OpenAI predicted to generate over $1B

I guess they left out the part about it costing $4 billion dollars to achieve it:) (FYI: I made up that number for dramatic effect)

I would guess most people expect those numbers to be heavily inflated and mentally adjust expectations. If a company hits their "expected" numbers like this, as an investor, I'd consider my expectations shattered.

I am with you. It is not hard to imagine that either 1) Google (et al) swoops in with a massively superior model and cost structure or 2) Facebook (et al) commoditizes this space with an open source model like Llama 2 that brings this down to essentially barely break-even infrastructure hosting.

In any case, it does look like Microsoft is going to eat the $10B.

What do you mean by, "M$ will likely try to buy them"?

My understanding is that Microsoft owns a 49% stake of OpenAI and gets 75% of their profits until Microsoft recoups their investment.

Are you saying you feel that OpenAI will not find a path to profitability and will sell their remaining stake to Microsoft?

Why wouldn't corporations and users just stick to the original AI chat model that gave them the best results the first time? I think that people are lazy about switching because it's very difficult to personally validate whether something is better or worse quickly/robustly, and when you do get bad responses it's really annoying and makes you churn back to the original model that you used.

I do sometimes wonder whether they could be replaced with a free model running on a user's local machine, however, on the other hand we might always wish to pay for best-in-class (according to some evaluation criteria, that we eventually give up on trying to self-evaluate).

I don’t think Google is a good competitor to OpenAI as a quality AI product is harmful to their search/ad business.

OpenAI is perfectly happy killing the search/ad business because they aren’t in that market. They are happy to replace a $75B search market with a $20B AI chat market. Google not so much.

I agree, but Facebook isn't likely to build a competing product. They don't have the necessary data, and much of the data they do have can't be used to train large language models (LLMs). This is something I've heard from friends who work at Facebook AI.

I think there will always be multiple large players that will compete on price, availability, performance, “smartness”, etc. Especially since GPU resources are finite and there is explosive demand.

I don’t see how you think Google could be a better service for multinationals than Microsoft, who extensively uses OpenAI models. Microsoft is the largest producer of enterprise software.

There’s a problem that Google is too big already and that at least some people now have trust issues with them and would prefer to get their AI from a different provider than the search and email services.

Hacker News as The Information has a banned domain due to its paywall: https://news.ycombinator.com/from?site=theinformation.com

Submitting from a secondary source is a workaround to the issue.

Why not both?

Perhaps read past the headline to discover some awesome new details, like that it's talking about revenue, not profit?

The server burn will have likely scaled significantly as traffic scaled. There's not much in the way of economies of scale here, you just need to rent/buy all the hardware.

Yes, they expanded the context window, announced two days ago: https://github.blog/changelog/2023-08-28-github-copilot-augu...

I'm sure they incrementally rolled this out so it's possible you are in a cohort that got this change earlier.

We'd need to know acquisition costs and lifetime value (difficult to project with such a new product and with Google and Facebook coming up with potential competitors that might cause users to churn). The idea of looking at quarterly P&L and determining if a business is legit or not doesn't really make sense. Are they profitably buying growth (if acquisition costs are lower than LTV, you're buying future profits that don't show up on that quarterly statement) or just burning money? We'd also want to understand if there's any value to subsidizing things. Perhaps they're able to fine tune and improve based on what users are doing and that's helping them build a moat - or maybe there's no value there.

If Uber could take 14 years to turn a profit, why can't OpenAI get a similarly long leash?

Can you tell us what you're working on?

I was playing with their API for half day for code generation and the cost was few dimes. I was writing package for making matplotlib plots. https://github.com/mljar/plotai

Are you building some public service that heavily relay on OpenAI API?

You mean a whole 3 months ago? So they still might be working on it.

Does anyone else remember when decades were a long time ago rather than months? Or am I just very old...

this is actually plausible, though. GPT-4 finished training in August 2022 and was released March 2023. OpenAI took a lot of time to test/secure/fine-tune/whatever. if they're looking for a roughly yearly release cadence then they might have just about finished training.

I think they are going to. But In Apple fashion, it will probably be pretty limited ability to start with. Maybe will only allow certain strict actions to be performed on the phone.

I don’t think you’d want more anyway. It’s not like you’ll want it to output Python code. For that you can use an app that specializes and has the UI for that task.

