[crorella]

It’s odd that MS is releasing models they are competitors to OA. This reinforce the idea that there is no real strategic advantage in owning a model. I think the strategy is now offer cheap and performant infra to run the models.

[mlepath]

> This reinforce the idea that there is no real strategic advantage in owning a model

For these models probably no. But for proprietary things that are mission critical and purpose-built (think Adobe Creative Suite) the calculus is very different.

MS, Google, Amazon all win from infra for open source models. I have no idea what game Meta is playing

[chefandy]

> I have no idea what game Meta is playing

Based on their business moves in recent history, I’d guess most of them are playing Farmville.

[emidoots]

Meta's entire business model is to own users and their content.

Whether it be Facebook, Instagram, Threads, Messenger, WhatsApp, etc. their focus is to acquire users, keep them in their platforms, and own their content - because /human attention is fundamentally valuable/.

Meta owns 40% of the most popular social media platforms today, but their attention economies face great threats: YouTube, TikTok, Telegram, WeChat, and many more threaten to unseat them every year.

Most importantly, the quality of content on these platforms greatly influences their popularity. If Meta can accelerate AI development in all forms, then it means the content quality across all apps/platforms can be equalized - video on YouTube or TikTok will be no more high quality than on Facebook or Instagram. Messages on Threads will be no more engaging than that on Twitter. Their recent experiments with AI generated profiles[0] signals this is the case.

Once content quality - and luring creators to your platform - are neutralized as business challenges that affect end users lurking on the platform and how effectively they can be retained, then it becomes easier for Meta to retain any user that enters their platforms and gain an effective attention monopoly without needing to continue to buy apps that could otherwise succeed theirs.

And so, it is in their benefit to give away their models 'for free', 'speed up' the industry's development efforts in general, de-risk other companies surpassing their efforts, etc.

[0] https://thebaynet.com/meta-faces-backlash-over-ai-generated-...

[miki123211]

Or, to put it another way:

Meta makes money from ads. To make more money, they either need to capture more of their users' time and show more ads, or show better ads that users click more often.Meta is betting on AI models making it easier to do both.

Better generative AI means you can make more ads faster, which means there are more ad variants to a/b test across, which means it's easier to find an ad that users will click.

To make users stay on their platforms, Meta figures out what content will keep them there, and then shows them that content. Before gen AI, they were only able to show existing content from real users, but sometimes the "ideal" thing for you hasn't been created yet. They bet on the fact that they'll be able to use AI to create hyper-personalized content for their users that engages them better than human-made content.

[chefandy]

Word. I was mostly just making a joke about FarmVille— the classic engagement-vampire facebook game.

[angoragoats]

Can you explain how development of better generative AI (which I assume is what you mean when you say AI) will mean that “content quality across all apps/platforms can be equalized”? Unless you mean the content quality will go to shit equally everywhere (as it did in their AI profile experiment) I’m not sure I understand what you’re saying.

[timrogers]

Meta’s definition of quality is not the same as your definition of quality. For them, quality is (within reason) what drives “engagement” (aka time spent in their apps).

It might be that many people’s aesthetic sensibility is that AI-generated content is slop, but I’d still bet that tailored-perfectly-to-you content (and ads) will be highly engaging

[potatoman22]

> I have no idea what game Meta is playing

I think they're commoditizing their complement [1]. Engaging content helps Meta, and LLMs make it easier to create that content. Their business model has never been selling API access and releasing the model enables the community to improve it for them.

[1] https://gwern.net/complement

[ls612]

Meta seems to be playing the “commoditize your complements” game. Which is good for the rest of us who get close to SotA open weights models.

[PittleyDunkin]

> It’s odd that MS is releasing models they are competitors to OA.

> I think the strategy is now offer cheap and performant infra to run the models.

Is this not what microsoft is doing? What can microsoft possibly lose by releasing a model?

[lolinder]

That's exactly what they're saying: it's interesting that Microsoft came to the same conclusion that Meta did, that models are generally not worth keeping locked down. It suggests that OpenAI has a very fragile business model, given that they're wholly dependent on large providers for the infra, which is apparently the valuable part of the equation.

[krick]

To be fair, OpenAI's products are not really models, they are... products. So it's debatable if they really do have anything special.

I don't really think they do, because to me it seemed pretty much since GPT-1, that having callbacks to run python and query google, having "inner dialog" before summarizing an answer and a dozen more simple improvements like this are quite obvious things to do, that nobody just actually implemented (yet). And if some of them are not obvious per se, they are pretty obvious in the hindsight. But, yeah, it's debatable.

I must admit though, that I doubt that this obvious weakness is not obvious to the stakeholders. I have no idea what the plan is, maybe what they gonna have that Anthropic doesn't is gonna be a nuclear reactor. Like, honestly, all we are pretending to be forward-thinking analysts here, but in reality I couldn't figure out that Musk's "investment" into Twitter is literally politics at the time of it happening. Even though I was sure there is some plan, I couldn't say what it is, and I don't remember anybody in these threads expressing clearly enough what is quite obvious in the hindsight. Neither did all these people like Matt Levine, who are actually paid for their shitposting: I mostly remember them making fun of Musk "doing stupid stuff and finding out" and calling it a "toy".

[bongodongobob]

What product? A chat window? I'm not trying to be rude btw, but if the product isn't the LLM itself, that's all they have.

[kaonwarb]

I regularly use several features within ChatGPT that are well beyond a chat window. Advanced Voice, DALL-E integration, Projects, and GPTs (mostly a couple private ones I created for my own use). There are other features that I don't use, like Canvas. Perhaps the sum of these still isn't an impressive product in your eyes, but it's surely more than just a chat window.

