AI Company Moats

There is no moat. It's all prompts. The only potential moat is building your own specialized models using the code your customers send your way I believe.

That's not entirely true. They have a 'infinite' product moat - no one can reproduce a big mac. Essentially every AI model is now 'the same' (queue debate on this). The only way they can build a moat is by adding features beyond the model that lock people in.

Maybe it's not the LLMs nor the weights nor the data. But there are a great many things that can make a moat around a company: culture, talent, deals, investors, brand, press attention, willingness to boil the oceans. For the moment at least, OpenAI seems to have quite many of those.

Mind share is not a moat. And market share or being first is not a moat.Moats are very specific things such as network effects, customers with sunk costs, etc. The very point of the term "moat" is to distinguish it from things like market share or mind share.The article is correct, OpenAI has no moat currently.

There is no moat in models (OpenAI).There is a moat in infra (hyperscalers, Azure, CoreWeave).There is a moat in compute platform (Nvidia, Cuda).Maybe there's a moat with good execution and product, but it isn't showing yet. We haven't seen real break out successes. (I don't think you can call ChatGPT a product. It has zero switching cost.)

What do you mean by hard to create a competitive moat around the tech? These LLMs are super expensive to train so isn’t that a moat, or am I understanding it differently?

OpenAI's "moat" is basically the same as Adobe's or Microsoft's, give or take a metaphor, for Photoshop or Office.Although see last week for previous responses: https://news.ycombinator.com/item?id=37333747

I don't think OpenAI have a moat in the traditional sense. Other players offer the exact same API so OpenAI can only win with permanent technical leadership. They may indeed be able to attain that but this is no Coca-Cola.

Google, Microsoft and Facebook have capital and compute. That is not an OpenAI moat.Facebook has Moat because of their social network. It is very hard to switch to another network. Google with search has no moat because it is easy to switch to a new search engine. OpenAI has no moat because it is easy to switch to a new AI chat once a better product becomes available. AWS has moat because it is hard to switch cloud providers. Apple has moat because people want to buy apple products. etc.A

What competitors? Their moat is not tech based. A competitor can't outbuild them to compete.