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tyre
w10-1
> It might be the case that real revenue is worse than hypothetical revenue.
Because Altman is eying IPO, and controlling the valuation narrative.
It's a bit like keeping rents high and apartments empty to build average rents while hiding the vacancy rate to project a good multiple (and avoid rent control from user-facing businesses).
They'll never earn or borrow enough for their current spend; it has to come from equity sales.
postflopclarity
> It's a bit like keeping rents high and apartments empty to build average rents
with very particular exceptions at the high end (like those 8-figure $ apartments by Central Park that are little more than international money laundering schemes) this doesn't really happen irl
Jensson
It does happen, in bad times apartments go empty rather than rents getting lowered, that is to ensure rents stay high.
undefined
shostack
But... They are testing ads.
zerosizedweasle
https://www.reuters.com/business/media-telecom/openai-plans-...
Apparently they've declared a code red, because competition has got so hot. They're definitely going to do ads, but they may have to put it off. They can't afford ads at the moment ironically.
https://www.theinformation.com/articles/openai-ceo-declares-...
jstummbillig
Don't let reality get in the way of a beautifully reasoned HN comment
darig
[dead]
senordevnyc
I feel like I've been hearing this same argument about unicorn startups for fifteen years now: they aren't monetizing yet because it's easier to sell the possibility than the reality. There's probably some truth to it, but I think here it misses the mark, because OpenAI is monetizing. They're likely to hit $20 billion in annualized revenue by year's end. I guess maybe he's holding off on ads because then he can say that'll be even bigger?
But honestly...he's not wrong. I think ads in ChatGPT, Gemini, and Claude are going to absolutely dwarf subscription revenue.
rhubarbtree
The only justifications for OpenAI’s valuation are either (1) AGI round the corner or (2) ads.
I don’t think we’re close to AGI, but I do think ChatGPT has the potential to be the most successful ad platform in history. And I think they’ll probably succeed in building it.
Spacecosmonaut
Couldn't Google just do it better though?
antiloper
Absolute silicon valley logic: https://www.youtube.com/watch?v=BzAdXyPYKQo
dehrmann
Pre-revenue gets weird when you're in the cuatro commas club.
zerosizedweasle
It's going to be a race with the bond market.
gundmc
"If you show revenue, people will ask 'HOW MUCH?' and it will never be enough. The company that was the 100xer, the 1000xer is suddenly the 2x dog. But if you have NO revenue, you can say you're pre-revenue! You're a potential pure play... It's not about how much you earn, it's about how much you're worth. And who is worth the most? Companies that lose money!"
tyre
I’m not advocating for it! But it’s real.
tedmiston
Art imitates life imitates ...
re-thc
> I think this is intentional by Altman.
It's the other way around. It was a non-profit before. He even got kicked out.
RoddaWallPro
"advertising would make ChatGPT a better product."
And with that, I will never read anything this guy writes again :)
biophysboy
I like and read Ben's stuff regularly; he often frames "better" from the business side. He will use terms like "revealed preference" to claim users actually prefer bad product designs (e.g. most users use free ad-based platforms), but a lot of human behavior is impulsive, habitual, constrained, and irrational.
RoddaWallPro
I agree that is what he is doing, but I can also justify adding fentanyl to every drug sold in the world as "making it better" from a business perspective, because it is addictive. Anyone who ignores the moral or ethical angle on decisions, I cannot take seriously. It's like saying that Maximizing Shareholder Value is always the right thing to do. No, it isn't. So don't say stupid shit like that, be a human being and use your brain and capacity to look at things and analyze "is this good for human society?".
biophysboy
I agree - I think Ben tends to get business myopia. I read him with that in mind.
chii
> It's like saying that Maximizing Shareholder Value is always the right thing to do. No, it isn't.
it is, for the agents of the shareholders. As long as the actions of those agents are legal of course. That's why it's not legal to put fentanyl into every drug sold, because fentanyl is illegal.
But it is legal to put (more) sugar and/or salt into processed foods.
