> Why would a business pay for Slack when IRC exists?
> Why would a business pay for Dropbox when FTP exists?
About IRC / Slack: other than the fact IRC was abandoned, Slack is about control, not product. The product is terrible.
FTP / Dropbox: this comparison does not make sense.
You can theoretically do most things AWS does most of the time, yet people pay premium for it and keep paying for it, even though alternatives are cheaper, simpler and more performant.
I'd bet you that after 20 years OpenAI and Anthropic would still be around and kicking.
You might have a subpar product (for the price) but the reputation and history is what makes people open their wallets.
Depends. The bigger the bubble, the bigger the pop.
Only a few unicorns from the dot-com bust came out the other side (Amazon, Google, ... anyone else?), and that was a piddling affair compared to this one.
It's going to be debated forever whether wiring your own open source tech has a lower development cost than the equivalent AWS bill. For me, that's too broad a statement, as I have seen it go both ways. What is true: There is only some knowledge overlap between maintaining an AWS stack and having your own Prometheus logged, ceph backed set of boxes.
That is not the case with LLMs. At least, not right now. They roughly work the same and are easy to pick up. They are about as straightforward of an interface as it gets, and using them in "advanced" ways could be summarized on an index card. They are relatively fungible.
I don't see a world where OpenAI runs on brand recognition alone. It needs to be more convenient to run than local LLMs. They've done that by buying so much of the worlds hardware that it becomes more expensive to run these things locally.
Now, I think that with these companies IPO'ing and Nasdaq and other bending themseleves and their rules to cater to them (as in case of SpaceX), these companies are very close to an IPO.
So for the employees, they are probably gonna get good evaluations, atleast in the short term and perhaps they are having a problem which is worth having.
But as you have suggested, I feel like the whole thing might be flaky especially given open source models. I believe that OSS models are at worst close to literal SOTA ~6 months ago.
So OpenAI & Anthropic have to somehow always be on the edge to get better models to not lose this (imo) very small time grip that they have, all while losing billions of dollars and having to worry about profitability & so many other concerns in it of itself.
I don't think that there is any other thing inside CS or any industry where two pieces of software being almost comparable enough with not much moat around except a diff of 6 months best, is something on which trillions of dollars float around on. We don't know how things will pan out but if I have to guess, It might not be looking good for OAI, Anthropic over especially the longer horizon.