OpenAI’s lead is dwindling fast
As James Carville might have said, “It’s the lack of a moat, stupid”
As I predicted here in January 2024, with everybody building the same thing, there can be no moat:
That’s been catching to OpenAI ever since. The numbers don’t lie.
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And it’s not just the dwindling market share. Microsoft was for a long time OpenAI’s biggest backer, but they have increasingly backing away.
Today they apparently just distanced themselves even further:
When your biggest investor starts openly contemplating outsourcing your main product to China, it is what they call in business a strong negative signal.
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Sometimes of course bad things come in threes.
The third bad thing is that Ed Zitron just reported that OpenAI is burning money even faster than people thought:
You can’t multiply your losses every year by 8x (or even close) for very long.
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To be sure, Washington might succeed in knee-capping Anthropic, rescuing Josh Kushner’s investment in OpenAI:
But if Washington doesn’t succeed in killing of Anthropic, and instead actually inadvertently helps them, as I joked here…
.. then I’ll stand by this set of predictions from two weeks ago…
… except to say that another dark horse bidder is Elon. Wouldn’t that be an interesting twist?
I feel like the Microsoft interest in DeepSeek is such a signal. Many valley tech companies are already building their AI on open source, if Microsoft jumps in and everyone figures out that running V4 natively is significantly cheaper, and the actual performance difference is negligible (I’m sure whilst Fable 5 was available, it could do awesome thing things, however 99.9% of my use case was covered with mostly Sonnet and a bit of Opus), why WOULDNT you do it.
Made even worse by one of the biggest data centre pushers themselves realising maybe it’s not all necessary, could finally change things.
Google has 13 products with over a billion users. Many produce cash, cash and more cash. OpenAI has an albotross around its neck. Anthropic found THE niche, the question is will it matter
Especially in about 12 months when ever model basically is sonnet 4.6 or better in quality. People will choose the cheapest.