[ttul]

Furthermore, it’s increasingly clear that OpenAI is doing a “bottom-up” challenge to Microsoft and Google. I would not be surprised at all if OpenAI launches an email service to compete with Gmail, imbued with a fine-tuned model that is optimized specifically for working with email. And then a document editor… and a spreadsheet… etc. There is huge money in productivity software. Microsoft 365 generates the bulk of the “cloud” revenue on Microsoft’s P&L. IIRC, worldwide revenue from Google Workspace and Microsoft 365 - and whatever other minnows can survive underneath them - is supposed to reach $40B by 2030. I apologize for not providing the source.

[wuj]

I think it will be less of a replacement and more like a partnership, per se. It will be hard for OpenAI to challenge services like Gmail due to the network effect. Same with Microsoft 365: People are used to that ecosystem. The success of partnerships hinges on whether Microsoft and Google can develop their in-house models and integrate them into their core products. OpenAI's partnership with Apple was a successful example of this strategy.

[copperx]

Network effect? OpenAI is the fastest adopted product ever. It's the other companies who have to worry about the network effect.

[diatone]

A high rate of customer acquisition isn’t the same thing as a network effect.

OpenAI has some network effects baked into its product suite, but it’s not even in the same league as Microsoft’s bundling strategy (setting aside Google for a moment). Microsoft’s history is littered with competitors who had a better product, a faster adopted product, who were snuffed because of Microsoft’s superior distribution capabilities.

I’m on the train at the moment, but the big exception is the mobile market, and in hindsight that makes perfect sense - most of the phone market consumer grade, where bundling productivity software isn’t much of a value proposition.

It’s far more likely that OpenAI remain where they are on the value chain, because it’s easier to capture and integrate AI startups into their products. If they were to compete on productivity software, they need to differentiate with entirely new modalities of AI-informed user interfaces, or they will be yet another slightly better program that got blown out of the water by MSFT enterprise distribution

edit: to be clear my point is, why would you become a bit player in an established market when you can dominate a new market you created yourself?