Uber/Lyft takeover had little to do with price (though, yes, they were cheaper) and everything to do with reliability and overall quality of service. Even though ride sharing industry lost money in subsidy arms race and side bets it was fundamentally sound in major metros since early on (similar to how Amazon was fundamentally sound from early on, despite not recognizing profit for a long time). Popular "analyses" kept equating Uber/Lyft with firms losing money on every sale with no path to fix it but the demand was always there as riders had already left taxis and transit on reliability and convenience grounds.

They aim to undercut labor.

For now, businesses are getting addicted to cheap tokens. As the screws get turned, business will debate whether they should spend budget on humans or tokens. What's further devastating is that humans are also becoming addicted to cheap tokens. Much human output is nowadays a token slopfest. People are becoming dumber too. So the real business question will be spending budget on token monkeys or tokens.

People use AI because it is cheaper than paying humans to think. Soon you won’t really be able to find human thinkers.

Uber's situation is exactly the same. OpenAI is offering inference for a bunch of industries at prices that make it more competitive than hiring humans to do the same work.

If the break-even price to actually provide the service wasn't actually economic compared to humans, would there be nearly as much of a market? That's the real question. OpenAI is basically betting that they can live long enough that AI systems get built around them, which creates enough of a lock-in that they still have customers when prices increase by a lot.

My family and I have gone back to using car services for rides to the airport b/c "Uber XL" seems to include a WIDE variety of vehicles in terms of size and cleanliness.

A car service is about the same cost, the car looks brand new and clean and the driver is helpful.

You still can get taxis, at least in Australia. And they hound you at the front of the airport.

They just consistently cost more and have worse service even after uber increased prices.

The uber situation was even more insidious than that. It wasn't like college students were calling cabs to go to bars in 2013. Uber created a market. It was essentially a mind virus. Gee now I can go to this place all for $7. Chum the water, establish the new pattern of living that people won't ever back away from, then twist the knife and raise prices knowing they won't revert back to whatever Old Way now long forgotten or not even engaged with by the upcoming generation.

Many such cases.

But there are competitors. The race is to corner the market.

Amazon structured their entire operation to look like this but as you indicated, could have switched to a porfit-making, dividen-paying company more than a decade ago, that just wasn't their strategy. The same can not be said for OpenAI. Even if they slashed their R&D, their marketing and sales costs are extremely high for a tech company. On paper they look more like a utility and those are not worth double-digit multiples; they compete with t-bills and GICs

I’m not sure Sam is actually well-regarded around the YC block? Didn’t he lie about being the chairman of the board of YC? That’s what it says on his Wikipedia page.

Let’s not forget the whole fiasco where he was already almost fired from OpenAI.

His business track record is basically one failed location-based social media company.

I think it’s starting to become clear that OpenAI is going to be the first casualty of the AI race, and I think these undisciplined operations are a big part of the reason.

A major tell is how Apple Intelligence is seemingly steering away from OpenAI and is embracing Google instead.

Anthropic has the most useful B2B tooling and found their product niche, and they have the model leads in that niche.

xAI gets financially shielded by being a part of a gigantic financial instrument and the Elon Musk reality distortion field. Cursor has a similar product market fit as Anthropic and gets to consolidate with xAI.

Google and Microsoft get to use AI within their highly profitable ecosystems.

Apple gets to mostly sit out but act as one of the biggest toll booths for everyone else.

You've seen Sam Altman's interviews, yet you still think him a competent man? I think he's rather the embodiment of the death of meritocracy as an idea.

More importanly they have moat

>The projections, which were reviewed by The Wall Street Journal

No, they're just projections of profitability

Or Claude is better at getting people to move to more expensive membership tiers. From reading here, it seems like Claude still has a lot of users. If Claude has lower limits for their $20 plan, it stands to reason that people are paying for more expensive plans to get similar levels of usage. This assumes they aren’t reducing demand through the throttling, which is a big assumption.

I’d love to know what Anthropic’s comparable numbers look like.

In other words, Codex likely has a lower demand:capacity ratio compared to Claude. Which can mean either OpenAI did a better job at building out capacity, or the demand for Claude outstripped Anthropic's projections. Or both.

GPT 5.5 regularly got things correct where opus 4.8 got things wrong. Just today, it was launching an executable and putting the environments after the launch. It should have been

Env1=val env2=val ./executable ....

But instead it did

./executable

Then set the envvars. Chatgpt 5.5 made no such mistake.

Amazon and Uber are other examples of businesses that looked like total basket cases for years. I remember reading, and at the time being persuaded by, articles arguing that Uber was doomed because there are no real economies of scale in livery services, and so the minute they began to achieve a dominant position and hike prices, countless competitors would easily swoop in and undercut them. Didn't turn out that way.

Profits are irreducibly profitable, regardless.

I'd agree for OpenAI and Anthropic, but Google is a different story, because they're renting TPUs to both OpenAI and Anthropic, and presumably making reasonable margins on them given how supply constrained the entire industry is.

When are these GPUs going to be available on the second hand market?