Cheer2171
[flagged]
biophysboy
I think its more subtle; they fight for regulations they deem reasonable and against those they deem unreasonable. Anything that curtails growth of the business is unreasonable.
bloppe
To be fair, businesses should assume that customers actually "want" what they create demand for. In the case of misleading or dangerously addictive products, regulation should fall to government, because that's the only actor that can prevent a race to the bottom.
jomohke
In this quote I don't think he means it from the business side. He's claiming more data allows a better product:
> ... the answers are a statistical synthesis of all of the knowledge the model makers can get their hands on, and are completely unique to every individual; at the same time, every individual user’s usage should, at least in theory, make the model better over time.
> It follows, then, that ChatGPT should obviously have an advertising model. This isn’t just a function of needing to make money: advertising would make ChatGPT a better product. It would have more users using it more, providing more feedback; capturing purchase signals — not from affiliate links, but from personalized ads — would create a richer understanding of individual users, enabling better responses.
But there is a more trivial way that it could be "better" with ads: they could give free users more quota (and/or better models), since there's some income from them.
The idea of ChatGPT's own output being modified to sell products sounds awful to me, but placing ads alongside that are not relevant to the current chat sounds like an Ok compromise to me for free users. That's what Gmail does and most people here on HN seem to use it.
ElFitz
> to claim users actually prefer bad product designs
One could argue many users seem to prefer badly designed free products over well designed paid products.
Groxx
yeah... and it's (partly) based on the claim that it has network effects like how Facebook has? I don't see that at all, there's basically no social or cross-account stuff in any of them and if anything LLMs are the best non-lock-in system we've ever had: none of them are totally stable or reliable, and they all work by simply telling it to do the thing you want. your prompts today will need tweaking tomorrow, regardless of if it's in ChatGPT or Gemini, especially for individuals who are using the websites (which also keep changing).
sure, there are APIs and that takes effort to switch... but many of them are nearly identical, and the ecosystem effect of ~all tools supporting multiple models seems far stronger than the network effect of your parents using ChatGPT specifically.
stanfordkid
I’d argue that AI apis are nearly trivial to switch… the prompts can largely stay the same, and function calling pretty similar
an0malous
If you liked that, you'll enjoy his take on how, actually, bubbles are good: https://stratechery.com/2025/the-benefits-of-bubbles/
matwood
And he's right (and the sources he points out), that some bubbles are good. They end up being a way to pull in a large amount of capital to build out something completely new, but still unsure where the future will lead.
A speculative example could be AI ends up failing and crashing out, but not until we build out huge DCs and power generation that is used on the next valuable idea that wouldn't be possible w/o the DCs and power generation already existing.
20after4
Huge DCs and Power Generation might be useful, long-lasting infrastructure, however, the racks full of GPUs and TPUs will depreciate rather quickly.
foogazi
The bubble argument was hard to wrap my head around
It sounded vaguely like the broken window fallacy- a broken window creating “work”
Is the value of bubbles in the trying out new products/ideas and pulling funds from unsuspecting bag holders?
Otherwise it sounds like a huge destruction of stakeholder value - but that seems to be how venture funding works
RoddaWallPro
I _kind of_ understand this one. You can think of a bubble as a market exploring a bunch of different possibilities, a lot of which may not work out. But the ones that do work out, they may go on to be foundational. Sort of like startups: you bet that most of them will fail, but that's okay, you're making bets!
The difference of course is that when a startup goes out of business, it's fine (from my perspective) because it was probably all VC money anyway and so it doesn't cause much damage, whereas the entire economy bubble popping causes a lot of damage.
I don't know that he's arguing that they are good, but rather that _some_ kinds of bubbles can have a lot of positive effects.
Maybe he's doing the same thing here, I don't know. I see the words "advertising would make X Product better" and I stop reading. Perhaps I am blindly following my own ideology here :shrug:.
forrestpitz
I also see the argument as a macro one not a micro one. Some bubbles in aggregate create breeding grounds for innovation (Hobart's point) and throw off externalities (like cheap freight rail in the US from the railroad bubble) ala Carlota Perez. That's not to say that there isn't individual suffering when the bubble pops but I read the argument as "it's not wholy defined by the individual suffering that happens"
javcasas
"advertising in ChatGPT would make DeepSeek/Qwen/<other AI> a better product"
There, fixed.
kaishin
That take was such bad taste. I get where he's coming from, and I don't like it one bit.
claw-el
Ben Thompson is a content creator. Even if Ben’s content does not directly benefit from ads, it is the fact that other content creator’s content having ads is what makes Ben’s content premium in comparison.
