> OpenAI fighting against that fate as their valuation and continued investment requirements doesn't make any sense otherwise.
Is it actually the case that OpenAI couldn't be viable if all they offered was a simple chat completion API on top of the web experience?
It seems to me the devil is all in how the margin plays out. I'd focus on driving down costs and pushing boundaries on foundation models. If you are always a half step ahead, highly reliable and reasonably cheap, your competitors will have a tough time. Valuations can be justified if businesses begin to trust the roadmap and stability of the services.
I'll tell you what's not working right now is the insane model naming scheme and rapid fire vision changes. This kind of stuff is spooking the technology leaders of large prospective customers. Only the most permanently online people can keep things straight. Everyone was super excited and on board with AI in 2024 because who wants to be left out. I think that energy is still justified in many ways, but we've also got to find a way to meet more of the customer base where they are currently at. Wrappers and agentic SDKs are not what these people are looking for. Many F500s already have a gigantic development team who can deal with deep, nasty API integrations and related state contraptions. They're looking for assurances/evidence that OAI's business & product line will remain stable for the next 5+ years before going all-in.
The point of the bear thesis on OpenAI is that training frontier models is extraordinarily expensive. They can’t produce cutting edge models, charge a cheap price, and make a profit all at once
Is it actually the case that OpenAI couldn't be viable if all they offered was a simple chat completion API on top of the web experience?
It seems to me the devil is all in how the margin plays out. I'd focus on driving down costs and pushing boundaries on foundation models. If you are always a half step ahead, highly reliable and reasonably cheap, your competitors will have a tough time. Valuations can be justified if businesses begin to trust the roadmap and stability of the services.
I'll tell you what's not working right now is the insane model naming scheme and rapid fire vision changes. This kind of stuff is spooking the technology leaders of large prospective customers. Only the most permanently online people can keep things straight. Everyone was super excited and on board with AI in 2024 because who wants to be left out. I think that energy is still justified in many ways, but we've also got to find a way to meet more of the customer base where they are currently at. Wrappers and agentic SDKs are not what these people are looking for. Many F500s already have a gigantic development team who can deal with deep, nasty API integrations and related state contraptions. They're looking for assurances/evidence that OAI's business & product line will remain stable for the next 5+ years before going all-in.