Discussion

The OpenAI Graveyard: All The Deals And Products That Haven’t Happened

Mistletoe: Has there ever been a period o time where people saw a bubble coming and that we were in one, but it just inexorably refused to pop/drug out this long? This isn’t a rhetorical question, I’m wondering how this period compares to other irrational periods of the economy like railroad fever etc.

cmiles8: It’s not been that long really. The dot com bubble was called a bubble for a while before it finally imploded. And just like now folks were in massive denial that it was a bubble.

woah: My guess is Sam Altman is a better VC than CEO. Better at hype, networking, fund raising, and back room political hijinks than shipping a focused productHe seems to be trying to take almost a "venture studio" approach by throwing shit at the wall, but the problem with these things is always that the "internal startups" are "founded" by people who don't have enough incentive or control over their product to perform as well as an actual startup, and are distracted by internal politics. And frankly, it may also be that the really good founders will just do their own startup vs working on a quasi-startup inside a large org so there's some selection bias as well.

cmiles8: This is important context in the wake of yesterday’s “raise” announcement. A lot of this stuff seems to just quietly never happen once the ink on the PR puff dries.The AI industry increasingly looks in scramble mode to keep the hype going as those storm clouds of financial and business reality get darker and darker on the horizon.

dgellow: Anthropic does look healthier, with their enterprise focus. Or am I missing something?

adventured: The LLM usage will generate hundreds of billions of dollars in ad revenue, which will be wildly lucrative in terms of margins (not as good as Google search used to be). If GPT is a leader in that, they'll take a sizable share of that pot.There's a lot more money in being Google -> consumer ads, or Amazon -> consumer ads, or Meta -> consumer ads, than there is in being Anthropic -> enterprise.Just take a look at the enterprise. Amazon's ad business alone is already a better business than Oracle or SAP or Salesforce, with superior margins, and it's growing faster too.And of course everybody knows the Google & Meta ad monsters.The only question remaining is who is going to extract all those LLM ad dollars, how will that break out. Right now it's Gemini and GPT in the obvious lead, with Anthropic in third, and Meta & Grok nowhere to be found (permanent situation for those).

EGreg: So is OpenAI on track to overtake Google for discontinuing projects?

cmiles8: They nominally come across as a more stable ship with less clouds over its leadership.However all of the major privately held AI players are struggling to paint a business and financial picture that doesn’t look “terrible” at best and “verge of market moving implosion” at worst.For now the only thing keeping this all alive is more and more irrational cash being thrown on the pile in the faint hope that something stops the implosion from happening.

bigbuppo: And if Forbes is reporting this, that means the actual movers and shakers were talking about this months ago.

zer00eyz: Outwardly it looks much better.But between their token curtailment and time of day restrictions, and some of the clues in the code leak (regex for sentiment, telling the public client to be "brief") it seems like they are facing some capacity issues.Im guessing that the accountants at all the AI incumbents drink heavily.

iAMkenough: Not interested in a service with ads throughout my workday, which is why I switched to Anthropic.Billions in projected revenue is nothing but hype/cope. Google and Meta got their edge because their product was offered for "free" to the masses.

jmkni: I'd say he's a better CTO than CEO

bigbuppo: It's no coincidence that daytrading ascended with the dotcom era.

banannaise: Bubbles don't pop overnight. In the aftermath of any collapse, you can generally see a pretty clear pattern of red flags (and attempts to minimize them or cover them up). Some parties notice earlier than others, but the realization is generally a much more gradual process than the collapse.

raincole: > GPT-4oWhy is this on the list? Like... what? How about including GPT 3.5 and GPT 2 here too?

adrian_b: In TFA it is put on the list because some of the users of this GPT version were discontent with its cancellation, which caused even OpenAI to oscillate in its decision, so they first cancelled it, then they resurrected it and then they cancelled it permanently, probably because continuing to run it would have cost more than the generated revenue.Nothing similar happened when the earlier, presumably worse versions were discontinued.

