Comment by littlestymaar

Comment by littlestymaar 14 hours ago

21 replies

View on Hacker News

I'd be a little bit more nuanced:

I think there's something off with their plans right now: it's pretty clear at this point that they can't own the technological frontier, Google is just too close already and from a purely technological PoV they are much better suited to have the best tech in the medium term. (There's no moat and Google has way more data and compute available, and also tons of cash to burn without depending on external funding).

But ChatGPT is an insane brand and for most (free) customers I don't think model capabilities (aka “intelligence”) are that important. So if they stopped training frontier models right now and focus on driving their costs low by optimizing their inference compute budget while serving ads, they can make a lot of money from their user base.

But that would probably mean losing most of its paying customers over the long run (companies won't be buying mediocre token at a premium for long) and more importantly it would require abandoning the AGI bullshit narrative, which I'm not sure Altman is willing to do. (And even if he was, how to do that without collapsing from lack of liquidity due to investors feeling betrayed is an open question).

array_key_first 11 hours ago

Being an insane brand means literally nothing if people can trivially switch to competitors, which they can.

There isn't even a tenth of enough money if you group together all of advertising. Like, the entire industry. Ads is a bad, bad plan that wont work. Advertising is also extremely overvalued. And even at it's overvalued price tag, it's nowhere near enough.

Reply View 9 replies
  • whalee 10 hours ago

    People could trivially switch their search engine to Bing or Yahoo, but they don't.

    If ads are so overpriced, how big is your short position on google? Also ads are extremely inefficient in terms of conversion. Ads rendered by an intelligent, personalized system will be OOM more efficient, negating most of the "overvalue".

    I'm not saying they should serve ads. It's a terrible strategy for other reasons.

    Reply View 4 replies
    • I-M-S 10 hours ago

      Funny that you mention Yahoo, as in my mind they're the perfect example of what the poster above you noted: people quickly switched to Google once a better alternative to Yahoo appeared.

      Reply View 0 replies
    • timr 9 hours ago

      You know that Google literally spends billions to ensure that people don’t switch, right?

      That’s possible because they’re immensely profitable.

      Reply View 2 replies
      • bitpush 8 hours ago

        Isn't the billions just setting the default? The ability to switch is the same as far as I understand it.

        Reply View 1 reply
        • timr an hour ago

          The default is what matters.

          Reply View 0 replies
  • sophia01 10 hours ago

    It's Coca Cola vs Pepsi. Yes some might even say Pepsi has been shown to taste better, but people still buy loads of Coke.

    Of course the tech savvy enterprises will use the best models. But the plumber down the road doesn't care whether she asks Gemini or ChatGPT about the sizing of some fittings.

    Reply View 2 replies
    • adgjlsfhk1 8 hours ago

      right, but casual users aren't paying (and won't ever)

      Reply View 1 reply
      • littlestymaar 4 hours ago

        Users aren't paying for Google or Facebook either. Advertisers do.

        Reply View 0 replies
  • pjaoko 10 hours ago

    > Being an insane brand means literally nothing if people can trivially switch to competitors, which they can.

    Logically speaking, yes it is easy to switch between OAI and Gemini, or Coke and Pepsi. But brand loyalty is more about emotions (comfort, familiarity,..) rather logical reasoning.

    Reply View 0 replies
bloppe 13 hours ago

The best way to drive inference cost down right now is to use TPUs. Either that or invest tons of additional money and manpower into silicon design like Google did, but they already have a 10 year lead there.

Reply View 1 reply
  • littlestymaar 4 hours ago

    > The best way to drive inference cost down right now is to use TPUs

    TPUs are cool, but the best leverage remains to reduce your (active) parameters count.

    Reply View 0 replies
TheOtherHobbes 13 hours ago

Altman's main interest is Altman. ChatGPT will be acquihired, most people will be let go, the brand will become a shadow of its former self, and Altman will emerge with a major payday and no obvious dent in his self-made reputation as a leading AGIthinkfluenceretc.

I don't think ads are that easy, because the hard part of ads isn't taking money and serving up ad slop, it's providing convincing tracking and analytics.

As soon as ad slop appears a lot of customers will run - not all, but enough to make monetisation problematic.

Reply View 1 reply
  • a_victorp 5 hours ago

    This! Most people that don't work on adtech have no idea how hard it is to: 1. Build a platform that offers new advertising inventory that advertisers can buy 2. Convince advertisers to advertise on your platform 3. Show advertisers that their advertising campaigns in your platform are more successful than in the several other places they can advertise

    Reply View 0 replies
po 7 hours ago

as long as the business model is:

- users want the best/smartest LLM

- the best performance for inference is found by spending more and more tokens (deep thinking)

- pricing is based on cost per token

Then the inference providers/hyperscalers will take all of the margin available to app makers (and then give it to Nvidia apparently). It is a bad business to be in, and not viable for OpenAI at their valuation.

Reply View 1 reply
  • littlestymaar 4 hours ago

    What I'm saying ils that I'm not sure the first point is true.

    I think they all have become sufficiently good for most people to stick to what they are used to (especially in terms of tone/“personality” + the memory shared between conversations).

    Reply View 0 replies
riffraff 14 hours ago

> But ChatGPT is an insane brand

I mean, so was netscape.

Reply View 4 replies
  • cmiles8 13 hours ago

    This. Netscape was THE browser in the early phases of the Internet. Then Microsoft just packaged IE into Windows and it was game over. The brand means nothing long term. If Google broadly incorporates Gemini into all the Google-owned things everyone already has then it’s game over for OpenAI.

    The mass commoditization of the tech is rapidly driving AI to be a feature, not a product. And Google is very strongly positioned to take advantage of that. Microsoft too, and of course they have a relationship with OpenAI but that’s fraying.

    Reply View 1 reply
    • cruffle_duffle 9 hours ago

      To be completely fair the later versions of Netscape were increasingly giant bloated piles of crap while IE slowly caught up and surpassed in terms of speed and features. The first versions IE were only good for downloading Netscape.

      Netscape, to a large degree, killed itself.

      Not to say IE turned into anything good though. But it did have its hayday.

      Reply View 0 replies
  • littlestymaar 14 hours ago

    Maybe, I was too young to remember that.

    Reply View 1 reply
    • littlestymaar 34 minutes ago

      What's up with the flock of downvotes? I'd never got a comment with so many as this one… Is being younger than 45 not allowed in here?

      Reply View 0 replies