[blackqueeriroh]

Interesting, so apparently UI and UX and responsiveness and polish all don’t matter for products? We can just ship shittily drawn interfaces now?

[solarkraft]

They aren’t that good. It’s mostly well rounded now, but on nacOS it’s often impossible to select parts of code sections.

[PittleyDunkin]

> To be fair, OpenAI's products are not really models, they are... products

What's the distinction? What kind of functionality do they offer that other models don't?

[brookst]

A model is an ingredient in an AI product. The product includes the UI, tools / RAG, apps on various platforms, system prompts and personality, and so on.

Lots of products have been successful without a technical moat. Facebook has network effects, Apple has UX (though silicon has become a technical advantage if not moat), Adobe has “everyone knows how to use these tools” switching costs, Google has brand synonymous with search.

Companies are betting that models will be commodities but AI products will be sticky.

[szundi]

ChatGPT.com does much more than for example Llama3.2-vision. It can search the web automatically, write code and run it just to answer you, much more agency.

[kyriakos]

I use OpenAI not just because it has decent models that work decently by default but because I don't need to care on how to setup a model on a cloud provider and their API is straight forward. They are quite affordable too (e.g. TTS is one of the cheapest I found for its quality)

I could switch to a different provider if I needed to maybe with cheaper pricing or better models but that doesn't mean OpenAI doesn't offer a "product".

[miki123211]

Open AI is the only company that really matters in the consumer conversational AI space.

Their unique value-adds are the Chat GPT brand, being the "default destination" when people want AI, as well as all the "extra features" they add on top of raw LLMs, like the ability to do internet searches, recall facts about you from previous conversations, present data in a nice, interactive way by writing a react app, call down to Python or Wolfram Alpha for arithmetic etc.

I wouldn't be surprised if they eventually stop developing their own models and start using the best ones available at any given time.

[lolinder]

> in the consumer conversational AI space.

The "consumer conversational AI space" only exists right now as a novelty, not a long-term market segment. In the not too distant future that space will be covered for most users for free by their hardware manufacturers, and the number of people willing to pay a monthly subscription to a third party will drop even further than it already has.

[potatoman22]

I think it will be at least a few years until your average Joe can run a speech to speech model on their phone.

[lolinder]

I didn't say anything about running locally. Siri and Google Assistant (Gemini) are what I had in mind: assistants bundled with the phone will remove the need to pay for ChatGPT.

[blharr]

I mean they have name recognition and a userbase, but they're hardly the best at doing any of those features.

Default destination for many is still just Google, and they've added AI to their searches. AI chat boxes are shoehorned into a ton of applications and at the end of the day it'll go to the most accessible one for people. This is why AI in Windows or in your Web Browser or on your phone is a huge goal.

As far as extra features, chat GPT is a good default, but they're severely lacking compared to most other solutions out there.

[sumedh]

> It suggests that OpenAI has a very fragile business model

That is the reason they are making products so that people stay on the platform.

[lolinder]

Their big risk there as I see it is that the market for "I need an AI" is much much smaller than they thought it would be. People don't generally need or want to pay for "AI", they want to pay for solutions to specific problems.

This means that in a world where AWS/Azure/GCP all compete in the compute and the models themselves are commodities, AI isn't a product, it's a feature of every product. In that world, what is OpenAI doing besides being an unnecessary middleman to Azure?

[wongarsu]

The ones at the forefront of the "I need an AI" hype are selling agents, or tools that integrate in your email workflow, or some other tool with AI in the name. OpenAI is selling the shovels, the backend API those services are using. AWS/Azure/GCP are selling factory space and are providing blue-prints for shovels. Which is compelling at scale, but if you are busy selling AI tools to people who don't know better it's faster to just use an API to whatever OpenAI offering is SOTA or close to SOTA.

I'd agree there isn't much money in it. OpenAI should probably milk the revenue they get now and make hay while the sun is shining. But their apparent strategy is to bet it all on finding another breakthrough similar to the switch from text completion to a chat interface

[lolinder]

Yeah, the problem with selling shovels where shovels=APIs is that APIs cost almost nothing to replicate and are not copyrightable. Tools like Ollama and LiteLLM already offer APIs that are drop-in replacements for OpenAI.

OpenAI isn't losing yet because their models are still marginally better and they have a lot of inertia, but their API isn't going to save them.

> But their apparent strategy is to bet it all on finding another breakthrough similar to the switch from text completion to a chat interface

I'm still convinced that their strategy is to find an exit ASAP and let Altman cash out. He's playing up AGI because it's the only possible way that "AI" becomes a product in its own right so investors need to hear that that's the goal, but I think he knows full well it's not in reach and he can only keep the con going so long. An exit is the most profitable way out for him.

[ta988]

They are the useful idiots that attracted the funding to take the risks and make the technology emerge but didn't have the right marketing and political power. They will disappear as fast as they appeared. It is a common tale in technologies, a lot of companies who invented and/or developed something and did all the hard work just couldn't compete when it got comoditized.

[m3kw9]

OpenAI has infrastructure and a product around serving to people plus they have SOTA models. Joe blow can’t just take a Qwen or whatever and start making money at scale

[m3kw9]

They are releasing non sota models.

[buyucu]

According to many press stories in the past year, the relationship between Microsoft and OpenAI has been very strained. It looks more and more like that both sides are looking for opportunity to jump ship.

This is a very clever move by Microsoft. OpenAI has no technological moat and a very unreliable partner.

[easton]

I think they want/need a plan b in case OpenAI falls apart like it almost did when Sam got fired.

[naasking]

> This reinforce the idea that there is no real strategic advantage in owning a model.

Yes, because you can't build a moat. Open source will very quickly catch up.