavily on that - not normal for a company that size.
The Apple II went on sale on June 10th, 1977. Visicalc went on sale October 17th, 1979- 860 days separate the two. ChatGPT was opened to the public on November 30th, 2022, which was 1219 days ago- almost 50% more time has elapsed than between the Apple II and Visicalc.
AI is so many orders of magnitude more complex that the comparison is not really useful.
More and more companies will start operating on the correct reward/risk curve or else getting crushed by firms who do. OpenAI has forced Google, Apple, Meta out of their comfort zone because they know OpenAI will eat their lunch
I suppose Meta's recent comfort zone was simply a stupid bet on VR, so sure, maybe one part of the comment isn't confusing.
I don't understand what you think you're seeing.
However all of the major privately held AI players are struggling to paint a business and financial picture that doesn’t look “terrible” at best and “verge of market moving implosion” at worst.
For now the only thing keeping this all alive is more and more irrational cash being thrown on the pile in the faint hope that something stops the implosion from happening.
But between their token curtailment and time of day restrictions, and some of the clues in the code leak (regex for sentiment, telling the public client to be "brief") it seems like they are facing some capacity issues.
Im guessing that the accountants at all the AI incumbents drink heavily.
Correct. As compared to other AI companies. Tangible product, specific market segment and stable user base.
But whether it is worth a trillion dollars (like some of the peers are pretending to be) is yet to be seen. A lot of companies are using Anthropic products, but whether the spend is worth it, is also yet to be seen. A more realistic end state for Anthropic would be that they’d enterprise customers, with limited but steady spend due to Anthropic finally having to stop subsidizing tokens and a valuation in around $200-350B.
There's a lot more money in being Google -> consumer ads, or Amazon -> consumer ads, or Meta -> consumer ads, than there is in being Anthropic -> enterprise.
Just take a look at the enterprise. Amazon's ad business alone is already a better business than Oracle or SAP or Salesforce, with superior margins, and it's growing faster too.
And of course everybody knows the Google & Meta ad monsters.
The only question remaining is who is going to extract all those LLM ad dollars, how will that break out. Right now it's Gemini and GPT in the obvious lead, with Anthropic in third, and Meta & Grok nowhere to be found (permanent situation for those).
This seems like ... not the situation we are in. LLMs are great for coding now but their text generation capabilities aren't exactly capturing the masses or replacing their jobs yet. People are already tired of the deluge of fake content on the internet, it's not going to drive a second revolution in web ads.
The $20-200 LLM plans are all subsidized and aren't paying for themselves. Something has to give here.
And yet every attempt to extract even minimal ad revenue has been canned to date as something nobody wants with AI providers retreating in failure.
I don’t doubt that there’s “some” ad revenue to be had but there’s little evidence that ads are going to save the day here.
You can say the same about AWS and then prove the b2b case instead of ad case as well
Billions in projected revenue is nothing but hype/cope. Google and Meta got their edge because their product was offered for "free" to the masses.
I'm just a user, and in my experience Claude has been consistently crap compared to ChatGPT/Codex.
I use both side-by-side, and have paid for a ChatGPT subscription every month for around 1 year, but only 2 months for Claude; once last year, and again since last month.
Everything from the sign up, the sign in, the payment, the UI, the UX, gosh, just sucks on Claude.
And the AI itself: SO. MUCH. "OoPs you're right! I was mistaken" BACKTRACKING! It's downright DANGEROUS to listen to it! God I can post screenshots of working on the same project and the same prompts with both agents and prove how worse Claude is.
Of course this comment will be downvoted by Anthropic's paid PR machine, because there's no way actual users who have tried both products would be so in favor of Claude.
Sure, it couldn't possibly be that others have had a different experience. It couldn't even be that some people think OpenAI is nearly as gross as Palantir. It's that they're shills.
High-end analysis.
That isn’t saying much.
OpenAI has stagnated technologically, and is a financial zombie, but that's not true for every part of the industry. Once these early movers flame out, there will be more stability with Google, Microsoft, and AWS.
