[changoplatanero]

Imagine you were looking at Google, a sustainable and profitable business, and you thought you saw a once in a lifetime opportunity to compete with them and take their position as a leading tech company. How much money would you need to spend to make a credible attempt?

Google has had decades to accumulate intellectual and physical capital. Catching up quickly means spending >500 billion. If you can actually dethrone Google (admittedly not an easy task) then it will have been worth it. If not, I suppose it's wasted investment.

Now what happens when three or four startups vie for this opportunity at once? Well that's how you get $2 trillion in captial investments per year.

[jayd16]

What a strange train of thought. Why would you need that amount in this hypothetical? Why would dethroning them alone be worth it? It would literally only be worth it if you could do so profitably.

More realistically, it seems like someone calculated that it could still be profitable up to several hundreds of billions of dollars which explains the initial investment. And continued investment can be explained by trying to salvage the existing capital spend. But even if it's the best option those companies have now as far as a hypothetical goes, it still might not have been worth it.

[mstank]

I think the opposite is true. To dethrone the top tech company, you need to be able to spend much less than them, at higher efficiency and faster growth. Google didn’t catch up to Microsoft and Apple by spending more, they caught up by developing business lines and flywheels that were much more capital efficient.

If it’s a spending game, the incumbent has a huge advantage.

[doctorpangloss]

You: says someone has a strange train of thought, and then you also ask how can a company become profitable in a situation where it becomes a monopoly? Dude, the winner raises prices? "AI" is not expensive enough!

[raincole]

> Why would you need that amount in this hypothetical?

They didn't say you need that amount. They say how much you're willing to spend. Need = floor, willing = ceiling.

It's a very reasonable argument, except one fact: the chance that you actually dethroning Google is practically zero as Google also has capital, infra and data to train AI. The best plausible outcome is to share the market with Google.

[jayd16]

Where are you getting that?

> Catching up quickly means spending >500 billion.

What part of that implies it's about willingness?

[fred_is_fred]

Most disruptive start-ups don't come from a giant pile of cash, but from new ideas that the old players can't or won't adopt. It did not take $500B to build a digital camera.

[Forgeties79]

No but the first one was the result of Sasson’s R&D while at Eastman-Kodak, a massive company that failed to capitalize on it years before anyone else was near it. They easily could’ve been the big player if they didn’t fear the impact on film sales. They had a solid decade head start and blew it.

The way digital cameras developed (hyuk hyuk) is arguably exceptional, definitely not a clean example.

[giancarlostoro]

Meanwhile Meta / Mark Zuck is in crisis mode trying to come up with some meaningful way to break into AI, instead of competing in what's currently hot, they'll probably remake Elons weird persona system, which is not exactly the hottest thing on the planet, and billions down the drain that could have gone into building more efficient LLMs instead.

[ethagnawl]

> billions down the drain that could have gone into building more efficient LLMs instead.

Or any one of thousands of other ventures which could be more beneficial to humanity, the environment, etc.

[giancarlostoro]

Agree, though if he's so fixated on AI, and Meta has released plenty of things in AI that have affected the industry in general, he could invest in making less resource intensive LLMs.

[etempleton]

Or at least profit margins.

[ethagnawl]

True!

[mikewarot]

Dethroning Google requires having a search engine that returns consistently better results. As they continue to force more and more AI generated results and Ads into their output, this becomes easier and easier.

An open source, networked search engine that doesn't have any ads, and we all collectively host, could do this. Someone is going to pull this off eventually.

You don't have to match the infrastructure of an existing player, you just have to have a profitable path to get there organically.

Oh, and not take the inevitable buyout when it gets offered.

[etempleton]

In this scenario at minimum three fail and probably all four since Google is also in this fight. Supports the bubble thesis.

[elorant]

Problem is that Google practically invented LLMs. So it’s not like they’d sit around while you try to eat their lunch.