Why OpenAI’s $157B valuation misreads AI’s future
OpenAI's $6.6 billion fundraise earlier this month was a statement about where AI will create value and who stands to capture it. Its investors are betting that AI is so transformative that the usual rules of focus and specialization don't apply - the first company to achieve AGI will win everything. However, there are many barriers to overcome before its goal can be achieved. This article looks at the challenges that OpenAI faces and where the most promising opportunities in AI for investors and startups lie. New technologies, no matter how revolutionary, don't automatically translate into sustainable businesses.
There is some validity to this article in my opinion, while also having a basis in nonsense.
For LLMs, the value is not in that layer but what is built on top. The LLM is basically a commodity since they all are essentially training on the same data.
This is where the social media entities have an advantage. It can bring features out to users via the existing operations. OpenAI doesnt have that. That means they are lacking the consistent (free) data flow along with the ability to easily direct services.
For example, Grok just rolled out image generation. This means X premium users can upload an image and get an explanation. What does OpenAI do with this feature?
That said, the major cost is in building infrastructure. That is where we are at.