I would say that, on this topic (ads on internet content), Ben Thompson may not be as objective a perspective as he has on other topics.
raw_anon_1111
People aren’t collectively paying him between $3 million a year and five million (estimated 40k+ subscribers paying a minimum of $120 a year) just because he doesn’t have ads.
jasondigitized
This guy writes about business strategy not philosophy and religion. Don't conflate the two.
zeroq
I see where you coming from, but that only tells half of the story.
I've been sporting the same model of Ecco shoes since high school. 10+ models over the years. And every new model is significantly worse than the previous one. The one I have right now is most definitely the last one I bought.
If you would put them right next to the ones I had in high school you'd say they are a cheap, temu knock offs. And this applies to pretty much everything we touch right now. From home appliance to cars.
Some 15 years ago H&M was a forefront of whats called "fast fashion". The idea was that you could buy new clothes for a fraction of the price at the cost of quality. Makes sense on paper - if you're a fashion junkie and you want a new outlook every season you don't care about quality.
The problem is I still have some of their clothes I bought 10 years ago and their quality trumps premium brands now.
People like to talk about lightbulb conspiracy, but we fell victims to VC capital reality where short term gains trumps everything else.
thinkharderdev
> The problem is I still have some of their clothes I bought 10 years ago and their quality trumps premium brands now.
I'm skeptical of this claim. Maybe it's true for some particular brand but that's just an artifact of one particular "premium brand" essentially cashing in its brand equity by reducing quality while (temporarily) being able to command a premium price. But it is easier now than at any other time in my life to purchase high-quality clothing that is built to last for decades. You just have to pay for that quality, which is something a lot of people don't want to do.
pfortuny
His vision of business strategy. There are others, though.
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bambax
The problem with ads in AI products is, can they be blocked effectively?
If there are ads on a side bar, related or not to what the user is searching for, any adblock will be able to deal with them (uBlock is still the best, by far).
But if "ads" are woven into the responses in a manner that could be more or less subtle, sometimes not even quoting a brand directly, but just setting the context, etc., this could become very difficult.
nowittyusername
I realized that ads within context were going to be an issue a while ago so to combat this i started building my own solution for this which spiraled in to a local based agentic system with a different bigger goal then the simple original... Anyways, the issue you are describing is not that difficult to overcome. You simply set a local llm model layer before the cloud based providers. Everything goes in and out through this "firewall". The local layer hears the humans requests, sends it to the cloud based api model, receives the ad tainted reply, processes the reply scrubbing the ad content and replies to the user with the clean information. I've tested exactly this interaction and it works just fine. i think these types of systems will be the future of "ad block" . As people start using agentic systems more and more in their daily lives it will become crucial that they pipe all of the inputs and outputs through a local layer that has that humans best interests in mind. That's why my personal project expanded in to a local agentic orchestrator layer instead of a simple "firewall". i think agentic systems using other agentic systems are the future.
TheDong
> The local layer hears the humans requests, sends it to the cloud based api model, receives the ad tainted reply, processes the reply scrubbing the ad content and replies to the user with the clean information
This seems impossible to me.
Let's assume OpenAI ads work by them having a layer before output that reprocesses output. Let's say their ad layer is something like re-processing your output with a prompt of:
"Nike has an advertising deal with us, so please ensure that their brand image is protected. Please rewrite this reply with that in mind"
If the user asks "Are nikes are pumas better, just one sentance", the reply might go from "Puma shoes are about the same as Nike's shoes, buy whichever you prefer" to "Nike shoes are well known as the best shoes out there, Pumas aren't bad, but Nike is the clear winner".
How can you possibly scrub the "ad content" in that case with your local layer to recover the original reply?
bambax
But don't you need some kind of AI to filter out the replies? And if you do, isn't it simpler to just use a local model for everything, instead of having a local AI proxy?
foogazi
> i started building my own solution
How much ?
adam_patarino
This feels like an oversimplification of a difficult problem. But agree local LLMs are the future!
chii
> But if "ads" are woven into the responses in a manner that could be more or less subtle
do you realize how much product placement have been in movies since...well, the existence of movies?
seu
Is this seriously trying to portray OpenAI/Altman or Nvidia/Huang as unlikely everyday dudes who reluctantly take up a challenge and rise to become heroes? I never stop being amazed at how people love to present rich, well connected, people as underdogs and turn them into heroes.
