I don’t understand how people are surprised by this anymore.
So yeah, it’s the best option right now, when the company is burning through cash, but they’re planning on getting that money back from you eventually.
Genuine question, what are some examples of companies in that "hiking the price" camp?
I can think of tons of tech companies that sold or sell stuff at a loss for growth, but struggling to find examples where the companies then are able to turn dominant market share into higher prices.
To be clear, I'm definitely not implying they are not out there, just looking for examples.
One thing I'll add is that it's not always that this ends with higher prices in an absolute sense, but that the tech company is able to essentially cut the knees out of their competitors until they're a shell of their former selves. Then when the prices go "up", they're in a way a return to the "norm", only they have a larger and dominant market share because of their crazy pricing in the early stages.
But yeah the movie thing is not at all unrealistic here. Though at night I usually wave the torch on my phone to attract attention because they don't always see a raised hand.
At the busiest time it's a bit harder but at that time the ride-sharing services are also overloaded so it's still faster to just wait for a green light (free taxi). We don't get Uber as far as I know but we do have a similar thing called Cabify. But it's useless if you need something quick and they've put the prices up too much. I now only use them for scheduled stuff like airport dropoffs.
There's no way I want to ever wait on hold for a dispatcher again, or be mystified as to when my cab is arriving (this always seems to involve standing outside in the snow or pouring rain).
If the cab companies have apps comparable to Uber and Lyft, sure, I'll give them a shot.
- Google is showing more and more ads over time to power high revenue growth YoY
- Unity has just tried to increase its prices
Uber/Lyft did raise prices, but interestingly (at least to me) is that if the strategy was the smother the competition with low prices, it didn't seem to work.
Unity is interesting too, though I'm not sure it would make a good poster child for this playbook. It raised prices but seems to be suffering for it.
As for Unity, they're certainly dealing with a bunch of underperforming PE and IPO-enabled M&A on the one hand (really should have considered that AppLovin offer, folks), but also just a failure to extract reasonable income from their flagship product on the other; I don't think their problems come from raising prices per se (game devs pay for a lot already, an engine fee is nothing new to them) as much as how they chose to do it and the original pricing model they tried to force on their clients. What they chose to do and the way they handled it wasn't just bad, it was "HBS case study bad."
At some point, someone else will make a competitive model, if it’s Facebook then it might even be open source, and the industry will see price competition downwards.
I don't know how they could _not_ incorporate customer usage to improve their models.
There is no such thing as an open source Google because Google’s value is in its vast data centers. Search is hard to train and hard to run.
GPT4 is not that big. It’s about 220B parameters, if you believe geohot, or perhaps more if you don’t.
One hard drive.
Whereas the underlying algorithms behind all these GPTs so far are broadly same. Yes, OpenAI does probably have better data, model finetuning and other engineering techniques now, but I don't feel it's anything special that'll allow themselves to differentiate themselves from competitors in the long run.
(If the data collected from a current LLM user in improving model proves very valuable, that's different. I personally think that's not the case now but who knows).
rephrasing this for LLMs instead of search: "you can create your own model architecture/training method, but you can't crawl the web and serve language query results to billions of worldwide users in a few milliseconds."
that checks out, right? Google/search == """Open"""AI/LLMs still seems like a decent metaphor to me.
That is the moat. For developer platforms, it's all about building mindshare and adoption. The more people who know how to use OpenAI, the stronger OpenAI's position on the market. It doesn't matter if there's equivalent or slightly better models unless they start to fall significantly behind (and they're currently well in the lead).
Also OpenAI gets significant discount on compute due to favourable deals from Nvidia and Microsoft. And they could design their server better for their homogenous needs. They are already working on AI chip.
People will figure out what OpenAI is doing and duplicate it. There’s many people working at OpenAI, it’s going to leak out.
e.g. As they have a fixed model which they know they would get billions of request to, they could even work with analogue chip which is significantly cheaper and faster for inference. [1] could achieve 10-100x flops/watt for fixed models compared to nvidia for their first gen chip.
However, what will be interesting is if the price of delivering ChatGPT-style experiences drops as the industry matures/advances, and their pricing moat erodes.
Unlike Uber - where prices are dictated by factors unlikely to move significantly (Labour / Vehicles / Fuel / etc), The LLM space doesn't have these types of overheads.