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I really don't think this is true. OpenAI has no moat because they have nothing unique; they're using mostly other people's (like Transformers) architectures and other companies hardware.

Their value-prop (moat) is that they've burnt more money than everybody else. That moat is trivially circumvented by lighting a larger pile of money and less trivially by lighting the pile more efficently.

OpenAI isn't the only company. The Tech companies being beaten massively by Microsoft in #of H100s purchases are the ones with a moat. Google / Amazon with their custom AI chips are going to have a better performance per cost than others and that will be a moat. If you want to get the same performance per cost then you need to spend the time making your own chips which is years of effort (=moat).



> That moat is trivially circumvented by lighting a larger pile of money and less trivially by lighting the pile more efficently.

Google with all its money and smart engineers was not able to build a simple chat application.


But with their internal progression structure they can build and cancel eight mediocre chat apps.


What do you mean? Gemini app is available on IOS, Android and on the web (as AI Studio https://aistudio.google.com/).


It's a joke about how Google has released/cancelled/renamed many messenging apps.


It is not very good though.


Gemini is pretty good, And it does one thing way better than most other AI models, when I hold down my phone's home button it's available right away


That's a shame on Google, Apple, Samsung, etc. Voice and other activation methods should be open to any app that claims to be an assistant. An ugly way of "gatekeeping".


"OpenAI has no moat because they have nothing unique"

It seems they have high quality trainingsdata. And the knowledge to work with it.


They buy most of their data from Scale AI types. It's not any higher quality than is available to any other model farm


> That moat is trivially circumvented by lighting a larger pile of money and less trivially by lighting the pile more efficently.

DeepSeek has proven that the latter is possible, which drops a couple of River crossing rocks into the moat.


The fact that I can basically run o1-mini with deepseek:8b, locally, is amazing. Even on battery power, it works acceptably.


Those models are not comparable


hmmm... check the deepseek-r1 repo readme :) They compare them there, but it would be nice to have external benchmarks.


When you want to use AI in business you need some guarantees that the integration will not break because the ai company goes down or because of some breaking changes in a year. There is a reason why MSFT is in business. Similarly you will not buy Google because they do not like keeping products forever, you will not buy some unknown product just because it is 5% cheaper. OpenAI has a strong brand at the moment and this is their thing, until companies go to MSFT or AMZ to use their services with the ability to choose any model.


Brand is a moat


Ask Jeeves and Altavista surely have something to say about that!


Add Yahoo! to that list


Their brand is as tainted as Meta's, which was bad enough to merit a rebranding from Facebook.


> OpenAI has no moat

... is definitely something I've said before, and recently, but:

> That moat is trivially circumvented by lighting a larger pile of money

If that was true, someone would have done it.




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