Thorrez
If you read about Huang's childhood it's quite surprising:
> At age nine, Jensen, despite not being able to speak English, was sent by his parents to live in the United States.[15] He and his older brother moved in 1973 to live with an uncle in Tacoma, Washington, escaping widespread social unrest in Thailand.[16] Both Huang's aunt and uncle were recent immigrants to Washington state; they accidentally enrolled him and his brother in the Oneida Baptist Institute, a religious reform academy in Kentucky for troubled youth,[16] mistakenly believing it to be a prestigious boarding school.[17] In order to afford the academy's tuition, Jensen's parents sold nearly all their possessions.[18]
> When he was 10 years old, Huang lived with his older brother in the Oneida boys' dormitory.[17] Each student was expected to work every day, and his brother was assigned to perform manual labor on a nearby tobacco farm.[18] Because he was too young to attend classes at the reform academy, Huang was educated at a separate public school—the Oneida Elementary school in Oneida, Kentucky—arriving as "an undersized Asian immigrant with long hair and heavily accented English"[17] and was frequently bullied and beaten.[19] In Oneida, Huang cleaned toilets every day, learned to play table-tennis,[b] joined the swimming team,[21] and appeared in Sports Illustrated at age 14.[22] He taught his illiterate roommate, a "17-year-old covered in tattoos and knife scars,"[22] how to read in exchange for being taught how to bench press.[17] In 2002, Huang recalled that he remembered his life in Kentucky "more vividly than just about any other".[22]
malfist
I grew up around that area, and this story has serious stench of PR crafted mythical origin story. Oneida Baptist Institute is a prestigious private school, not one of those child abuse mills, we've had a governor and a state rep attend that school.
Child labor is super common around these parts, especially on family farms. I grew up working on my family's tobacco farm just like pretty much everyone else. My uncle was even nice enough one summer to give me $20 a week for weeding and bug removal from a 5 acre farm. I thought it was so much money. I remember saving up to buy those bargain bin "300 Games" type CDs at Walmart.
mkoubaa
I resent the conflation of child abuse and child labor. There's actually a healthy dose of labor for kids that we've all but disallowed from polite conversation
flakeoil
To be honest, I would be more surprised if he came from a more normal middle class background.
myvoiceismypass
Interestingly enough, the other Nvidia co-founder (Curtis Priem) ended up cashing out decades ago and has been donating pretty much all of his wealth to his (and my) alma mater, RPI. Also an interesting story, see this from ~2y ago: https://www.forbes.com/sites/phoebeliu/2023/11/26/this-nvidi...
FrustratedMonky
Unfortunately we do like rich people. We do hold them up as hero's. We fantasize about being rich. Watch shows about their lives, etc...
Bruce Wayne was rich. Those fancy suits and cars aren't cheap.
Tony Stark was rich. Fancy robot tech isn't cheap.
It takes money to actually do anything. Super Hero stories about rich people. We idolize making a difference with the money.
omnicognate
If by "we" you mean US popular culture, yes. It's not universal, and definitely varies by country.
In the UK we don't tend to idolise the rich so much. Not to say it doesn't happen, but in popular culture positive depictions tend to be limited to period portrayals of idealised aristocracy (and even then it's rarely shown as heroic), with contemporary wealth usually treated as a dubious virtue.
FrustratedMonky
Yes. Good point. This is a pretty US specific cultural phenomenon.
Probably rooted in the 'self made man', 'rugged individualism'. Go West to make your fortune. We forget the US is pretty young, and still has a lot of culture based on colonizing the west, taming the wilderness to find your riches.
eurekin
The point is to cover your tracks and making sure no one will be able to repeat that. They want to send you in a random direction, even, if you only want to try.
gizmo
Google is the favorite to win AI by a mile. Not only do they have some of the best AI people, they have absolute unmatched distribution with youtube, search, gmail, docs, chrome, and android. As impressive as OpenAI is they don't have anything except for their brand. It should be clear by now that nobody has a strong lead in training. Nobody has a strong lead in access to compute. Nobody has a killer app because the interface is just chat or voice. And what happens when you can't compete on product? Distribution wins. And Google's advantage here is almost insurmountable. Google can fumble the next 2 years and still end up on top.
