> OpenAI’s biggest issue is that it has no moat.

This just isn't true. They have the users, the customers, Microsoft, the backing, the years ahead of most, and the good press. It's like saying Uber isn't worth anything because they don't own their cars and are just a middleman.

Maybe that now changes since they fired the face of the company, and the press and sentiment turns on them.

Uber is worth less than zero. They already are at full capacity (how many cities are there left to expand) and still not profitable.

It may not be profitable but it's utility is worth way more than zero.

I don't like Uber but no one is taking them over for a long while. They are not profitable but they continue to raise prices and you'll see it soon. They are doing exactly what everyone predicted by getting everyone using the app and then raising prices that are more expensive than the taxis they replaced.

Decoupling from OpenAI API is pretty easy. If Google came up with Gemini tomorrow and it was a much better model, people would find ways to change their pipeline pretty quickly.

Uber has multiple moats: The mutually supporting networks of drivers and riders, as well as the regulatory overhead of establishing operations throughout their many markets.

OpenAI is an API you put text into and get text out of. As soon as someone makes a better model, customers can easily swap out OpenAI. In fact they are probably already doing so, trying out different models or optimizing for cost.

The backing isn’t a moat. They can outspend rivals and maintain a lead for now, but their model is likely being extensively reverse engineered, I highly doubt they are years ahead of rivals.

Backers want to cash out eventually, there’s not going to be any point where OpenAI is going to crowd out other market participants.

>OpenAI’s biggest issue is that it has no moat.

I view that as pretty good news. The last thing I'd want to see is OpenAI dominating the LLM space "for safety reasons".

I’d say OpenAI branding is a moat. The ChatGPT name is unique sounding and also something that a lot of lay people are familiar with. Similar to how it’s difficult for people to change search engine habits after they come to associate search with Google, I think the average person was starting to associate LLM capabilities with ChatGPT. Even my non technical friends and family have heard of and many have used ChatGPT. Anthropic, Bard, Bing’s AI powered search? Not so much.

Who knows if it would have translated into a long term moat like that of Google search, but it had potential. Yesterday’s events may have weakened it.

For many people ChatGPT is the brand (or even just GPT).

People keep saying that but so far, it is commonly acknowledged that GPT-4 is differentiated from anything other competitors have launched. Clearly, there is no shortage of funding or talent available to the other companies gunning for their lead so they must be doing something that others have not (can not?) done.

It would seem they have a product edge that is difficult to replicate and not just a distribution advantage.

The safety stuff is real. OpenAI was founded by a religious cult that thinks if you make a computer too "intelligent" it will instantly take over the world instead of just sitting there.

The posturing about other kinds of safety like being nice to people is a way to try to get around the rules they set by defining safety to mean something that has any relation to real world concepts and isn't just millenarian apocalypse prophecies.