mbesto: He ran a small (30 employee) tech startup for 7 yearsHe was a partner at YC for 8 yearsHe has no research/PhD background in AI and is the CEO of an AI companyThere is no objective data point in which he's a better CTO than a CEO

operatingthetan: >The LLM usage will generate hundreds of billions of dollars in ad revenue, which will be wildly lucrative in terms of margins (not as good as Google search used to be).This seems like ... not the situation we are in. LLMs are great for coding now but their text generation capabilities aren't exactly capturing the masses or replacing their jobs yet. People are already tired of the deluge of fake content on the internet, it's not going to drive a second revolution in web ads.The $20-200 LLM plans are all subsidized and aren't paying for themselves. Something has to give here.

steveBK123: > The $20-200 LLM plans are all subsidized and aren't paying for themselves. Something has to give here.Whats interesting to me as well as much as companies are pushing AI adoption, i have started to hear AI token spend limits enforced across a few companies, so its not entirely clear that b2b can make them profitable yet either.If all the models reach good enough, then low cost provider would win. Gemini seems like a safer bet since Google controls more of the stack / has more efficiencies / cross selling / etc.It’s not like “best” has won any other b2b arms race in the past.

fred_is_fred: And that people are going to end up in jail - but only if they are under 30.

adventured: LLM usage will largely replace traditional search, and that's stage one. To be specific, search will be consumed by the LLMs, it'll be merely an aspect of what they do for the user, and that'll include handling the more intricate details of the search, refining the search, understanding the results of search, etc. The age of the typical user handling any of that is about to end. Search will more be a feature of Gemini in the not very distant future, rather than Gemini being bolted onto/into search.Fuller integration into the user's life will bring ever more ad opportunities (and it doesn't matter if the HN base hates that notion, it's going to happen regardless). That'll happen over the next decade gradually.Shopping, home management, tasks (taxes, accounting, lifestyle, reminders, homework, work work, 800 other things), travel (obvious), advice & general conversation (already there), search (being consumed now), gaming (next 3-5 years to start), full at-work integration (gradual spread across all industries, with more narrow expertise), digital world building (10-15+ years out for mass user adoption). And on the list goes. It's pretty much anything the user can or does touch in life.

cmiles8: “The LLM usage will generate hundreds of billions of dollars in ad revenue”And yet every attempt to extract even minimal ad revenue has been canned to date as something nobody wants with AI providers retreating in failure.I don’t doubt that there’s “some” ad revenue to be had but there’s little evidence that ads are going to save the day here.

bdangubic: These exact words were said tens of thousands of times about Facebook (am old enough to remember those discussions :) ), “no way they can monetize on mobile” (this was the most fun).rules are simple, if you have Xbn or XXXm users on your system, you will make big bank in ads eventually

MisterTea: Who is the person in the portrait at the top of the page?

adrian_b: The CEO himself.For some reason, he does not look like a man whom I would trust with my money, but it appears that there are enough rich investors who disagree.

MisterTea: Threw me off because I have no idea what Altman looks like and the article opened with "OpenAI’s CEO of applications Fidji Simo..."

harmonic18374: It's tempting to look at trends and assume there must be a rule behind them, but it's also intellectually lazy. Please do the hard work of justifying your stance like GGP did.

bdangubic: it is a simple stance - if you have a product that is used by hundreds of millions of people ad monetization strategy will be found cause there are people a lot smarter than you and me that will get it done. here’s intellectual challenge - find a business with comparable number of users to openai which is not swimming in ad revenue - one will do

cmiles8: Google is already dumping LLMs into search and it works well and is free.

tokai: What he would be truly amazing at is shitcoin rug-pulling.

bdangubic: absolutely not the case. there isn’t a single nerve in human brains that goes “oh imma tolerate ads cause this shit’s free but if I pay a few bucks no way” - if the product you use has utility to you, you will tolerate ads provided no other acceptable alternative. not to tell you something you don’t already know but anthropic is getting ads, eventually, it is a given. so while today you may have an alternative (arguably better even if no ads in the equation) at some point you won’t have an alternative (other than running local) and you’ll tolerate ads. the thing with LLM ads is that companies can make $$$$ from “ads” you don’t see, i.e. I can (not now but in the future) companies to push my product, e.g. claude is setting up architecture and proposes upstash (which I own and am paying anthropic a lot of money) instead of any competitor. or even more silently adding dependencies on my NPM library which has free and commercial offering…

iAMkenough: Yeah sure, but for me the common man OpenAI doesn't add any value that Claude, Gemini or Meta AI doesn't also provide.If they want to out-ad those companies to the tune of billions, I'll go with the least annoying. OpenAI hasn't earned any loyalty.

