All the competition now is VC dollars. And the last round that OpenAI and Anthropic landed will probably be their last at favorable rates.

Oxide just closed a funding round they took solely to be able to guarantee their longevity as a vendor in order to land sales. That feels a lot like a harbinger of the easy money drying up very soon, and trying to get in before the door is locked.

The valuations are ridiculous now, which means the expectations are as well. Expectations are expensive.

While it isn't a perfect comparison, streaming platforms that have ad-subsidized subscriptions with ads (as the name suggests) certainly haven't been driven out by market competition.

I believe hysteria in this case is healthy, so we can end up with something closer the still fairly reasonable implementation of the streaming platforms, instead of the example here.

It's interesting to contrast this take with the opinions expressed on an earlier thread about OpenAI's moat (or lack thereof).

Several people pointed to Google Search as an example of "user count as moat", and an explanation of its continued dominance despite a results page dominated by "sponsored" results.

Presumably the same reasoning would apply here.

Reminds me of those absurd “selling web sites & apps like cable channels” graphics from the Net Neutrality wars.

This one apparently originated at Reddit, natch:

https://cordcutting.com/wp-content/uploads/2015/12/quink.png

> There’s enough market competition to not allow this.

Why do people think it will NOT happen? There are tons and tons of examples out there where it happened exactly like this over and over again. Why would AI suddenly be the exception?

It's really not about competition. It's about who gets the users first and/or does the best marketing

You seem to not have known the Altavista/Yahoo/Terra/AskJeeves/Lycos/InfoSeek era of search engines. There was enough market competition to not allow for ads to appear on every search.

And then, BANG!

We didn't see the majority switch from Google to Duckduckgo because of ads or privacy... Being the "default" brings network effects that is hard to switch away.

You can still have 10 different providers with advertising.

Although I agree more competition will act as a counter to spoiling the experience with advertising.

The cost to train and run these things is going to lead to fewer players eventually. I suspect we end up with 2 or 3 big players in 10 years.

How is the competition making money?

That's not how enshittification, vendor lock in, and network effects work. You're participating in the collective delusion that we have perfect market competition.

Most LLM users are not techies