A similar sentiment existed for a long time about Uber and now they're very profitable and own their market. It was worth the burn to capture the market. Who says OpenAI can't roll over to profitable at a stable scale? Conquer the market, hike the price to $29.95 (family account, no ads; $19.95 individual account with ads; etc etc). To say nothing of how they can branch out in terms of being the interaction point that replaces the search box. The advertising value of owning the land that OpenAI is taking is well over $100 billion in annual revenue. Amazon's retail business is terrible, their ad business is fantastic. As OpenAI bolts on an ad product their margin potential will skyrocket and the cost side will be modest in comparison.
Over the coming years it won't be possible to stay a mere 6-12 months behind as the costs to build and maintain the AI super-infrastructure keeps climbing. It'll become a guaranteed implosion scenario. Winning will provide the ongoing immense resources needed to keep pushing up the hill forever. Everybody else - except a few - will fall away. The same outcome took place in search. Anybody spot Lycos, Excite, Hotbot, AltaVista around? It costs an enormous amount of money to try to keep up with Google (Bing, Baidu, Yandex) in search and scale it. This will be an even more brutal example of that, as the costs are even higher to scale.
The only way Mistral survives is if they're heavily subsidized directly by European states.
> It was worth the burn to capture the market.
You cannot compare Uber to the AI market. They are too different. Uber captured the market because having three taxi services is annoying. But people are readily jumping between models using multi-model platforms. And nobody is significantly ahead of the pack. There is nothing that sets anyone apart aside from the rate at which they are burning capital. Any advantage is closed within a year.
If OpenAI wants to make a profit, it will raise prices and be dropped at a heartbeat for the next cheapest option. Most software stacks are designed to be model-agnostic, making integration or support a non-factor.
Three cab apps are a lot less annoying than three LLM apps each having their piece of your chats history.
The winner-take-all effect is a lot stronger with chat apps.
That’s the exact opposite of the way it is right now (at least for me). I don’t like having multiple ride hailing apps but easily have ChatGPT, Claude, Gemini on my phone (and local LLM at home). There is zero effort cost to go from one to the other.
I interface with AI models using a single website where i can select between models. Code IDEs are doing the same. Companies that facilitate cross model integration are doing doing great (cursor as a famous example). This trend is spreading.
Professional tip - you can save your prompts somewhere else, you don't need "the cloud" for storing them. It's just text.
I think the jury is still out on Uber. They first became profitable in 2023 after 15 years of massive losses. They still burned way more money than they ever made.
> now they're very profitable and own their market.
No they don't. They failed in every market except a few niche ones.