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Comment by dtagames | Hacker News Reader

OpenAI is not in the AI business. It's in the platform business. In other words, its biggest customers will make their own AI and LLM-based apps from the services that OpenAI provides.

As the first commenter said, they are the first to market with a service that's usable enough and cheap enough that regular people can now dream up their own AI apps and implement them quickly. This is a going and growing business for them and they're far ahead of any competitor. Don't expect to see OpenAI going away anytime soon.

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While I agree with your platform point, I think you still need to address OP's question of

> What is their route in profitability when Meta is giving away similar tech for free?

A few come to mind...

Brand power

Exclusive data deals

Being able to call an API vs having to pay for & devops an always on model yourself

Quality and accessibility is my belief.

Meta's Llama3x are great models but they're not providing the same quality and/or accessibility as OpenAI does. Take a look at all the products attempting to sit themselves on top of OpenAI's APIs vs those running on Llama3x; OpenAI dwarfs Meta in that regard, today.

We avoid OpenAI's models/API because of client data sharing constraints and are instead using OSS models, including L3x, but it appears most do not see that as a barrier to adoption and are moving forward with OpenAI's offerings.

We shall see if the work that OpenAI is doing will pay for itself in the long term and whether OSS models can match the gains made with the funding the commercial offerings are receiving, however.

You really think people aren't iterating on OpenAI because it's easy and will then look for cheaper alternatives if their apps take off? I will if the economics make sense.

Meta is giving away the model for free, but running that model is not free at all, and quite expensive instead. At some point it will become the usual discussion pay a service or pay infra resources + devops.

It's giving the models. I don't have the hardware to run them. Openai offers me a straight forward way to do it.

That's kind of like saying in 1999 that Google is really in the business of providing custom search bars to companies' web sites. They were (and maybe still are) providing these custom search bars but they didn't become a separate product because search is "really just one thing". And similarly LLM output only seems unique. Everything a company can do to customize LLM output can be done by their customers as well since it's all "prompt engineering" (simplistic stuff plus some voodoo).

My anecdotal evidence to this effect:

The OpenAPI playground. I keep it open as my main chat-interface to their product for random queries and curiosity, etc. It's handy enough to load up the page, write a query, and get a result.

That is - until they instituted some sort of weird "logout policy" that makes it time out randomly every X-days or after Y-time of non-use. Okay, fine, I don't mind logging in each random time this happens.

Then they added Captcha to it, except it's the weirdest and most-failing type I've ever encountered (no idea how they managed to handroll their own and F it up this bad.)

So now I don't use it anymore as it was always inconvenient when you just really wanted to "quickly ask AI something" like you do with Google. They don't want me as a client, they want me to pay someone else who will generate queries to them via some stupid API key. So now I pay someone else, who bear in mind, is spending lots of time and effort to remove the need for OpenAPI entirely by answering my queries in-house.

You could say the same thing about virtually any large tech company that does B2C and B2B, which is basically all of them.

"regular people can now dream up their own AI apps and implement them quickly" - this isn't going to happen, at least not soon enough to offset burning $5B/yr

What I mean here is "companies that don't run LLM servers." That's an expensive business and OpenAI offers it as an easy to use service with an API.

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