Comment by adventured

Why hasn't Baidu taken over the world's search market?

What moat does Google have that's so special in search?

You need to spend hundreds of billions of dollars to scale globally in search. And you have to take the market away from Google at the same time. Good luck.

OpenAI and Anthropic are doing that right now in LLMs, hyper scaling to a billion people. Having a billion users you can actually serve is a moat.

When OpenAI is done attaching a full ad model to GPT, they'll be able to serve a billion users profitably globally with zero subscriptions. This is what keeps Google up at night: ~$500 billion in ad revenue up for grabs circa 2030.

Any service with hundreds of millions of users is a lucrative ad business. TikTok, YouTube, Instagram, Facebook, Google, Amazon.

OpenAI's moat, if they get there soon enough, is that they'll be able to lean into a high margin ad business to press down on the market and kill everybody. You won't be able to serve the infrastructure to compete at the cost structure they'll able to subsidize at via the high margin ad business. This is an extraordinarily straight-forward move, and it's comically anti-competitive, and nobody will stop them from doing it. Their mistake is that they're at least two years behind where they should be in advertising.

Anthropic is the one at the most risk from the Chinese models, they have the weaker everyday consumer side. Enterprise won't be supported by an ad model very well.