Comment by input_sh
2 days ago
> You didn't state reasons why not being a social platform matters here.
There's nothing to pointlessly waste your time on. You open it to do a thing, you either do the thing or get frustrated or leave. Social networks are designed to waste your time even when they outlive their usefulness, therefore they can serve you more ads.
You could argue Google is the same as ChatGPT in that regard, but that's why Google has Adsense in almost any search result you click on.
As for your group chats feature argument, anyone can make a social network, that's the easy part. Getting friend groups to switch is the more difficult part.
> PS. That's why Meta and Google are all in on AI. OpenAI is an existential threat to both in my humble opinion.
They're all in on AI because that's what their investors want them to do to "not be left behind". Meta was all in Metaverse. And on a cryptocurrency before that (Diem). And on Free Basics before that. The fact that none of those succeeded didn't hurt them at all precisely because they had an infinite money glitch known as ads.
They can afford to waste amounts of money equivalent to a yearly budget of a small country, ChatGPT can't.
>There's nothing to pointlessly waste your time on.
Like Google Search, this does not really matter. Fact is, chatgpt is the 5th most visited site on the planet every month. And it happened in about 3 years. 'Nothing to waste your time on?' Completely irrelevant.
Being the most visited or the most used or the most whatever is absolutely useless information, and you should delete it from your mind.
Any idiot off the street can be the most used website on Earth. Easy - go to my website, and I give you free stuff. So why am I not a billionaire? Because that's a dumbass business model and that won't go anywhere.
The idea that if you just "flood the market" you can be successful is a crock of shit, and I think we're all starting to realize it. It's not difficult, or impressive, or laborious to provide something people want. It's difficult to do it in a way that makes money.
You might say - but what about Spotify? What about Uber? Those companies are not successful. They are just barely profitable, after investment on the order of decades. We don't actually know if a service like Spotify even works long term. It sounds fantastic - pay ten bucks or whatever and get all the music you want.
But has anyone taken a step back and asked - hmm - how do we make money off of this? Because obviously that is not the cost of music, right? And we don't own any of the capital, right? And we don't actually make a product, right, we're just a middle man?
ChatGPT is in a similar predicament. The value of ChatGPT is not the ChatGPT, it's what ChatGPT produces. It's a middle man, operating at massive losses, with absolutely no path towards profitability.
> The value of ChatGPT is not the ChatGPT, it's what ChatGPT produces. It's a middleman...
Spotify and Uber are aggregators with high marginal costs that they do not control. Spotify has to pay labels for every stream; Uber has to pay drivers for every ride. They cannot scale their way out of those costs because they don't own the underlying asset (the music or the labor).
OpenAI is not a middleman; they own the factory. They are "manufacturing" intelligence. Their primary costs are compute and energy. Unlike human labor (Uber) or IP licensing (Spotify), the cost of compute is on a strong deflationary curve. Inference costs have dropped orders of magnitudes in the last couple years while model quality has improved and costs will keep dropping. Gemini's median query costs no more than a google search. LLM inference is already cheap.
> Any idiot off the street can be the most used website on Earth. Easy - go to my website, and I give you free stuff.
If they were only burning cash to give away a free product, you’d be right. But they are reportedly at ~$4B in annualized revenue. That is not "giving away free stuff" to inflate metrics; that is the fastest-growing SaaS product in history.
You are conflating "burning cash to build infrastructure" (classic aggressive scaling, like early Amazon) with "structurally unprofitable unit economics" (MoviePass).
Open AI's unit economics are fine. Inference is cheap enough for ads to be viable enough for profitability as a business today. The costs this article is alluding to ? Open AI don't need to do any of that for tier of models and use-cases they have today. They are trying to build and be able to serve 'AGI', which they project will be orders of magnitudes more costly. If they do manage that, then none of those costs will matter. If they don't, then they can just...not do it. 'AGI' is not necessary for Open AI to be a profitable business.
2 replies →