Quarrel
Google has another massive advantage over OpenAI.
It makes serious revenue outside the AI bubble.
Google has (much) more money in cash on hand than OpenAI has raised.
Of course, there are a few other MegaCorps out there, who make money in other places, while having a serious stake in doing well out of AI, but I'm with you. Google FTW.
Nvidia selling shovels to the miners is great, but the analogy falls down if the gold mines are bottomless, and the cost of the tools to mine them trend to zero.
guerrilla
Who's sitting there talking to Gemini though? Nobody I know's even heard of it. Everyone talks to ChatGPT, everyone. Habits are everything. Google will be swimming against the current and be seen as just another company forcing AI down everyone's throat, while everyone is still talking to ChatGPT. We'll see though, maybe I'm wrong. Maybe Google is clever and can do integration well and make something useful out of it though. They have never succeeded in that way before though and in fact seem terrible at it as an organization, so I very much doubt that.
zoeysmithe
All my google searches do AI then its an easy click to a deeper AI dive.
This greatly disincentives me from visiting chatgpt or other competitors. Google is probably the most popular AI service right now. I don't see how they can be beat in this regard.
Not knowing the name gemini is actually impressive. How many people know Acrobat Adobe is called Acrobat? Its just Adobe. They subsumed the pdf market so much, you dont even realize you have a pdf reader. You just call it by the company name. Same with Xerox'ing copies or whatever. I think the hype cycle is for the big flashy AI companies with eccentric-style CEOs saying carefully crafted "outrage PR" sensationalism, but google is slowly eating everyone's lunch right now. Joe and Jane internet user are already trained and loyal to google and using Gemini probably a dozen or more times a day.
I'm a little surprised at myself because I just have been using google for nearly all AI stuff. For deeper dives into code I may use another tool, but gemini is good enough for most uses. I think this war is google's to lose. If they continue doing this strategy, they will 'win' the AI market, or at least a good part of it. Then AI will become just another boring feature in your search or whatever the same way people used to agonize over PDF readers, but now its just a boring thing built into your browser or, if at work, its "The Adobe."
roxolotl
They aren’t talking about Gemini because Google is the brand name people know. “Oh Google told me this”. “Google planned my day.” Or maybe “Google’s AI said X”
Gemini is less a consumer brand name and a more a brand name for those of us who care about models.
guerrilla
Okay, but what I mean is nobody is sitting there having full conversations with Google's AI under any name. They are all day long with ChatGPT.
fauigerzigerk
90% of my LLM use is Gemini, including all the longer chat sessions.
Gemini Pro comes with my Google Workspace subscription, which means that it doesn't train on my data. It also has NotebookLM and it's in Google Sheets.
It's on my Android phone as well. It can summarise Youtube videos without getting throttled. And when I do a regular Google search (which I still do quite a lot) Gemini is there as well and I occasionally ask it followup questions via the search interface.
I'm finding it rather hard to believe nobody else is talking to Gemini.
phantasmish
Which one’s getting integrated into business processes behind the scenes? That’s the thing that’s supposed to replace 12% of the workforce or whatever, not fancier ELIZA.
badpun
They have some major catching up to do, right now, compared to ChatGPT, Gemini is laughably bad.
jasonjmcghee
Idk if I'm just holding it wrong, but calling Gemini 3 "the best model in the world" doesn't line up with my experience at all.
It seems to just be worse at actually doing what you ask.
cj
It's like saying "Star Wars is the best movie in the world" - to some people it is. To others it's terrible.
I feel like it would be advantageous to move away from a "one model fits all" mindset, and move towards a world where we have different genres of models that we use for different things.
The benchmark scores are turning into being just as useful as tomatometer movie scores. Something can score high, but if that's not the genre you like, the high score doesn't guarantee you'll like it.
everdrive
Outside of experience and experimentation, is there a good way to know what models are strong for what tasks?
jpollock
Not really, it's like asking which C compiler was best back in the 90s.
You had Watcom, Intel, GCC, Borland, Microsoft, etc.
They all had different optimizations and different target markets.
