Comment by pier25
2 days ago
I'm not sure if this is comparable to the yellow pages vs the internet.
Google became profitable in 2001 whereas OpenAI et al are still operating at a huge loss. Even with ads it's not clear whether LLMs can be profitable unless they increase prices significantly.
Google was not profitable until they rolled out ads, either.
The scope of use of AI assistants in people's lives are significantly higher than google search, imo. People use it in far more scenarios already than just information retrieval. That's why some are betting there's a chance it's more valuable than present-day google search.
IIRC Google had no monetization at all until ads. Even then the cost of providing search with ads is orders of magnitude lower compared to running LLMs.
They made money by licensing their search technology to other sites, as well as selling physical search appliances for businesses. They were considered by some to be struggling to find a way to monetise well.
Computational cost is indeed higher than search (though remember, search has been heavily optimised for many years!), but search and web companies were one of the lowest cost, highest-margin businesses in human existence. Many higher-cost businesses have been supported by ads.
2 replies →
OpenAI could be profitable (easily) if it stopped training new models. Whether they will make that choice or not, who knows.
That would be short-termist though. So, quite unlikely. In my usage (code) they are still better than everything else I have tried. Point being that I am looking predominantly for the one llm that gives me the best code output. If they risk losing that advantage for immediate profit, guess I will cancel like I did for claude... (I still got a gemini subscription, for some reason it has a good UI, fast for common non technical requests).
Seems to have been my pattern of behavior with all these tools.
>If they risk losing that advantage for immediate profit, guess I will cancel
We call that "when the bubble pops". Can't wait.
Google and Anthropic probably won't stop training though.