I have a hard time believing chatGPT would x10 your phone unless the UI of Siri would also change

Fwiw, I use the ChatGPT app

I record voice memos (it generates a transcript using whisper) At the end of the memo I can: * Ask it to summarize the memo into bullet points * Answer a specific question

It's incredibly valuable and I've already used it more than Siri

If Siri would just respond to me at the same volume level, that would make her 10x more useful to me. Sometimes I whisper a reminder and she SHOUTS it back to everyone...

Yes.

Depending on how much of their usage is driven by the free public ChatGPT version, I wouldn't be surprised if they could close the loss gap if they switched to paid only. I believe enough people are hooked on it that any one of them would be willing to fork out a few bucks a month.

> Isn't the hard part doing this profitably?

Correct.

What're the issues with PayPal that you're aware of?

It costs a lot less to reverse or cancel credit card transactions.

Also all sorts of insurances and financial products are just available for credit card transactions.

Unless you are a bank or something similar, it makes complete sense to just support credit cards.

Buy MSFT? They have a good investment in OpenAI and their involvement may bring growth in their stock.

Because MS owns half the company, you could invest there but would also be investing in the rest of their product lines. If you are an accredited investor, Microventures and perhaps some others allow investment in pre-IPO shares.

You can't invest in a non-profit. j/k

same as invest in SpaceX.

you invest in a company that have investment in SpaceX for example buy Google stock.

OpenAI is less good as an investment than their revenue curve would suggest because the US government is likely to cap the size of future training runs (to reduce AI extinction risk) and there are plenty of open-source offerings suitable for the work of fine tuning and otherwise exploiting the economic potential of models of the size of GPT-4, so it is hard to see how OpenAI would be able to construct much of a moat by which to protect their prospective future profit margins.

The idea that AI research must be regulated to prevent harms, including human extinction, is ridiculed on this site and in Silicon Valley, but policy is decided by representatives for the entire US voting population, not just the technologists of Silicon Valley, and polls show widespread skepticism in the broader population about the wisdom of continuing to create ever more capable AIs. Also, the people lobbying for a cap are disciplined, smart and well-funded.

Companies that focus on applying the models we have now will probably do OK (e.g., Google's using something analogous to GPT-4 to improve their Search service except that unlike GPT-4, Google's model can cite its sources) but OpenAI is not doing that: their focus is to increase capabilities trusting that it will become clear in the future how to use those increased capabilities to produce economic value, but that plan doesn't work very well if the government imposes a limit on the increase of capabilities.

Don't say I didn't try to warn you.

ADDED. The leader of OpenAI says that it cost OpenAI roughly 100 million dollars to provide the computing resources necessary to create GPT-4. Once that "foundational model" model was created, it could be run (deployed) on much humbler hardware; some open-source competitors to GPT-4 for example can run on a beefy Macbook. Naturally there is no practical way to stop people from running a model once it has been released to the public, so regulation will target the "training runs" such as the aforementioned training run that produced GPT-4.

The point is that there are many ways to "fine tune" a basic model to increase its economic value. GPT-4 by itself for example is useless as a search engine, but Microsoft fine-tuned it to produce something (Bing Chat, a.k.a., Sydney) that has some hope of becoming a popular search engine. You probably want to restrict your AI investments to companies good at this fine-tuning process.

Nvidia.

You're too late, the gains are already priced into nvidia

Maybe choose an industry you think will become automated the quickest: whatever business can lay off all its labor first can distribute the newfound profit to investors instead

Probably not, given that model training is considered Fair Use under US copyright law.

No, but they do have a plan to lock down use, make people pay for it in ever-increasing subscriptions, and retain a perpetual license to all outputs.

Higher-than-expected revenue does not imply positive cashflow.

The economics at this scale are complicated.

revenue is not profit

Original article, but I don't know how to pass its paywall: https://www.theinformation.com/articles/openai-passes-1-bill...

I work with AI daily in the form of Github Copilot and ChatGPT. It's not a parlour trick, it's become an indispensable tool. I feel handicapped when my internet goes down and I don't get Copilot suggestions as I type.

I've been programming for over 20 years, and this is the biggest single productivity jump I've experienced in my career.

I don’t find your LLM takedown that convincing, but AI is more then text. I imagine you also find the music generation, text to speech, speech to text, language translations, image generation and video creation to also be parlor tricks?