not if your product is selling two dollars for one dollar and as soon as you'll start to charge more I'll switch to one of your twenty competitors

profit isn't a function of having a killer product, it's a function of having no competition

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aurareturn 6 hours ago | parent | next [-]

And why do you think twenty competitors can stay competitive for years to come?

Industries always consolidate and winners emerge. SOTA LLMs look like a natural monopoly or duopoly to me because the cost to train the next model keeps going up such that it won't make sense for 20 competitors to compete at the very high end.

TSMC is a perfect example of this. Fab costs double every 4 years (Rock’s Law). It's almost impossible to compete against TSMC because no one has the customer base to generate enough revenue to build the next generation of fabs - except those who are propped up by governments such as Intel and Rapidus. Samsung is basically the SK government.

I don’t see how companies can catch OpenAI or Anthropic without the strong revenue growth.

	▲	outside1234 5 hours ago \| parent \| next [-]
		Google has completely caught OpenAI. Anthropic has a better coding model, but I'm sure Google is working on that too.
	▲	komali2 2 hours ago \| parent \| prev \| next [-]
		The barrier to replicating TSMC isn't just cost, it's supply chain, geopolitics, and talent. Only one company on Earth can make the UV lithography machines TSMC buys for their highest end fabs, and they're not selling to anyone else. The PRC tried to brute force this supply chain backed by the full might of the Party's blank check, all red tape cut, literally the best possible duplication scenario, and they failed.
	▲	Barrin92 4 hours ago \| parent \| prev [-]
		>Industries always consolidate and winners emerge. no, most industries just sell boring generic products, a few industries favor monopolists. Semiconductors are one of them but LLMs are also as far removed from that business as is physically possible. TSMC makes the most complicated machines humans have ever built, a LLM requires a few dozen nerds, a power plant, a few thousand lines of python and chips. That's why if you're Elon Musk you could buy all of the above and train yourself an LLM in a month. LLMs are comically simple pieces of software, they're just big. But anyone with a billion dollars can have one, they're all going to be commoditized and free in due time, like search. Copying a lithography machine is difficult, copying software is easy. that's why Google burrowed itself into email, and browsers, and your phone's OS. Problem for openai is they don't have any of that, there's already half a dozen companies that, for 99% of people, do what they do.

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ds2df 6 hours ago | parent | prev [-]

no competition is a bit extreme. Limited competition yes due to competitive advantages.