True, but presence of significant revenue is still promising. It's much better to have an "expensive compute" problem than a "nobody wants to pay for the product" problem.
Keep in mind that not only is OpenAI being directly propped up by investor hype, the downstream API users who contribute much of their revenue are also being propped up by investor hype. A big chunk of OpenAIs revenue is actually even more VC money in a trenchcoat.
The biggest marker of a bubble, to me, is that you have money-losing startups selling to other money-losing startups. On paper you see a lot of 'line go up' but it's just a lot of circulation in a closed body of water which will eventually evaporate.
Uber is an outlier because in a functioning economy that valued workers we wouldn’t have shipped all our jobs overseas and made gig economies the last line between housing and street schizophrenia.
>True, but presence of significant revenue is still promising.
If started selling 5 dollar bills for 1 dollar, I could generate a lot of revenue with $150B. You wouldn't believe the demand we would see for $5 bills.
The bandwidth costs made it deeply loss making for a long time despite having loads of engagement and ad revenue. However over time they became more cost efficient at sending video over the internet and became profitable.
This strategy obviously doesn't always work, with WeWork being the canonical example. But it's not guaranteed to fail either.
YouTube's network effect creating a winner-take-most was recognized, pitched, and valued from the very start.
The capabilities of LLMs are impressive, but none of them have published an idea I consider to have the same potential for a trillion $ monopoly that the current hype looks like.
There are far more similarities with the dot-com hype.
No critical first mover advantage in sight. All parts are replaceable for the cheapest variant with little to no down side to users.
It wasn't obvious at the time YouTube would have a network effect though. It was very dependent on coming up with a great recommendation algorithm, along with monetization and revenue sharing. At the time, YouTube didn't have anything like that, iirc.
Even the basic front page of youtube was of immediate and obvious value to a creator, and would increase disproportionately in value the more people were on YouTube. The same goes for Amazon, and the same goes for Facebook.
All the LLM providers are - extremely useful - tools. Currently I can only see the 'non-monopoly' proportional improvement when their userbase grows from 100 to 1000.
But I might be wrong, and I wouldn't be surprised if in hindsight it will be obvious what the real disproportionate advantages there were to be found.
Technically true, though in fairness it is unlikely the original owners would have gotten YouTube to where it is today. On the other hand there are companies who didn’t recognise they were nothing more than passing fads, refused buyouts, and crumbled.
I was there when YouTube became a thing, and I was running a music video-hosting website that I had built myself (on top of phpBB, even). We were encoding videos in Windows Media and RealPlayer formats.
There were LOTS of funded competitors to YouTube between 2006 and 2009, including Viddler (who paid Gary Vaynerchuk a small fortune to host his WineLibraryTV show there exclusively), DailyMotion (which is still alive today, although no longer a threatening contender), etc.
In 2009 I had a coaching business and was buying marketing courses and software which would deploy your videos across 40+ different video websites (including Google Video which was a separate thing until they acquired YouTube and merged those), and YouTube wasn't yet amounting to 50% of our video traffic.
I think you might be mistaken with the bold statement above.
They're still early on the growth curve where there's enough opportunity for future growth that investing in scaling and improvement is more important than turning an immediate profit.
Remember when everyone on HN was sure Uber would never be profitable? Or Tesla? Or Amazon?
I do remember that, and I would say that they are still largely correct. Tesla needed government subsidies, Amazon needed AWS, and Uber needed a pandemic and Uber eats. The core businesses that HNers were referring to are still weak.
As did almost every large tech company today. Amazon lost money for decades.
Are we really still doing this nonsense? If Open AI wanted to become profitable they could do it inside of 12 months - growing companies don't care about profitability (nor should they)
You're way too smug for spewing what is clearly survivorship-bias.
All currently known profitable use-cases are competing on price. All the unicorn examples you're biased for had in their pitch deck the network effect of being the largest.
OpenAI, Grok, etc, have shown no unique value prop or an idea with monopoly potential.
WeWork trapped themselves into a real estate hole, selling services for less than they rented property for.
OpenAI is currently in an explicit non-profit seeking mode using a technology that we have demonstrated 10-100x or greater decreases in compute to achieve the same outcomes.
This is not a declaration that OpenAI will become wildly profitable. This is just me saying that these aren't comparable companies.
WeWork was a scam to enrich the founders of the company. They owned or had interests in many of the properties that WeWork leased from. I'm surprised no one was thrown in prison.
I wonder how long it'll last. Just using myself as a demo customer: I canceled my subscription because Google AI Studio was doing more for me, and it's free. OpenAI is not really competitive at $20 a month anymore.
You are comparing apple with oranges.
Cursor is not an LLM and yes, it has a business model. So does openrouter and million other applications that can switch API to the low bidder any moment.
Lots of people dervive great value from things that are too easily reproduced to be directly profitable.
Google gives everyone free access to a good spreadsheet tool, even though Microsoft Office exists.
Web browsers are free, despite the value of the entire internet.
Compilers are free, despite the value of all software collectively.
LLMs being really valuable doesn't automatically mean anyone can get rich from them.
I think everyone last year parroting "moat!" was cringe (like Altman of all people wouldn't know about this already, c'mon), but you do actually need something that other people don't have. I expect Altman's already got stuff in mind, but he's hardly the only one, and that means it's a game of "which multibillionaire with lots of experience building companies will win?", and that's hard for non-skilled normies (in this case incluing me) to guess.
HN already had its ipod moment back in 2007. /.'s ipod moment was in 2001, not as longer before that as I would have guessed.
Re: Dropbox, from a well known user. It didn't age well and we've been asked not to repeat it because it makes the author with connections to this site's operator look bad.
> 1. For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem. From Windows or Mac, this FTP account could be accessed through built-in software.
This lame HN trope of LLMs having no business model needs to die.