Comment by postflopclarity 16 hours ago
very clever! I hadn't seen anybody make this point before in any of these threads /s
obviously the nature of OpenAIs revenue is very different than selling $1 for $0.2 because their customers are buying an actual service, not anything with resale value or obviously fungible for $
They're not selling a service, they're selling access to a service. You can access a more or less equivalent service from multiple companies.
The value of an LLM isn't an LLM. That's entirely 100% fungible. The value is exclusively what it produces.
If other people can produce the same thing, your LLM value approaches 0.
They sell a product, not a model. ChatGPT is a product, GPT5 is a technology.
If you hope that ChatGPT will be worthless because the underlying technology will commodify, then you are naive and will be disappointed.
If that logic made sense, why has it never happened before? Servers and computers have been commodified for decades! Salesforce is just a database, social media is just a relational database, Uber is just a GPS wrapper, AWS is just a server.
People pay money, setup subscriptions, and download apps to solve a problem, and once they solve that problem they rarely switch. ChatGPT is the fifth most visited website in the world! Facebook and Deepseek making opensource models means you can make your own ChatGPT, just like you can make your own Google, and nobody will use it, just like nobody uses the dozens of “better” search engines out there.
FWIW the selling $1 for $0.2 is widely applied to any business that is selling goods below cost.
For example: free shipping at Amazon does not have resale value and is not obviously fungible, but everyone understands they are eating a cost that otherwise would be borne by their customers. The suggestion is that OpenAI is doing similar, though it is harder to tease out because their books are opaque.