OpenAI's Lack of Moat

No. It's because large models have leveled off and commodified. They are all trending towards the same capabilities, and openai isn't really a leader. They have the most popular interface, but it really isn't very good. The future is the edge, the future is smaller, more efficient models. They are trying to define and delineate a niche that needs datacenters where they can achieve rents.

Sadly, it doesn't work that way for OpenAI. OpenAI exists because it promised to be THE AI Company not just another LLM company. Its valuation reflects that. The promises made by the company reflects that. I think OpenAI is basically the guinea pig of this whole LLM experiment. Anything that OpenAI achieves, their competitors achieve in less time, with less resources and investment. And when the day comes that OpenAI falls, the money lost will be much greater than that of the other LLM comp

OpenAI doesn't have a moat unfortunately. One URL replacement away and you can switch most models in minutes. I have personally done this many times over the last year and a half.It only takes labs to produce better and better models, and the race to bottom on token costs.

Yes? He's invested in GPT-4 which just came out. He needs to retrain a new model with higher context limit as well as build out memory systems probably with vector databases. OpenAI needs to continuously raise money and buy more hardware. I'm not sure what OpenAI is doing but they're obviously resource constrained, else they wouldn't be outpaced by competitors in text2img.He probably doesn't want to give away more of his company since it's such an obvious winner.

It is just the kind of scifi trope that wouod get investors invessting.OpenAI barely has any moat, I Seriously wonder why no one is talking about hoq much open weighted models are getting to the closes source ones, they need invesotr cash to build something that would let them stabd out, otherwise no one would bither paying for OpenAI API when you can just run your own model.

The ones at the forefront of the "I need an AI" hype are selling agents, or tools that integrate in your email workflow, or some other tool with AI in the name. OpenAI is selling the shovels, the backend API those services are using. AWS/Azure/GCP are selling factory space and are providing blue-prints for shovels. Which is compelling at scale, but if you are busy selling AI tools to people who don't know better it's faster to just use an API to whatever OpenAI offe

Who in their right mind would put money into OpenAI with DeepSeek out there dumping its better models for free with no license restrictions?Anyone with enough hardware can run the model and run a competing service for less.Many companies currently using OpenAI are considering alternative cheaper and better options.The OpenAI moat has been filled in.

The market will sort this out. If OpenAI decides to make shovels rather than digging for gold (like it should), then the customer facing apps will fight it out for very little margin on top of marketing expenses while OpenAI (or equivalent) is rolling in money.

Probably not. Do they really believe they are going to knock OpenAI out of business, when the OpenAI models are better?Instead I think they are going after the "Android model". Recognize they might not be able to dethrone the leader who invented the space. Define yourself in the marketplace as the cheaper alternative. "Less good but almost as good." In the end, they hope to be one of a small number of surviving members of an valuable oligopoly.

Models are getting smaller, faster, cheaper to make, reflecting on their own output, adding modes and running in more places. But they’re not getting much smarter because they can only be as smart as us and each other, because that’s where their training comes from. OpenAI is strongest in a world where models cost billions to train. A world filled with cheap open source models is their worst nightmare. This is what’s happening. So they have to pivot into being a product company and away from bei