Their big risk there as I see it is that the market for "I need an AI" is much much smaller than they thought it would be. People don't generally need or want to pay for "AI", they want to pay for solutions to specific problems.

This means that in a world where AWS/Azure/GCP all compete in the compute and the models themselves are commodities, AI isn't a product, it's a feature of every product. In that world, what is OpenAI doing besides being an unnecessary middleman to Azure?

The ones at the forefront of the "I need an AI" hype are selling agents, or tools that integrate in your email workflow, or some other tool with AI in the name. OpenAI is selling the shovels, the backend API those services are using. AWS/Azure/GCP are selling factory space and are providing blue-prints for shovels. Which is compelling at scale, but if you are busy selling AI tools to people who don't know better it's faster to just use an API to whatever OpenAI offering is SOTA or close to SOTA.

I'd agree there isn't much money in it. OpenAI should probably milk the revenue they get now and make hay while the sun is shining. But their apparent strategy is to bet it all on finding another breakthrough similar to the switch from text completion to a chat interface

Yeah, the problem with selling shovels where shovels=APIs is that APIs cost almost nothing to replicate and are not copyrightable. Tools like Ollama and LiteLLM already offer APIs that are drop-in replacements for OpenAI.

OpenAI isn't losing yet because their models are still marginally better and they have a lot of inertia, but their API isn't going to save them.

> But their apparent strategy is to bet it all on finding another breakthrough similar to the switch from text completion to a chat interface

I'm still convinced that their strategy is to find an exit ASAP and let Altman cash out. He's playing up AGI because it's the only possible way that "AI" becomes a product in its own right so investors need to hear that that's the goal, but I think he knows full well it's not in reach and he can only keep the con going so long. An exit is the most profitable way out for him.

They are the useful idiots that attracted the funding to take the risks and make the technology emerge but didn't have the right marketing and political power. They will disappear as fast as they appeared. It is a common tale in technologies, a lot of companies who invented and/or developed something and did all the hard work just couldn't compete when it got comoditized.

OpenAI has infrastructure and a product around serving to people plus they have SOTA models. Joe blow can’t just take a Qwen or whatever and start making money at scale