Welcome to dot com 2.0
the silicon valley shuffle, tried & true
I think this is a disconnect between people who think that large companies are static entities with established products vs. large companies that still operate like a startup and are trying to grow. When you're building your business from $0 in revenue, you don't know what will work! You try different things, you [launch over and over again](https://www.ycombinator.com/library/6i-how-to-launch-again-a...)...all in hopes of something that works, sticks, and starts to grow.
In every example here, I see OpenAI trying something new, hoping it will grow, and shutting it down after it doesn't. Sora is the pre-eminent example of this. They make news, but you don't talk about the things they launch that successfully grow!
OpenAI isn't shutting down Codex or ChatGPT, because those were launches that they did that actually worked! When you go look at the tweets and communication from OpenAI employees when ChatGPT launched, nobody was sure that it would work. But it did. And if they hadn't launched, we would have never known how valuable it was.
All that is to say...you don't know what will work until you launch. Most things fail, and it's correct to shut them down. But focusing on the products that haven't worked instead of the products that have gets you more clicks, but actually depresses innovation by making future launches less likely.
We get it. They say that stuff to raise money, make sales and keep the party going. But don't expect too much sympathy when the strategy falters a bit.
As you get bigger, serious numbers of people get annoyed at dealing with a company that keeps inviting us into the Roach Motel of doomed products and features. Big case in point was Google's spree, a few years back, in terms of launching big new services/features that soon afterward got shut down. Great training ground for ambitious PMs; miserable user experience.
Somewhere between the death of Google+ and the demise of Google Hangouts, even folks like me began thinking: Why should I engage with new Google stuff if it's likely to be blown up in a few years, leaving me with buried IP from whatever I tried to do?
I was disappointed Google killed Reader but I pivoted. Otherwise, Google's reputation for me is fine-ish.
When you announce a post money valuation of $852 billion, you should probably be a bit better at figuring out what works, though. You're not a scrappy startup any more, even if you like cosplaying as one.
OpenAI also burned a lot of goodwill by pretending to be a nonprofit foundation focused on the betterment of mankind and then executing one of the most spectacular rugpulls in modern history. So yeah, people will be giving them a hard time even if it turns out that the valuation is justified.
If they spin-off Codex, I’ll buy; but would never fund anything where he’s involved. My .02
I think the issue with the experimentation is that they still don't have an obvious golden goose yet. Google has been able to fuck around with experiments because search/ads are always still there to carry the team and provide an infinite money spigot, even if the experiments mostly fail. But OpenAI doesn't really have an equivalent for that.
Very much possible. What has come out of Meta organically besides Facebook? Its valuation comes predominantly from the assets they acquired + investments yet to be made that build on the acquired assets.
Google is similarly iffy with product development. OAI is better still, marginally, in terms of delivering a more polished experience.
Also I do regard them stupid, simply because they are not following wisdom that was shared decades ago by someone with an incredible batting average when it comes to innovation: start with the customer experience and work backwards to the technology.
Something missing in this discussion is people asking _why_ it is that they're doing this. The people who work there aren't stupid!
And in terms of "the people who work there aren't stupid", you can have technically talented people who are very good at their specific thing and hopeless at anything else, a friend of mine once summed it up as "the dumbest smart people I ever met". This is why you need skilled management to let them do their thing but also steer them in the right direction as they're doing it. From the descriptions of OpenAI it's kinda rudderless apart from the one-man hype machine at the top.
They very nearly gave Elon Musk a controlling interest in the company. Their justification for not doing so was entirely vibes based. "Stupid" is a broad categorization, someone can be smart in some areas and do dumb things. You shouldn't let your personal appraisal for someones talent color the actual results they produce.
One of the challenges here is that a lot of folks simply weren’t around then and haven’t seen what happens when everything implodes overnight. Those that have experienced it know what that looks like and know it will happen again.
Whereas this is a very weird bubble where it creates big pumps in some equity prices but apart from a tiny number of people who are directly involved in AI research etc. it's not created any jobs, in fact by creating uncertainty it's probably caused fewer jobs to be created.
What that means for labour market dynamics when it pops I really don't know
The question is, is it a big bang or a slow release?
