Apparently it isn't clear to the investors valuing OpenAI at >300B. Possibly they're betting that the ecosystem & integrations around their models will generate a certain amount of lock-in or otherwise make the difference in a close-to-even field

Investors thought someone renting office space was going to revolutionize the world and valued their company 50B.

I don't think it's automatically a bad idea. Offices require a lot of support, networking, security, maintenance, certifications etc. There are efficiency gains in scaling. In addition, Wework is useful for companies which hire employees in different cities.

Lots of things are good ideas but investing is about price vs value. Good ideas can be overpriced as easily as bad ideas.

Funnily enough a lot of the open source world has landed on an API that is basically a copy of OpenAI. So if you develop against OpenAI it’s almost a slot in solution to switch to an open source solution.

and on top of that you have solutions like openrouter.ai where you can route inference easily with a combobox

This reminds me of a comedy sketch where a guy is interviewing for a job at a startup, finally gets to the last round and meets the founder, and he tells him the whole thing is an illusion for investors

the bet is if they can produce ai that can replace a level of generic office worker. a bot that you can add to slack and give tasks to do.

Well, now their job is to keep up the illusion until they have cashed out or offloaded the investment to somebody else.

the IP rights holders have yet to bare their teeth. I don't think the outcome you suggest is clear at all, in fact I think if anything entirely the opposite is the most probable outcome. I've lost count of the number of technology epochs that at the time were either silently or explicitly dependent on ignoring the warez aspects while being blinded by the possibilities, Internet video, music and film all went through this phase. GPTs are just a new medium, and by the end of it royalties will in all likelihood still end up being paid to roughly the same set of folk as before

I quite like the idea of a future where the AI job holocaust largely never happened because license costs ate up most of the innovation benefit. It's just the kind of regressive greed that keeps the world ticking along and wouldn't be surprised if we ended up with something very close to this

Good historical comparison, but I doubt it this time because there is plausible deniability that a model wasn't trained on a given piece of data.

Also, the pool of public domain data is always increasing, so the AI will eventually win in any case, even if we have to wait 100 years

As I recall it, there was a time when copyright infringement on YouTube was so prolific that the rightsholders essentially forced creation of the first watermarking system that worked at massive scale. I do wonder if any corners of research are currently studying the attribution problem with the specific lens of licensing as its motivation

Yeah that was the old Viacom vs Youtube days. Here is a great video if you have half an hour to spare: https://www.youtube.com/watch?v=qV2h_KGno9w . Pretty funny court case where it turns out viacom was violating their OWN copyright... set a massive precedent.

But one thing this reminds me of is the idea of a "trap street", something mapmakers used to do was put in false locations on their maps to prove that other mapmakers were copying them: https://en.wikipedia.org/wiki/Trap_street . I figure you could do something similarly adversarial with AI to pollute the public training data on the internet. IDK like adversarial attacks on image classifiers https://www.youtube.com/watch?v=AOZw1tgD8dA . With an LLM you could try to make them into a manchurian candidate.

An environment where royalties inflate the pricing of ChatGPT by orders of magnitude seems like an environment where hosted models would be at a big disadvantage against whatever you can manage to get running on a pile of Macs in your garage.

If your business model depends on the Roberts’ court kneecapping AI, pivot.

>I quite like the idea of a future where the AI job holocaust largely never happened because license costs ate up most of the innovation benefit.

Not quite realistic. You are talking about very huge benefits, in favor of which licenses will be abandoned. And who don't abandoned them... I mean you can look at the Amish settlements.

I'd put solid money on Warner earning a few cents every time an AI girlfriend somewhere sings happy birthday within 10 years

Exactly. I use GPT4o for nearly everything, and occasionally, I'll need o1. For 95% of what I do, it's already good enough.

The vast majority of people couldn't care less about open source

If you're paying $200/month for something I can do with open source software and $10/month of compute, why wouldn't I offer you the service for $100/month? And then someone offer it for $50?

Not everyone has to know about, understand, or use open source solutions for it to open the field.

Right now you can't run it that cheap at home.

You need to pay energy bill, do the update/upgrade and you need to build a LLM rig.

Nvidias Digits Project could be very interesting, but this box will cost 3k.

We are a lot closer to running it at home than i assumed we would but plenty of people prefer SaaS over doing stuff themselves.

If you can do a $200/mo service for $10/mo, the closed source will reduce their prices to $15/mo and beat you

This is just a weird dichotomy you're introducing. Open source will introduce price pressure as any competition will - that doesn't mean you won't have a monopoly.

If you have virtually no pricing power and have to drop your $200/mo to $15/mo that's a big deal if your $300bn valuation is implying that not happening, which is what OP's point is about

Idk what you mean by saying this doesn't preclude a monopoly - having your pricing power eroded by competition is kinda one of the key features of what a monopolistic market isn't

Not at all. Monopolies don't imply an anti-rigid price curve. In fact, monopolies almost never have that.

A monopoly means a company has enough leverage to corner and disproportionately own the market. This is entirely possible (and usually the case) even with significant pricing pressure.

I think you're both missing a bigger picture. How many of these services can now be replicated in-house by a single developer? Which part of the service actually costs money once that dev deconstructs the process?

Feels like I won't be paying for anything that isn't real-time. And that any time delay I can introduce in my process will come with massive savings. Picture hiding the loading of loot info behind a treasure chest opening animation in a game, except that time difference means you can pull all the work in-house.

Openrouter.ai seems like a step in the right direction but I'd want to do all their calculations myself as well as factor in local/existing gear in a way they don't.

That's true, but if someone sells you a one-time-purchase box/gadget/phone that will do a snapshot SOTA work and not cost you $20-$200/mo in subscriptions, a lot of people would be in.

Right now the average person has to go through a vendor with a web app, there's not a lot of room for the public to explore.

Things could change in a hurry.

They don't seem to care about Ai either. The vast majority of people care about the value they're getting, companies care abut open source because its usually free.

I don't think we expect a company to exist solely making a proprietary web server anymore and be a behemoth of 300B. OpenAi might end up at the same model as Nginx or Docker if they don't pivot or find a different model.