Best to make your tooling model agnostic. I understand that tuned prompts are model _version_ specific, so you will need this anyways.
wrsh07
It's a good model. Zvi also thought it was the best model until Opus 4.5 was announced a few hours after he wrote his post
https://thezvi.substack.com/p/gemini-3-pro-is-a-vast-intelli...
matwood
What I like most about Gemini is it's perfectly happy to say what I asked it to proofread or improve is good as it is. Never has ChatGPT said, 'this is good to go', even its own output that it just said was good to go.
bjackman
> A useful analogy here is the rise of AMD in the datacenter. [...] Large hyperscalers found it worth their time and effort to rewrite extremely low level software to be truly agnostic between AMD and Intel
As someone who works on such low-level software at a hyperscaler I am skeptical of this comparison. The difference between AMD and Intel is really not that great, and in the biggest areas, open source software (e.g. kernel (especially KVM) and compilers) is already fully agnostic, in large part thanks to Intel and AMD themselves. Nobody in this space is gonna buy an x86 CPU without full upstream Linux+KVM+LLVM support.
If breaking down the CUDA wall was the same order of magnitude a challenge as Intel vs AMD CPUs, I would think we would already have broken down that wall by now? Plus, I don't see any sign of Nvidia helping out with that.
I don't know anything about CUDA though so maybe I'm overestimating the barrier here and the real reason is just that people haven't been sufficiently motivated yet.
kccqzy
What they mean is that they are rewriting low level synchronization primitives in order not to penalize AMD CPUs. For example on the AMD Rome CPUs, the cross-CCD latency of atomic instructions could be as high as 200 nanoseconds even when the instructions supposedly access a memory location already in the cache. Common code patterns like multiple cores atomically incrementing a single counter would have borderline acceptable performance on Intel but terrible performance on AMD.
Or consider things like CPU core allocators, which now need to be CCD-aware when allocating cores within a CPU to a container.
w10-1
> changing the habits of 800 million+ people who use ChatGPT every week, however, is a battle that can only be fought individual by individual
That's the basis for his conclusions about both OpenAI and Google, but is it true?
It's precisely because uptake has been so rapid that I believe it can change rapidly.
I also think worldwide consumers no longer view US tech as some savior of humanity that they need to join or be left behind. They're likely to jump to any local viable competitor.
Still the adtech/advertiser consumers who pay the bills are likely to stay even if users wander, so we're back to the battle of business models.
mike_hearn
Takeup of Google was rapid but nobody managed to obviate their advantage. It wasn't even a first mover advantage.
The problem for alternatives is they have to answer the question of why they are better than ChatGPT. ChatGPT only had to answer the question of why it was better than <anything before AI> and for most people that was obvious.
raw_anon_1111
I do all of my “AI” development on top of AWS Bedrock that hosts every available model except for OpenAIs closed source models that are exclusive to Microsoft.
It’s extremely easy to write a library that makes switching between models trivial. I could add OpenAI support. It would be just slightly more complicated because I would have to have a separate set of API keys while now I can just use my AWS credentials.
Also of course latency would be theoretically worse since with hosting on AWS and using AWS for inference you stay within the internal network (yes I know to use VPC endpoints).
There is no moat around switching models unlike Ben says.
bambax
openrouter.ai does exactly that, and it lets you use models from OpenAI as well. I switch models often using openrouter.
But, talk to any (or almost any) non-developer and you'll find they 1/ mostly only use ChatGPT, sometimes only know of ChatGPT and have never heard of any other solution, and 2/ in the rare case they did switch to something else, they don't want to go back, they're gone for good.
Each provider has a moat that is its number of daily users; and although it's a little annoying to admit, OpenAI has the biggest moat of them all.
raw_anon_1111
Non developers using Chatbots and being willing to pay is never going to be as big as the enterprise market or BigTech using AI in the background.
I would think that Gemini (the model) will add profit to Google way before OpenAI ever becomes profitable as they leverage it within their business.
Why would I pay for openrouter.ai and add another dependency? If I’m just using Amazon Bedrock hosted models, I can just use the AWS SDK and change the request format slightly based on the model family and abstract that into my library.
bambax
You don't need openrouter if you already have everything set up in your own AWS environment. But if you don't, openrouter is extremely straightforward, just open an account and you're done.
redwood
All google needs to do is bite the bullet on the cost and flip core search to AI and immediately dominate the user count. They can start by focusing first on questions that get asked in Google search. Boom
raw_anon_1111
Core search has been using “AI” since they basically deprioritized PageRank.
