I think it points to OpenAI trying to pivot to leveraging their brand awareness head start and optimizing for either ads or something like the Jony Ive device- focusing on the consumer side.

For now people identify LLMs and AI with the ChatGPT brand.

This seems like it might be the stickiest thing they can grab ahold of in the long term.

Consumer AI is not going to come close to bailing them out. They need B2B use cases. Anthropic is a little better positioned because they picked the most proven B2B use case — development — and focused hard on it. But they'll have to expand to additional use cases to keep up with their spend and valuation, which is why things like cowork exist.

But I tend to agree that the ultimate winner is going to be Google. Maybe Microsoft too.

Consumers en masse aren't going to pay big $$s for AI. Maybe some specific embedded apps as part of other products.

They'll pay $60-$80/mo for it. Just watch.

Unless you're totally dumb or a super genius, LLMs can easily provide that kind of monthly value to you. This is already true for most SOTA models, and will only become more true as they get smarter and as society reconfigures for smoother AI integration.

Right now we are in the "get them hooked" phase of the business cycle. It's working really damn well, arguably better than any other technology ever. People will pay, they're not worried about that.

It would have to be $60-$80/mo. in value over and above what you could get at the same time with cheap 3rd party inference on open models. That's not impossible depending on what kind of service they provide, but it's really hard.

I use LLMs now and then but not really regularly. I'm nowhere close to paying for a significant subscription today.

The average cell phone bill in the US is $135/mo.

Plans with unlimited talk/text and 5GB+ of data have been available for <$30 for over a decade now.

The AI labs are not worried.

The value is well worth over $60-$80/mo. But conflating that with the market condition is very different.

In the world where you cheap open weight models and free tier closed sources models are flooding the market, you need very good reason to convince regular people to pay for just certain models en masse in b2c market

After 30 years with a shit operating system known as Windows, Linux still cannot get over 5% adoption. Despite being free and compatible with every computer.

"Regular People" know ChatGPT. They know Gemini (largely because google shoves it in their face). They don't know anything else (maybe Siri, because they don't know the difference, just that siri now sucks). I'm not sure if I would count <0.1% of tokens generated being "flooding the market".

Just like you don't give much thought to the breed of grass growing in your yard, they don't give much thought to the AI provider they are using. They pay, it does what they want, that's the end of it. These are general consumers, not chronically online tech nerds.

> After 30 years with a shit operating system known as Windows, Linux still cannot get over 5% adoption. Despite being free and compatible with every computer.

You need to install linux and actively debugging it. For ai, regular people can just easily switch around by opening an browser. There are many low or 0 barrir choices. Do you know windows 11 is mostly free too for b2c customers now? Nobody is paying for anything

> "Regular People" know ChatGPT. They know Gemini (largely because google shoves it in their face). They don't know anything else (maybe Siri, because they don't know the difference, just that siri now sucks). I'm not sure if I would count <0.1% of tokens generated being "flooding the market".

You just proved my point. Yes they are good, but why would people pay for it? Google earns money through ads mostly.

> Just like you don't give much thought to the breed of grass growing in your yard, they don't give much thought to the AI provider they are using. They pay, it does what they want, that's the end of it. These are general consumers, not chronically online tech nerds.

That's exactly the points, because most of the internet services are free. Nobody is paying for anything because they are ads supported

It's nothing to do with Windows but with the applications (including games) that just run on it and the fact that most companies just run it it by default.

I don't see that. I've used LLMs and I've seen very little direct value. I've seen some value though Photoshop etc. But nothing I'd pay for a direct subsciption for.

It doesn't matter. I firmly believe both OpenAI and Anthropic are toast. And I aay this as someone that uses both Codex and Claude primarily.

I really dislike Google, but it is painfully obvious they won this. Open AI and Anthropic bleed money. Google can bankroll Gemini indefinitely because they have a very lucrative ad business.

We can't even argue that bankrolling Gemini for them is a bad idea. With Gemini they can have yet another source of data to monetize users from. Technically Gemini can "cost" them money forever, and it would still pay for itself because with it they can know even more data about users to feed their ad business with. You tell LLMs things that they would never know otherwise.

Also, they mostly have the infrastructure already. While everyone spends tons of money to build datacenters, they have those already. Hell, they even make money by renting compute to AI competitor.

Barred some serious unprecedented regulatory action against them (very unlikely), I don't see how they would lose here.

Unfortunately, I might add. i consider Google an insidiously evil corporation. The world would be much better without it.

They also have tons of data on the users' habits and desires which they can use to inform the AI with each specific user's preferences without them having to state them. Because so many people use Google maps, Gmail etc. It's not just about training data but also operational context. The others lack this kind of long-term broad user insight.

I'm not using Google services much at all and I don't use Gemini but I'm sure it will serve the users well. I just don't want to be datamined by a company like Google. I don't mind my data improving my services but I don't want it to be used against me for advertising etc.

> For now people identify LLMs and AI with the ChatGPT brand.

> This seems like it might be the stickiest thing they can grab ahold of in the long term.

For now, but do you still Xerox paper?

OpenAI is not going to fund themselves with $20 subscriptions and advertising enough to be profitable.

> OpenAI is not going to fund themselves with $20 subscriptions and advertising enough to be profitable.

Then it's doomed. Which is also my opinion, I don't disagree at all with you.

Ads in GPT, might literally be the worst business decision ever made. Google can get away with Ads, its expected from them, but not OpenAI

Sergei and Brin were pretty vocal about the problems with ads and why they don't belong in search engines when they started.

The only reason it's expected now is because of a slow boil.

They ideally will not want you to realize you're looking at ads.

> OpenAI became a dead duck

Won't Microsoft own OpenAI after it flames out?

A match made in heaven.

sort of not really but effectively yes. their deal with OpenAI gave them unrestricted use of all of OpenAI Models and IP (source code, weights, patents probably any other data) except the eventual hypothetical end products of Artificial General Intelligence which would belong to OpenAI alone but Microsoft would still have everything leading to it so could probably make that jump on their own (not a great deal on OpenAI's part as it doesn't give them much of a moat). so when OpenAI runs out of money well Microsoft won't own the IP but will have unrestricted use of it some one else could buy it at bankruptcy but microsoft could still use it. As for the staff well they already showed a willingness to jump ship to Microsoft back when the OpenAI board tried firing Sam without giving a reason, and if OpenAI dies Microsoft would probably hire any of the top talent that applied. So kinda sort of but on paper no but yeah they would have everything of value they would choose have.

I think Microsoft probably picks up all of OpenAI if OpenAI gets in financial trouble.

Yes, I think that’s their plan. Remember when Altman got fired from OpenAI? Msoft was right there with open arms. Msoft is probably letting OpenAI do the dirty work of fleecing investors and then when all their money is gone doing the R/D, MSoft scoops up the IP and continues on.