Go out on the the street of Anytown in any western country, and people know "ChatGPT".

A friend of mine is a teacher, and told me that at a recent school board meeting there was discussion about implementing AI into the learning curriculum. And to the board, "AI" and "ChatGPT" were used interchangeably. There was no discussion of other providers or models, because "AI" is "ChatGPT".

That's why OpenAI has these huge projections. When average people are asked to reach for AI, they reach for ChatGPT.

I imagine Meta users know Llama too?

People still call it "Kleenex" when they're using any old facial tissue. They may still call it "ChatGPT" when it's coming from Google.

No, average people are nowhere near that tech-savvy. Just because every mom in the 90s called every video game console a "Nintendo" did not mean that Sony didn't mop the floor with Nintendo in that era. This isn't brand loyalty, it's brand genericity. Other than, say, Replika-style users who have formed an emotional bond with a certain style of chatbot, no average joe on the planet gives a damn whether the LLM powering their chat is provided by OpenAI or Google or etc. They'll use whatever's in front of them and most convenient, and unlike Google, Apple, or Microsoft, OpenAI doesn't own the platform that establishes the crucial defaults that nearly no user ever changes.

Yeah man, absolutely! Ads can pay for all of it!

> It's nonsensical

Yep, wanting a business to be profitable before investing in it, or at least to show that it could be profitable by providing a plan and timeline to profitability, is too much to ask for nowadays. Of course companies can be successful and great without any clear path to profitability, hype and enthusiasm are enough, just look at the great success of WeWork and Adam Neumann!

Who are we to doubt that? Just keep repeatedly giving couple of trillions to Sama and all will be okay, AGI is just behind the corner, trust him bro.

To be profitable, they'd need to monetize those free users for an average of $17/year or $1.5/month.

Do you realize how low that is ? Yes, ads even implemented in an uninspiring fashion would more than cover that. With some thought into it ? Well, You don't need to be a genius to see the potential of directly weaving paid recommendations naturally into conversations when appropriate.

Gemini is a google default so why isn't it used anywhere near a much as chatGPT ?

Meta has stuffed their llama model into Instagram, Whatsapp, Facebook and god knows what so why isn't it used anywhere near as much as chatGPT ?

In all the time these players pushed their apps and models to their billions of users, chatGPT's userbase has been growing massively.

Clearly people do care about using chatGPT and specifically chatGPT and what would be the 'existential crisis' by the incumbent players has come and gone, with Open AI unscathed.

Regarding point (1), OpenAI created 2 amazing trends which (though I hate OpenAI, Should be called ClosedAI) took internet by wild

First when chatgpt 3 was launched

And now when image ability of chatgpt was launched with the ghibli trend.

So Honestly, I had seen so many comments on r/localllama saying that openai has become just an infrastructure company or something and then openai dropped the new image update and now they are commenting about local ai's by pasting images generated by that new chatgpt ...

I am not sure but see, google makes most of its money using advertising & data basically.

I wouldn't be surprised if we started seeing sudden shifts of AI or started getting ads in AI somehow too.., because people trust AI and its a landmine of money really...

So OpenAI's 27x evaluation without any thought of ads or some data selling isn't that bad because they still got some nice engineers. The only Disgrace is the fact that they went from a non profit to an american psycho esque corporation saying "well OUR AI will take over jobs, but it was good for the shareholders in the short term though"

  … they could only use openai api and I don't think that they would really switch now, because I think switching would be hard.

Given how many players are in this space, I am incredibly dubious that anyone will win. Market is going to be sliced between multiple big companies who are going to be increasingly squeezed on margin. Unless someone can produce some magic that is 10x more reliable, consumers are going to price compare. Today, all of the options can occasionally produce brain dead output -why pay a premium?

Especially bad for OpenAI, because they have no fallback revenue. Microsoft and Google can subside their offerings forever to eliminate competition.

The ad-monetized consumer market is funny in that they tend to be winner take all. Nobody can compete on price, because the ads go where the users are, and the users don't pay. And preferences are sticky, after making a choice, the users don't switch just for incremental improvements. So

The software development industry is likewise well in the process of being disrupted. LLMs for programming market seems to have grown from nothing to >$10B in a year. And the software development market is hundreds of billions / year, if you just consider the employment costs. We don't know exactly how this will play out, but again there's at least an order of magnitude more growth available there.

The above two are just the places where the impact is already obvious and it's clear that we don't need to assume any additional increase in capabilities. But an increase in capabilities seems really likely. Even if it turns out that we're right now on the cross-over of the sigmoid, and the asymptote won't be ASI or even AGI, a large proportion of knowledge work is also at risk. And then the addressable market is trillions if not tens of trillions.

I know this is hand-wavy, apologies for that. Doing this kind of analysis properly is both hard work and would require specialized data sources. But I think that's the general intuition for why high valuations for frontier labs are justifiable (and the same justification for bigtech capex). It's a lottery ticket with good odds for redistributing existing markets, as well as another set of lottery tickets for some set of probable markets, though we don't know exactly which.

With AGI or ASI, the addressable market is all economic activity, and at that point basically anything is justifiable.

Ai applications have not even scratched the surface, IMO. I don’t think it is unreasonable to see a world where, when AI gets strong enough to do senior level white collar work, like doctors or lawyers, AI companies build sub-companies to capture the end value of their AI products rather than the base value as a vertical integration tactic.

We are at a lull but AI value add is real and the ways that AI companies capture that value add is still very primitive.

How much of that OpenAI can capture is an interesting question. But right now APIs for open-source models are commoditized while similarly capable proprietary models can charge ~3x the price. If the flagship models run on similar margins the API offering has decent profit margins. And if we stay in a triopoly (Anthropic, Mistral, OpenAI) it's certainly possible that profits stay high. It wouldn't be the first industry where that happens

I don't see anyone on the even in the 30 on this list: https://apps.apple.com/us/charts/iphone/top-free-apps/36

We've seen this in many industries where it's a duopoly / oligopoly or even more players where margins get really squeezed

The thing that people are missing is that openai is a platform like google's, and there are a million different businesses they can expand into.

That should make it easy for them to choose one and start already, then. I wonder why they haven't started. /s

The things that actually work out you can just buy or outcompete later. But that is another phase, perhaps 1 decade from now. Right now it is about starting alll the snowballs.

Even if people look for answers from ChatGPT instead of Google, most people still won't pay $20/mo for it, let alone $200/mo. Average people don't pay for Google search and I've never seen any sign telling they would be willing to pay for it.