Commodities can be massive businesses with competitive moats. Oil is a commodity BP and Exxon do just fine financially speaking.
In 2024, they are projected to bring in $3.4 billion in revenue and lose $5 billion dollars.
They just had a massive fundraising round for $6.6 billion which at the current costs and growth is what, 6-8 months of spend?
If they bring in $11 billion in 2025, I expect them to lose at least $18 billion dollars. Good luck!
Greenlighting training a new foundation model is very expensive, but is also a human decision that can be postponed based on available capital.
Didn't Sam ask TSMC to spend $7 trillion on new fabs? By comparison, $18 billion/yr spend seems very small.
There are three likely outcomes:
1. AI plateaus. OpenAI slashes the R&D budget to become profitable with revenue in double digit billions and profit in single digit billions. Valuation likely similar to today's.
2. AI doesn't plateau. OpenAI makes a killing. (Hopefully metaphorically, not literally)
3. Scenario 1 or 2, but it's a company other than OpenAI that wins.
Couple that with a lack of pricing power thanks to all the other similar products in the market.
I'm running Phi3, Llama 3.2 and Mistral Nemo locally and they're decent enough for many things.
The Information estimates that OpenAI is spending $4 billion just to run ChatGPT and their APIs, along with $3 billion in training and $1.5 billion in salaries.
https://www.axios.com/2024/10/03/openai-investors-profit-mon...
They invested in exploration and now they control those oilfields. They built refineries and have the systems and experienced people to operate them. Meta can't release a LLamaOilfieldAndRefinery which I can operate by just spending a few thousand on gpu's.
I don't see how a chatbot meets any of those criteria
> I don't see how a chatbot meets any of those criteria
Calling these things "a chatbot" is likely limiting your vision: some of the stuff people build by fine-tuning LLMs, such as the ones OpenAI offer, use them to generate database queries matching their customers' database schemas.
"Chatbot" is simply a convenient UI for an LLM in the same way that a web browser is a conventional UI for email. (And in this analogy, anyone calling an LLM "autocomplete on steroids" would be making the same mistake as someone saying "Wikipedia is just TCP on steroids").
I expect LLMs to continue to be extremely generic in the same way that web browsers are (market history shows periods where one browser dominates the market despite open source) or like spreadsheets (where Microsoft Office is, or was last I looked, dominant despite free offerings being good enough for most people).
Society needs intelligence. We started using mechanical aids because it became impractical to perform census work by hand as the population increased, AI is a continuation of this process: we need it, it's a commodity, there may be a market opportunity despite free and/or open source competition, and (like Netscape, like Internet Explorer) there's no guarantee that the winner in one year will still be leading the next year or even existing a decade later.