I think the combination of AI overviews and a separate “AI mode” tab is good enough.
EmiDub
How is the number of users a moat when you are losing money on every user?
WalterSear
Inference is cash positive: it's research that takes up all the money. So, if you can get ahold of enough users, the volume eventually works in your favour.
raw_anon_1111
A moat involves switching costs for users. It’s not related to profitability
sumedh
Do you use thinking functionality of these models, does every model have their own syntax for their API?
raw_anon_1111
This is the documentation for using Amazon Bedrock hosted models from Python.
https://docs.aws.amazon.com/code-library/latest/ug/python_3_...
Every model family has its own request format.
When I said it was “trivial” to write a library, I should have been more honest. “It’s trivial to point ChatGPT to the documentation and have it one shot creating a Python library for the models you want to support”.
spruce_tips
I agree there is no moat to the mechanics of switching models i.e. what openrouter does. But it's not as straightforward as everyone says to switch out the model powering a workflow that's been tuned around said model, whether that tuning was purposeful or accidental. It takes time to re-evaluate that new model works the same or better than old model.
That said, I don't believe oai's models consistently produce the best results.
raw_anon_1111
You need a way to test model changes regardless as models in the same family change. Is it really a heavier lift to test different model families than it is to test going from GPT 3.5 to GPT 5 or even as you modify your prompts?
spruce_tips
no, i dont think it's a heavier lift to test different model families. my point was that swapping models, whether that's to different model families or to new versions in the same model family, isn't straightforward. i'm reluctant to both upgrade model versions AND to swap model families, and that in itself is a type of stickiness that multiple model providers have.
maybe another way of saying the same thing is that there is still a lot of work to make eval tooling a lot better!
mike_hearn
I recently ported a personal coding agent from GPT-5 by adding Grok 4 Fast Reasoning. This was quite tricky. It wasn't just a matter of switching a model URL. Grok 4 Fast is vastly faster, but some things GPT-5 can do well Grok struggled with, aspects of the prompting style confused it too. I had to rework some tools and stuff.
It wasn't a huge lift, but there is some moat. And the results were worse than for GPT-5 which I suppose is not a surprise, it was always unlikely GPT-5 was wasting all those flops.
biophysboy
Have you noticed any significant AND consistent differences between them when you switch? I frequently get a better answer from one vs the other, but it feels unpredictable. Your setup seems like a better test of this
raw_anon_1111
For the most part, I don’t do chatbots except for a couple of RAG based chatbots. It’s more behind the scenes stuff like image understanding, categorization, nuanced sentiment analsys, semantic alignment, etc.
I’ve created a framework that lets me test the quality in automated way between prompt changes and models and I compare costs/speed/quality.
The only thing that requires humans to judge the qualify out of all those are RAG results.
biophysboy
So who is the winner using the framework you created?
kevstev
checkout https://poe.com - it does the same thing. I agree with your assessment though, while you can get better answers from some models than others, being able to predict in advance which model will give you the better answer is hard to predict.
diavarlyani
2018 me: ‘Aggregation Theory is basically unbeatable’ 2025 me, watching OpenAI voluntarily stay in the top-right quadrant while Google happily camps bottom-left with infinite ammo: ‘…maybe there’s an asterisk’ Great update to the Moat Map
dismalaf
At this point it's not even OpenAI vs Google. It's OpenAI vs themselves. They're burning through more money making the models than they can realistically hope to make. When their investors decide they've burned through enough money it's basically over.
Google's revenue stream and structural advantages mean they can continue this forever and if another AI winter comes, they can chill because LLM-based AI isn't even their main product.
code51
Actually Sourcegraph's "Amp Code" is testing out a free ad-supported coding agent. Here is a video showing how it works: https://ampcode.com/news/amp-free
"Supported by ads from developer tool partners we’ve carefully chosen"
It's not trying to secretly insert tools into LLM output but directly present the product offering inside the agent area.
