A closely related question is “what do the American labs need to do in order to justify their enormous market valuations?”
It seems like the answer cannot possibly be “gradually improve model capability while figuring out how to better monetize inference.” The valuations are just way too high for that to be sufficient.
Surely the answer has to be “continually achieve large leaps in capability comparable to the first consumer releases of ChatGPT while also maintaining a significant capability lead over open models and new competitors.”
And does anyone think that’s going to happen? Even with state-level protection from competition (which incidentally would significantly harm the American economy), the large leaps in capability seem to be coming fewer and farther between.
What appeared initially to be a huge innovation was later easily duplicated by many. There are no platform-lockins or network effects. Switching costs for users are zero, and there are low barriers to entry, with vast numbers of models to choose from and more appearing every day. As a business a token will be a commodity like an electron. Doesnt matter who produces it, or how (solar, wind, coal, nuclear etc) as long as it powers my toaster.
everything else we see today is just preparing for it.