AI Business: Profitable or Misguided?

This is a OpenAI news story, published by Cal Paterson, that relates primarily to Anthropic news.

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AI business

Cal Paterson

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Building LLMs is probably not going be a brilliant business

Summary

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68% Informative

Being an airline is to be in an almost uniquely terrible market position.

Coca-cola's return on equity has rarely fallen below 30% in any given year .

Airlines that get more efficient, work harder or come up with innovations aren't going to be able to "capture" the value of what they've done.

Fizzy-drinks - very favourable industry structure.

OpenAI raised $6.6 billion at a valuation of $157 billion less than two months ago .

NVIDIA make the chips that all models are trained on - regardless of cloud vendor.

NVIDIA are more powerful relative to Anthropic or OpenAI than Airbus or Boeing could ever dream of being.

If I were running an AI business I would avoid building a model at all costs.

Using a tiny bit of some expensively trained model that Anthropic has produced could be very cost effective and might make some business idea work that wouldn't have 5 years ago .

And then: not all AI businesses are building models. Building your own models looks like a undifferentiated schlep..

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informal

Language

English

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