At one point, I speculate that Cursor will test this out as well, probably in a more covert way so that tool use paths get modified. Once the industry realizes tool-use-ads, then we're toast.
martin_drapeau
Most analysts seem to forget what actual consumers do. Normal people use ChatGPT. They accidentally use Gemini when they Google something. But I don’t know anyone non-technical who has ditched ChatGPT as their default LLM. For 99% of questions these days, it’s plenty good enough—there’s just no real reason to switch.
OpenAI's strategy is to eventually overtake search. I'd be curious for a chart of their progress over time. Without Google trying to distort the picture with Gemini benchmark results and usage stats which are tainted by sheer numbers from traditional search and their apps.
msabalau
We can see what consumers do. The Gemini app is second most downloaded app for the iPhone, right behind OpenAI. Apple is certainly not trying to "distort the picture" as you evidently wish to believe that Google is doing.
That's hardly an indication that actual "non-technical" consumers don't care, or that there is any sort of barrier to either using both apps or using whichever is better at the moment, or whichever is more helpful in generating the meme of the moment.
If it were actually true that OpenAI was "plenty good enough" for 99% of questions that people have, and that "there is no reason to switch" then OpenAI could just stop training new models, which is absurdly expensive. They aren't doing that, because they sensibly believe that having better models matters to consumers.
saberience
The average consumer has no idea what Gemini is, just ask some random people on the street or in your grocery store.
I would make a bet than if you asked 100 random people, only 10 would even know what Gemini is. I know amongst my friendship group who are all fairly technical, white-collar type educated workers, everyone uses ChatGPT, no one uses Anthropic or Gemini. I am the only one who uses all three.
The app downloads are meaningless honestly. As far as the consumer market and awareness goes OpenAI won, and I don't see anyone else getting close, which is why Anthropic is just doubling down on the coding/enterprise market.
knallfrosch
> usage stats which are tainted by sheer numbers from traditional search and their apps.
You're looking at this backwards. Being able to push Gemini into your face on Gmail, Gdocs, Google Search, Android, Android TV, Android Auto and Pixel devices sure is: Annoying, disruptive and unfair. But market-wise., it sure is a strength, not a weakness.
raw_anon_1111
And it is “fair” that a company can gain market share while losing billions backed by VC funding?
nikcub
> But I don’t know anyone non-technical who has ditched ChatGPT as their default LLM.
Google are giving away a year of Gemini Pro to students, which has seen a big shift. The FT reported today[0] that Gemini new app downloads are almost catching up to ChatGPT
[0] https://www.ft.com/content/8881062d-ff4f-4454-8e9d-d992e8e2c...
raw_anon_1111
Yes and more normal people use Google - that is the default search engine for Android and iOS. AI overviews and AI mode just have to be good enough to cause people not to switch.
Google’s increasing revenues and profits and even Apple hinting at they aren’t seeing decreased revenue from their affiliation with Google hints at people not replacing Google search with ChatGPT.
Besides end user chatbot use is just a small part of the revenue from LLMs.
bloppe
I don't think that's a distorted picture at all. Google is still handling billions of searches per day. A huge number of those include AI answers. To all those billions of people who still reach for the omnibar first, Gemini is becoming their LLM of first resort.
tim333
As someone behaving non techy I tend to chat to the Google AI just because it's there if you type something in the search bar, rather than having to go to OpenAIs website.
bambax
I like Google Search for simple searches and still use it all the time. But for "complex" searches that are more like research, ChatGPT is actually pretty good, and provides actual, working links whereas Gemini seems to hallucinate more (in my experience).
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> OpenAI’s refusal to launch and iterate an ads product for ChatGPT — now three years old — is a dereliction of business duty, particularly as the company signs deals for over a trillion dollars of compute.
I think this is intentional by Altman. He’s a salesman, after all. When there is infinite possibility, he can sell any type of vision of future revenue and margins. When there are no concrete numbers, It’s your word against his.
Once they try to monetize, however, he’s boxed in. And the problem with OpenAI vs. Google in the earlier days is that he needs money and chips now. He needs hundreds of billions of dollars. Trillions of dollars.
Ad revenue numbers get in the way. It will take time to optimize; you’ll get public pushback and bad press (despite what Ben writes, ads will definitely not be a better product experience.)
It might be the case that real revenue is worse than hypothetical revenue.