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Google is winning on every AI front

(www.thealgorithmicbridge.com)
993 points vinhnx | 7 comments | 12 Apr 25 03:58 UTC | HN request time: 0.16s | source | bottom
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codelord ◴[12 Apr 25 06:51 UTC] No.43661966[source]▶
As an Ex-OpenAI employee I agree with this. Most of the top ML talent at OpenAI already have left to either do their own thing or join other startups. A few are still there but I doubt if they'll be around in a year. The main successful product from OpenAI is the ChatGPT app, but there's a limit on how much you can charge people for subscription fees. I think soon people expect this service to be provided for free and ads would become the main option to make money out of chatbots. The whole time that I was at OpenAI until now GOOG has been the only individual stock that I've been holding. Despite the threat to their search business I think they'll bounce back because they have a lot of cards to play. OpenAI is an annoyance for Google, because they are willing to burn money to get users. Google can't as easily burn money, since they already have billions of users, but also they are a public company and have to answer to investors. But I doubt if OpenAI investors would sign up to give more money to be burned in a year. Google just needs to ease off on the red tape and make their innovations available to users as fast as they can. (And don't let me get started with Sam Altman.)
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netcan ◴[12 Apr 25 09:17 UTC] No.43662766[source]▶
> there's a limit on how much you can charge people for subscription fees. I think soon people expect this service to be provided for free and ads would become the main option to make money out of chatbots.

So... I don't think this is certain. A surprising number of people pay for the ChatGPT app and/or competitors. It's be a >$10bn business already. Could maybe be a >$100bn business long term.

Meanwhile... making money from online ads isn't trivial. When the advertising model works well (eg search/adwords), it is a money faucet. But... it can be very hard to get that money faucet going. No guarantees that Google discover a meaningful business model here... and the innovators' dilema is strong.

Also, Google don't have a great history of getting new businesses up and running regardless of tech chops and timing. Google were pioneers to cloud computing... but amazon and MSFT built better businesses.

At this point, everyone is assuming AI will resolve to a "winner-take-most" game that is all about network effect, scale, barriers to entry and such. Maybe it isn't. Or... maybe LLMs themselves are commodities like ISPs.

The actual business models, at this point, aren't even known.

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tonyedgecombe ◴[12 Apr 25 09:59 UTC] No.43662990[source]▶
>It's be a >$10bn business already.

But not profitable yet.

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miohtama ◴[12 Apr 25 10:27 UTC] No.43663132[source]▶
For comparison, Uber is still not profitable after 15 years or so. Give it some time.
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jefftk ◴[12 Apr 25 10:37 UTC] No.43663186{3}[source]▶
Uber had their first profitable year in 2023, and their profit margin was 22% in 2024.

https://finance.yahoo.com/news/uber-technologies-full-2024-e...

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1. datavirtue ◴[12 Apr 25 13:57 UTC] No.43664411{4}[source]▶
They are still FAR in the red. Technically have never turned a profit. Among other famous companies.
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2. jefftk ◴[12 Apr 25 14:07 UTC] No.43664515[source]▶
I'm not a finance person, but how is net income of $9.9B for FY 2024 not profit?
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3. ecedeno ◴[12 Apr 25 15:16 UTC] No.43665112[source]▶
I assume they mean the profits in the past couple years are dwarfed by the losses that came before. Looking at the company's entire history, instead of a single FY.
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4. jefftk ◴[12 Apr 25 15:49 UTC] No.43665419{3}[source]▶
Maybe? But that's not what anyone means when they describe a company as profitable or not.

I was guessing they meant something like the net profit only came from a weird tax thing or something.

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5. sib ◴[12 Apr 25 18:32 UTC] No.43666851[source]▶
Uber is a profitable company both in 2023 and - to the tune of billions of dollars - in 2024. Please read their financials if you doubt this statement.
6. UncleEntity ◴[12 Apr 25 18:52 UTC] No.43666992{4}[source]▶
Seems like the difference between a profitable investment and a profitable company.

They invested tens of billions of dollars in destroying the competition to be able to recently gain a return on that investment. One could either write off that previous spending or calculate it into the totality of "Uber". I don't know how Silicon Valley economics works but, presumably, a lot of that previous spending is now in the form of debt which must be serviced out of the current profits. Not that I'm stating that taking on debt is wrong or anything.

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7. jefftk ◴[12 Apr 25 19:36 UTC] No.43667327{5}[source]▶
To the extent that their past spending was debt, interest on that debt that should already be accounted for in calculating their net income.

But the way it usually works for Silicon Valley companies and other startups is that instead of taking on debt they raise money through selling equity. This is money that doesn't have to be paid back, but it means investors own a large portion of this now-profitable company.