OpenAI could still have a significant moat. ChatGPT occupies most consumers’ minds when they think about AI and has become a household name. Google won because search became a habit-forming product people grew accustomed to using. Bing was once effectively indistinguishable from Google Search, yet still failed to achieve mass adoption because users had already become accustomed to “Googling” things. The same could be said for people "ChatGPT-ing" things. If OpenAI and Anthropic are smart, they will maintain similar pricing rather than aggressively undercutting each other, allowing the market to resemble Home Depot and Lowe’s, or cloud computing, where AWS, Google Cloud, and Azure coexist as highly profitable competitors. Unfortunately, I doubt OpenAI or Anthropic will pursue this strategy, as both companies appear to be acting as though the race to AGI is winner-take-all even if the market may ultimately support several highly profitable competitors.

Google also spent heavily setting up deals with other platform owners, invested in Chrome and Android to establish Google search as the default option which most users accepted. If integrations of good enough AI features are made within existing platforms most users will probably accept using those and not think too much about whose model is powering it.

Difference is that it was free to google/bing search. Ai prompting costs money.

If I run out of tokens on ChatGPT of course I will try Claude. I never ran out of Google searches so no reason to try Bing

> OpenAI could still have a significant moat. ChatGPT occupies most consumers’ minds when they think about AI and has become a household name.

ChatGPT is AI for the average non-techie the world over, but the average non-techie isn't eager to pay for it. The more progress that's made, the less incentive to pay - most people are happy with the total garbage spewed by google AI overview. They'd be happy with google's 30b MoE gemma, whose performance will likely be squeezed down to something that can run on a phone in 2-3 years. Why would they pay $20 a month?

It's why OpenAI is pushing a variety of things such as ads and offer a more polished ui/ux than the competition, I think. The models are already good enough for people who just want to know how much sugar to add to their cake or when's the next basketball match their team plays - it's OpenAI's game to lose those people, by annoying UX and whatnot. If they can make a few bucks off of every one of their non-paying users it'll stretch their runway immensely. Those users will never go to Antrophic or some cheap Chinese model, but they might defect to Google because a popup on Android / in Chrome told them to.

Mass adoption isn’t where the money is, though. It doesn’t matter if ChatGPT has 1 billion users if they won’t pay for it.

> If OpenAI and Anthropic are smart, they will maintain similar pricing rather than aggressively undercutting each other, allowing the market to resemble Home Depot and Lowe’s, or cloud computing, where AWS, Google Cloud, and Azure coexist as highly profitable competitors.

Wouldn't that just be price fixing? If they arrive at their prices independently and they all happen to be similar, fine. But if they're all "smart" and coordinate so none of them undercuts the other, that's probably illegal.

Never in my life have I bought any of the household names when it comes to household equipments. Of course, I use the household names’ names when I speak about wipes, washing powder, glue, etc., but never ever would I pay the 2x to 5x premium. Same will be true for most people with regard to “intelligence”, as long as it’s suffices their needs. Thats the crucial part. Cloud computing, on the other hand, has a massive lock-in. But more importantly, their ideosyncratic ways of doing things leads to tribalism. It’s so much harder to move running processes from one provider to another without interruption than just changing an API key or the URL for your chatbot.

Their current strategy is "make the product affordable in tiny little bursts here and there." That is not a great way to build a moat.

That's just the first mover moat, OP was worried about intelligence itself being monopolized.