Comment by aurareturn
2 days ago
OpenAI has branding power, a clear product focused mindset, focused attention, and moves faster than Google and Meta. Nearly 1 billion users in 3 years is no joke.
We're on Hacker News. Y Combinator literally teaches their companies that they can beat incumbents using focus and speed.
My bet is on OpenAI. When they IPO, I can easily see them with $1 trillion in valuation and raise the a record amount of money in an IPO.
If Meta and Google don't see OpenAI and LLMs as an existential threat, they wouldn't invest so much. I think AI has that potential to completely disrupt Google and Meta because it fundamentally changes the way people behave. It's a paradigm shift. It isn't just playing the same game.
You’re betting on OpenAI a company that has literally never sold an online ad against the two kings of online advertising…cool.
It took tiktok just 5 years to go from ~no revenue to ~$12b annual in the US.
ChatGPT has roughly the same MAU as tiktok. I don't see why their ad business wouldn't meet or exceed what tiktok was able to do in less than 5 years.
12B and 200B is a HUGE difference...especially in a 5 year time span.
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Because TikTok is free, had no competitors and network effects given that it is a social media platform. ChatGPT already depends on subscription income, has to compete with companies that can offer the same service for free and has no network effects because you're literally talking to a commodified bot
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I agree with the gist of your statement but the same could've been said for a number of new companies against entrenched players. Heck, I'm pretty sure google was that company against the existing search.
You'll probably argue that this time it's different but no one knows what's different until it's already changed.
Trying to claw ads market share using AI from the worlds number one ads and AI company.
> OpenAI has branding power
With consumers right now? Sure, but so does WhatsApp and IG, both Meta properties. Meta and Google also WAY better brand power with advertisers. So there's that.
> I can easily see them with $1 trillion in valuation and raise the a record amount of money in an IPO.
They have agreements of roughly in $1.5T infra spend (and that doesn't include their own S&M and R&D spend) for the next 5 years. They have to have a combined amount of cashflow to cover that $1.5T (mix of income, debt financing, and stock financing) + all their other spending. The CFO admitted that they may need to bail out data centers to cover this to stay solvent in the long run.
> Y Combinator literally teaches their companies that they can beat incumbents using focus and speed.
YC is literally not God when it comes to advice, so this point is moot. Meta and Google didn't come out of YC and yet still beat incumbents.
With AI. OpenAI/ChatGPT is synonymous with AI. People say "ask ChatGPT" the same way people say "Google it".
I'm sure their $1.5t infrastructure commitments are based on hitting certain goals. Their comment about government support for data center is isn't a call for a bailout and taken out of context/exaggerated by mass media.
Yes but Google also beat the incumbents in Yahoo, AOL. People thought no way back in 2000 as well. Heck, Google wanted to sell itself to Yahoo.
If OpenAI (or any LLM chat product) starts shoving ads into people's faces, they aren't going to have a billion users anymore.
I already get mad at gemini when it shoves a barely-related youtube link into the chat with someone's huge stupid youtube face on it. Its a major reason why I rarely use it.
People didn't leave when Instagram, FB, Google showed them ads on a daily basis.
Hacker News commentator !== normal people.
As devil's advocate, the innovator's dilemma is said to be the cause of incumbent disruption. But in the case of AI, we're seeing incumbents over-correct into rapid AI adoption. It is a mess, but I wouldn't then use history to predict who the winners will be.
I don't know if they over correct. I think they rightly see the existential impact of AI on their existent business.
I think people who say they're only doing this for investors is wrong. I think management at Google and Meta truly think they're f'ed if they don't get AI right.