- OpenAI wants to be the consumer version of AI, modeled after Google and Meta, with a mostly free universal service powered by ads and e-commerce. They haven't fully shown that model can work. The big problem is the lack of zero marginal costs as each new user requires GPU spend.
- Anthropic positions itself more as enterprise AI, modeled after Microsoft ironically enough, and charges big companies for services. The economics of coding agents work but GPUs get expensive fast and open models are getting good enough for most use cases.
So it's a race between ads and e-commerce offsetting AI spend and open source eating almost everyone's lunch.
My bet is that OpenAI will make free ChatGPT work through ads.
The best option at this point is kick the can down the road and hope market sentiment improves next year. Not much signal that it will, and quite a lot of signal the sentiment only declines, but pumping the brakes is the least worst option on the table.
Unless Anthropic also cancels its IPO, this probably isn't it.
What are you basing this on? Both are currently doing rounds/tenders that are placing without problems.
The media treats these two differently, as do financial influencers. But I'd be careful about conflating either of them with the market.
The finance market and the market for these products are two different things. Anthropic has definitely been stealing market share to OpenAI in the past few month on many segments (be it enterprise or even consumers).
Can you give an example that shows funds actually souring on OpenAI? (Like, not less enthusiastic than before. Actually souring. Selling.)
Open source is starting to slowly become a source of frustration for frontier labs In the discussion around value for money.
It’s such a fast paced and competitive industry, anyone who takes even a short break is going to have a hard time coming back from it, and that’s basically what they’ve done.
Go ahead and incorporate that in those 3 variables... lets see what you know before I bother replying.
Otherwise people try other cheaper models, and they find out those models work perfectly for what they need.
Ironic, considering that they got their ball rolling by taking from Open Source with neither credit nor attribution.
I only use free Gemini Pro to plan then scrape the log in Google Drive into local Qwen/Gemma+pi set up
I can plan and architect with Gemini on my phone or wherever and a cron job + custom JSON parser at home updates context in local model setup
How can you tell that? "The Market" at the moment is the private investor market and, to my (admittedly untrained) eye, those two companies are being treated exactly the same when they raise.
Reddit has been one of the world's top websites for over a decade, yet they are totally irrelevant in terms of ad product market share.
ChatGPT ads are low quality placed at the bottom barely noticed.
ChatGPT ads will get better. Meta's social userbase is drying up. Google keeps introducing and removing things from chrome to keep access to spy on you for them alone. We'll see how things pan out but in ten more years reddit ads will still be worthless.
It will draw a non-zero number just curious people who never use ChatGPT.
And bots are exfiltrating model knowledge for the benefit of competition.
What do you mean? I promise I'm not being facetious or satirical. I'm just too simple and conservative of an investor to understand this comment. (for example: Is the price-to-earnings ratio too high? I probably wouldn't want to invest in the business.)
Today everyone knows there's no agi coming up and it will be a very long time until they generate any profits, if ever.
How do you even value a company when we don't even know if GPT-6 will be made available to the general public?
The populist backlash is coming for datacenters. I'm unconvinced that's truly problematic to these companies given data travels close to the speed of light and plenty of countries have energy, data interconnects and governments unresponsive to locals' concerns.
Think it’s pretty safe to assume theirs are less of a dumpster fire
Maybe they will show major Ad revenue and Codex sales and get a higher price next year but it’s a risk.
typo
I don't think so. There's only two real options here:
1. There's no bubble to pop
2. There's a bubble to pop
In the first case, the first AI company to IPO gets a ton of money from the market who wants to get in on this, and the second to IPO finds that there's not enough capital left in the public markets and has to sell for less than they'd wanted to.
In the second case, the fir5st to IPO gets money from their shares, which drop in value (bubble popping), adn the second to IPO gets absolutely nothing (bubble popped).
In both cases, the first to IPO gets the rewards, the second gets either less or nothing.
Its already not anthropic or openAI.
But there might still be some water in the well for the second one, there definitely won't be for the third one.
Perhaps that's Anthropic's plan, is they believe OpenAI is weak. If the IPO is good they win. If it's bad OpenAI loses.
Surely if your company isn't just blowing smoke then you have nothing to worry about. Or is this an admission that the insane valuation for these companies is currently just bullshit?
Not really. Plenty of solid companies have to wring their hands around IPO timing based on market conditions. Sometimes, this is due to valuation multiples. Sometimes it's due to fads, e.g. investors preferring capital-structure efficiency versus low leverage.
When was the last time someone seriously asked if OpenAI was going to go public before Anthropic? For me, it's been at least months, maybe closer to a year. The corporate-governance complexity drove half of that, momentum the other half, and messaging from both companies having been consistent with that timeline for months sealed the deal.
Anthropic on 1st June: https://www.anthropic.com/news/confidential-draft-s1-sec
OpenAI shortly before June 8: https://openai.com/index/openai-submits-confidential-s-1/
That was less than a month ago. They seemed to be on a similar pace at least from my point of view.
SpaceX's stock volatile? It's a shame nobody saw that coming.
is tesla stock not volatile too? elon stock's are more like today's crypto than a 20th's century company stock w dividends
It's funny with stock prices - they all go up and down a bit in kind of random ways but people project all sorts of stories onto them that often don't relate much to reality.
I thought it opened at 135.
Seeing something coming is very different from having it not only confirmed but also quantified.
If S&P had changed its rules for the S&P 500, there would have been an effect. In the end, the drama was almost entirely a spectacle for finance influencers and their viewers.