operatingthetan: >If all the models reach good enough, then low cost provider would win. Gemini seems like a safer bet since Google controls more of the stack / has more efficiencies / cross selling / etc.Gemini is the best deal too. For $20: you get multiple quotas per day across the products (web, CLI, antigravity, AI Studio) 2tb of cloud storage, and you can family share the plan.

cmiles8: In large part because most companies have a set budget for IT spend. Thats how “normal” profitable companies operate outside this cash burning bonanza that’s going on.And in that reality one can’t just magically spend a bunch more on some fancy new thing, especially when said fancy new thing isn’t retuning value. So “token limits” and cost controls on B2B is entirely expected here.

steveBK123: > especially when said fancy new thing isn’t retuning valueI think this is the key element. Either they can't measure the value, or it's far far lower than anyone wants to believe, or both.I think the problem is less that it makes some coding tasks XX% faster, but that the end to end of a SWEs roles tasks is only improved by some much smaller Y%.If a CTO sets $10k/year spend limits on $500k SWEs.. they must not believe any of the hype.

jstummbillig: Oh, dear lord. Rage-bait.

sylos: It doesn't work well. The searches are wrong and uninformative much of the time.

satvikpendem: Any examples of bad ones? I find them perfectly fine for my queries.

operatingthetan: > To be specific, search will be consumed by the LLMs, it'll be merely an aspect of what they do for the user, and that'll include handling the more intricate details of the search, refining the search, understanding the results of search, etc. The age of the typical user handling any of that is about to end.We already have the tech for that, why hasn't it happened? People are revolted by the AI results in Google. AI isn't going to make people use their computers more. It's not opening up a new consumer market. This is just making each search infinitely more expensive.

satvikpendem: Who is revolted? I use the AI Google results every day when asking for specific questions, I rarely visit the webpages before anymore. Also Google already injects ads into conversations in the form of Google Shopping affiliate links.

jexe: I'm not an OAI fanboy by a longshot - but I'd view lots of experiments that didn't work out as a healthy thing, especially for a company trying to find footing in a new industry.

shimman: It's not an experiment if you publicly showcase and create tens of millions worth of marketing materials on it.Usually company "experiments" are typically hush hush, not blasted on every corporate media channel as a means to boost your company holdings.

simianwords: The bubble bursting has almost become eschatological for deniers. Keep praying that it will happen. It won't.

6510: Before he left I use to enjoy enraging a manager several layers above me. In one instance I explained that asking us to cut a few corners to get things done was fine, usually we can figure out acceptable ways of doing it. But then, it is your job to take those fake numbers and figure out how we are doing. No matter how much effort you make if bullshit goes in you know what will come out.Now imagine an entire economy working like that. Like say, LLM's are good enough to run entire companies but you don't get to run a company because you are good at it. LLM's can perfectly manage employee schedules but the real job is more like marriage counseling or group therapy. Somewhere along the road we forgot which jobs make the economy go. They are probably the ones with the lowest salaries as those lack the effort of conjuring the job into existence.Humanity needs obvious things cloths, food, housing, transportation etc but that isn't where the money is. The people cooking the books have the money and they are looking for something like a book cooking book. The market for openAI will be in lying convincingly for the benefit of the investor. Reality must be auctioned off like domain names or search engine placements. Altman is really the perfect guy for the job no one wants. ha-haAlternatively we could humble ourselves, ask the Chinese how reality works and attempt to steal their fu. It's just a thought.

TimLeland: Unfortunately I would bet OpenClaw will be on the list soon

TimLeland: Unfortunately I would bet OpenClaw is going to be on the list soon

moron4hire: "Disney’s then-CEO Bob Iger... was sold on Sora, too. He lauded Altman’s ability to “look around corners”..."WTF is that supposed to mean? I'm sorry, maybe I'm being dense. I can't figure out what "look around corners" is supposed to mean. "Think outside the box," I guess? Why "look around corners?"I mean, maybe I do get it. Altman has a weird face that looks like you can't predict where his eyes are based on where his head is. "Shifty," one might say. But I doubt that's what Iger meant.It's dumb. It's dumb corporate speak. I'm so sick of this kind of stuff getting a pass. We used to bully people over using the word "synergy." Let's make america anti-corporate-weasel again.