Comment by gmadsen
1 day ago
The key difference is that the models upgrade multiple times a year. It is an inherently different than a commodity market
1 day ago
The key difference is that the models upgrade multiple times a year. It is an inherently different than a commodity market
But they're all converging on capability. Do I care if it's a 72% or 74% on SWEBench? Practically, probably not. And if I'm not paying per token locally, then if it takes a tiny bit longer to get to the result, I don't care.
Smartphones and laptops are also "converging", but Apple is always a year or two ahead so it doesn't matter. "Converging" is a meaningless term when things move quickly and cost billions to develop.
Bad comparison.
1. People buy Apple because of the broader ecosystem of products and the “it just works” aspect of that ecosystem. Other companies make phones with features that are objectively better but folks don’t switch because the Apple ecosystem is sticky.
Despite trying, neither OpenAI nor Anthropic has managed to move up the stack beyond “hey guys new model release today!” announcements that everyone yawns at.
2. Switching costs are real. It’s a PITA to switch not just the phone but everything else. Switching model providers is a line of code and takes almost no effort.
Apple has a true moat which is why they can command a premium. OpenAI and Anthropic have no moat which is why they’re in trouble.
Apple would have probably lost more customers if it didn't also create a hard-to-leave lock-in ecosystem.
Lots of people use old iPhones and don't care about some "up to" benchmark bumped every year, but are stuck with iMessage contacts, their stuff in iCloud, Apple Watch or apps that are not allowed by Apple to even mention they have Android versions.
Yes, but changing models, even across providers, takes about two seconds and one line of code.
It’s literally the least stickiest thing in the history of tech. Which is a big problem for these companies.
The API switch takes one line of code. The enterprise switch takes one line of code and twelve departments.
Honestly not. Most big corporates have arrangements were all the major models and now open models are available from the same API endpoint. It is literally one line of code to edit in most cases, even more so in big companies.
I don't think most motorists would care if OpenAI's gas stations just released 106-Octane "Intersteller" gas, unless their cars specifically require it.
Even commodity markets recognize different grades of product. The oil market separately prices different grades of oil, different refined products. All that really matters is that when you go to the market to buy, you can say, "I need X amount of this grade of this product" and that is what you will get. If AI models can be sold that way, you basically have a commodity market.