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Comment by drawnwren | Hacker News Reader

I think the optimistic take for investors is maybe they make some interesting LLM-phone tech and get acquired?

That seems unlikely given that both Apple and Google have been employing the world's top ML scientists for years, have unlimited budgets, have better access to customers than any startup (to find out what customers want), and ... need I go on? Yes, it's nice that "Rabbit" is exploring this area and being innovative, but unless their particular take on mobile phones catches the world unexpectedly by storm, nobody will mourn their passing when the money runs out later this year.

Is OpenAI a counterexample here?

They got a huge infusion from Microsoft, so not really.

I don’t think so. Here are some differences:

1. OpenAI is building in a brand new space. Mobile phones are well established. LLMs as a product for consumers are brand new. While it’s true Rabbit are trying to merge LLMs with mobile, the elephant in the room is the mobile incumbency. The existing players just have to add LLMs to their existing dominant platforms and Rabbit is done for. OpenAI, on the other hand, was unopposed launching ChatGPT. They had a genuine technical edge and consumers were hungry for it. Is everyone hungry for Rabbit’s concept? Give me a break.

2. OpenAI raised an order of magnitude more capital. Rabbit’s $30M isn’t going to get them much farther than a prototype device. My impression is the founder here managed to convince some VCs to give him money during the boom times and leveraged the generative AI hype train more recently. But where is he getting his next round? The one that he will need to actually make phones at scale. That will cost billions ultimately, and the incumbents own the supply chain he needs to access. His effort is all but doomed.

3. OpenAI’s formula was easier for a startup to master. All they needed was money for the best AI engineers and scientists and money for GPUs, and they could create a blockbuster product. Rabbit needs the top engineers as well as extensive capital for manufacturing and distribution. There is a reason that hardware favors massive scale and a reason why hardware startups tend to focus on pinpoint innovations. The energy barrier is extreme.

These are three reasons why Rabbit is in an entirely different situation than OpenAI was circa 2022.

> That seems unlikely given that both Apple and Google have been employing the world's top ML scientists for years, have unlimited budgets, have better access to customers than any startup.

Both of those companies had it handed to them, like, literally got completely smoked by OpenAI, a company with a thousand employees +/- in San Francisco. The giants are incredibly vulnerable, just like the giants that Google and Apple disrupted such as IBM, Yahoo, AOL, etc.

It's a lot harder for startups to win over large companies in hardware, even with a superior product, since shipping hardware is tremendously capital-intensive. An example that comes to mind is Pebble, which had an excellent smartwatch that worked way better than the one from Fitbit, but nevertheless ran out of money and got sold to the latter.

I think an acquisition does seem pretty likely actually. Google still has yet to make assistant do anything interesting, despite leading the way on the research side of things. Also keep in mind that they lost a ton of AI talent to startups.

Rabbit already seem to be in year 4. Over $30M in funding. And the founder/s have prior history in the field.

> That seems unlikely given that both Apple and Google have been employing the world's top ML scientists for years, have unlimited budgets, have better access to customers than any startup (to find out what customers want), and ... need I go on? Yes, it's nice that "Rabbit" is exploring this area and being innovative, but unless their particular take on mobile phones catches the world unexpectedly by storm, nobody will mourn their passing when the money runs out later this year.

I worked with one of the (many) teams at Microsoft who worked on Cortana.

The way the team leader explained it to me is that Cortana could do a lot more, but internal corporate politics prevented it. Rather than implementing the best solutions to user's problems, they had to do things like ensure Bing search handled certain results, to make sure that team stayed happy.

Or to take it to the extreme, if someone at Google came up with a device that directly beamed 100% correct search results into your brain, Google would never release the product because of the loss of search ad revenue.

I could see Meta buying this. They want a device in the 'next generation of devices', whatever that looks like.

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