The housing bubble that peaked in 2006 was raised as an issue at least as early as 2000 and became a big topic of conversation in mid-to-late 2002, which is comparable to if we had started talking about an AI bubble roughly simultaneously with the release of GPT-3 and it had become a topic of wide concern shortly after the release of GPT-3.5.
So, in short, not only “this long”, but much longer.
In fact "pure" bubbles where the focus item is of literally no value (tulips, NFTs) are quite rare. Much more common are the bubbles based on an actual real transformative innovation (canals, railways, radio, internet, LLMs).
Railways did absolutely transform how travel worked in the UK, while simultaneously almost everyone who invested in them lost their shirts
We'll see if it works!
If anything 4.5 being abandoned so they could sell India a $3 a month subscription was the first crack in The Box
If anything it should have been no1 in the "openAI graveyard" website.
Forbes "sites" are just the bastard love child of LinkedIn, Medium, and Substack, and should be treated with the respect that deserves.
He seems to be trying to take almost a "venture studio" approach by throwing shit at the wall, but the problem with these things is always that the "internal startups" are "founded" by people who don't have enough incentive or control over their product to perform as well as an actual startup, and are distracted by internal politics. And frankly, it may also be that the really good founders will just do their own startup vs working on a quasi-startup inside a large org so there's some selection bias as well.
Why is this on the list? Like... what? How about including GPT 3.5 and GPT 2 here too?
Nothing similar happened when the earlier, presumably worse versions were discontinued.
100x of a small number could be less than 1x of a really large number from a product that they are more comfortable monetizing.
For some reason, he does not look like a man whom I would trust with my money, but it appears that there are enough rich investors who disagree.
For a brief moment I regretted wasting any time of my life on anything but ML research. But I guess the bigger they come…
Usually company "experiments" are typically hush hush, not blasted on every corporate media channel as a means to boost your company holdings.
WTF is that supposed to mean? I'm sorry, maybe I'm being dense. I can't figure out what "look around corners" is supposed to mean. "Think outside the box," I guess? Why "look around corners?"
I mean, maybe I do get it. Altman has a weird face that looks like you can't predict where his eyes are based on where his head is. "Shifty," one might say. But I doubt that's what Iger meant.
It's dumb. It's dumb corporate speak. I'm so sick of this kind of stuff getting a pass. We used to bully people over using the word "synergy." Let's make america anti-corporate-weasel again.
To be very clear, I think it's completely stupid.
They have clearly been lacking focus and now finally they seem to be working towards a narrower direction, which is usually highly valued by investors.
This article doesn't explore the depth of the decisions and only regurgitate what you may find your neighbor complaining about on X but with a better stylesheet.
I mean, even Andresson-Horowitz was taking NFT's seriously as though they weren't a scam only a few years ago (https://a16z.com/the-nft-starter-pack-tools-for-anyone-to-an...).
These people are also looking (and funding) quantum computing companies as though quantum computing is right around the corner after AGI.
They need to cool their jets. AI is certainly a worthwhile and super important development, but it's still possible to go overboard with it.
“Yes” I said, slightly impressed. It then asked me to clarify the subheadings, which were correct.
“Cool, this seems neat” I mused.
It generated the PowerPoint. There was not a single word on it from the docx, the header slide was devoid of words, and the 6 following content sliders were identical, and empty of words.
I suppose it’s cool that it used the correct template.
I did the work manually in 10 minutes after waiting around and responding to an LLM for 15.
What a fucking joke. “AI” is a term that we really need to stop fucking using.
Now imagine an entire economy working like that. Like say, LLM's are good enough to run entire companies but you don't get to run a company because you are good at it. LLM's can perfectly manage employee schedules but the real job is more like marriage counseling or group therapy. Somewhere along the road we forgot which jobs make the economy go. They are probably the ones with the lowest salaries as those lack the effort of conjuring the job into existence.
Humanity needs obvious things cloths, food, housing, transportation etc but that isn't where the money is. The people cooking the books have the money and they are looking for something like a book cooking book. The market for openAI will be in lying convincingly for the benefit of the investor. Reality must be auctioned off like domain names or search engine placements. Altman is really the perfect guy for the job no one wants. ha-ha
Alternatively we could humble ourselves, ask the Chinese how reality works and attempt to steal their fu. It's just a thought.