Comment by ACCount37 | Hacker News Reader

Comment by ACCount37 | Hacker News Reader

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People don't have the grasp of just how insane that "800M MAU and still growing" figure is. CEOs would kill people with their own bare hands to get this kind of userbase.

OpenAI has ~4B of revenue already, and they aren't even monetizing aggressively. Facebook has an infinite money glitch, and can afford to put billions in the ground in pursuit of moonshots and Zuck's own vanity projects. Google is Google, and xAI is Elon Musk. The most vulnerable frontier lab is probably Anthropic, and Anthropic is still backed by Amazon and, counterintuitively, also Google.

At the same time: there is a glut of questionable AI startups, extreme failure rate is likely - but they aren't the bulk of the market, not by a long shot. The bulk of the "AI money" is concentrated at either the frontier labs themselves, or companies providing equipment and services to them.

The only way I see for the "bubble to pop" is for multiple frontier labs to get fucked at the same time, and I just don't see that happening as it is.

> they aren't even monetizing aggressively

That's one of the issues with the current valuation: it's unclear to me how many of the 800M MAU will stick to ChatGPT once it monetizes more aggressively, especially if its competitors don't. How many use ChatGPT instead of Claude because the free version offers more? How many will just switch once it doesn't anymore?

OpenAI is already at a 500B valuation; the numbers I could find indicate that this number grew 3x in a year. One can reasonably ask if there's some ceiling or if it can keep on growing indefinitely. Do we expect it to become more valuable than Meta or MSFT? Can they keep raising money at higher valuations? What happens if they can't anymore, given that they seem to rely on this even for their running costs, not even speaking about their investments to remain competitive? Would current investors be fine if the valuation is still 500B in a year, or would they try to exit in a panic sell? Would they panic even if the valuation keeps growing but at a more modest pace?

My intuition is that ChatGPT has the mindshare of the "normal user" userbase, which is powerful. Ask Apple. You can still squander a lead like this, but not easily.

GPT-5 was in no small part a "cost down update" for OpenAI - they replaced their default 4o with a more optimized, more lightweight option that they can serve at scale without burning a hole in their pockets. At the same time, their "top end" options for the power users willing to pay for good performance remain competitive.

The entire reason why OpenAI is burning money is "their investments to remain competitive". Inference is profitable - R&D is the money pit. OpenAI is putting money into more infra, more research and more training runs.

I don't follow the comparison to Apple. Apple phones are not like Android phones, Apple computers are not like Windows computers. There's a real difference between Apple products and others. There's definitely an appeal for devices that just work and are polished (or so I've heard). I don't think ChatGPT has done that in its space.

If you want a smartphone but know nothing about smartphones? You get an iPhone and don't think about it.

If you want an AI chatbot but know nothing about AI chatbots? ChatGPT is the go-to. Almost synonymous with AI now. Same exact broad appeal.

There's a wild difference in features and ecosystem when using an iPhone, as well as quite some friction in changing, to the point that it's way more than simple brand recognition. iPhones tend to be more expensive, yet they are bought by a wide range of consumers who value them and the Apple ecosystem, the customer support etc. If brand recognition were the main reason for consumers to choose Apple devices, they'd have all switched to Android once they realized they can just pay half.

This friction to switch is just not there for chatbots offering substantially equivalent features. That's why ChatGPT is still mostly free: most users would leave the moment they impose stricter limits. If you know nothing about smartphones but they cost a significant amount of your income, well you try to know more before you buy anything. There's no reason to do that for chatbots yet given that they're free to use, just try it out and stick to the first one you tried until they make it bad enough for you to want to switch.

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