Mark Cuban: OpenAI Will Never Return the $1T It's Investing [video]

https://www.youtube.com/watch?v=oEVHNvE_jDw

by operatingthetan • 3 months ago

39 47 3 months ago

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jqpabc1232• 3 months ago

In my experience, Cuban is generally pretty good at stripping away the stupidity and BS.

aurareturn11• 3 months ago

Sometimes he is the stupidity and BS.

orwin2• 3 months ago

Yeah, he falls in the categories "is able to underline the issues" + "Explain why you are beeing bullshitted", but also in the "Snakeoil salesman", and that made him hard to trust. Basically i listen to him to talk basketball and that's basically it.

consumer451• 3 months ago

Genuine question: could you please share some notable examples?

rwmj2• 3 months ago

He's stating the obvious, but perhaps it needed to be said.

aurareturn11• 3 months ago

He's right, there is a race. It's going to be a natural monopoly or duopoly because the cost to train the next SOTA model is always increasing. I can see that there are only 3 companies competing for the duopoly or monopoly realistically: OpenAI, Anthropic, and Google. Everyone else has fallen behind. The flywheel of generate more revenue, get more data, get more compute train a better model might already be too great to overcome for anyone else.

I don't understand why he thinks OpenAI can't be one of the duopolies or become the monopoly. OpenAI's models are always the first or second best overall - usually the first. They are also leading in the consumer market by a wide margin. They also made a strategic decision that is paying off which was committing to more compute early on while Anthropic is hammered by the lack of compute.

PS. They've raised ~$200b total, not $1 trillion.

jqpabc1232• 3 months ago

https://www.reuters.com/business/openai-makes-five-year-plan...

aurareturn11• 3 months ago

This is a 5 year pledge - likely based on hitting revenue goals and not just using investor money.

libertine2• 3 months ago

Out of those 3, only Google seems to be in the position to reach that kind of profit levels due to distribution and advertising.

Claude is kicking ass in the niche of coding and processes.

1 trillion is a lot of money for something that's not differentiated and protected in a massive market.

Does it look like OpenAI has that in place?

Cuban thinks they don't, and won't.

aurareturn11• 3 months ago

I wrote about how I think OpenAI is going to kill it in advertisements here: https://news.ycombinator.com/item?id=46087109

Claude is kicking ass in coding but it seems like Codex is catching up fast. Claude Code's PR has taken a hit recently due to the lack of compute forcing Anthropic to dumb down the models. Codex has been gaining momentum.

Chip manufacturing aren't really differentiated either - it didn't stop TSMC from becoming the monopoly for high end chip nodes, capturing 90%+ of the advanced chip market. The reason they have is because Rock's Law makes it too expensive to build the next node unless you've generated enough revenue from the current node. I don't see why it isn't the same for SOTA models.

atwrk• 3 months ago

How can this become a monopoly/duopoly? There is no moat, the Chinese providers will continue to hunt the market leader at 10% of the price, there is no network effect (OpenAI's Sora was a play in that direction and failed).

I'm constantly amazed how this AGI/monopoly narrative can be kept up so long in the West, it just doesn't make sense (unless the state creates said monopoly by forbidding competition).

preommr• 3 months ago

I can see that there are only 3 companies competing for the duopoly or monopoly realistically: OpenAI, Anthropic, and Google.

I could see people saying this in 2022, but now? No chance.

Chinese models keep demonstrating that SOTA can be approximated for a fraction of the cost. The innovation out of these companies keep showing diminishing returns, with a greater emphasis on the tooling and application layer. Having the right workflow with the right data is more important than having the right model. We could freeze AI now, and I'd bet good money that the current state of things is good enough to - not be first - but competitive for the next few years.

Even if we do end up with a oligopoly situaiton, it'll be less like Microsoft in the 90s and more like Microsoft now where they just give out windows for free, have support for WSL and the focus is on cloud services rather than their OS.

jitler• 3 months ago

Chinese models keep demonstrating that SOTA can be approximated for a fraction of the cost.

Wow, sounds like a threat to nation security. Those Silicon Valley companies shills start donating to select donation campaigns with hope to ban Chinese LLM models.

Can you imagine? Your children being exposed to the propaganda that these LLMs will be inevitably tainted to spew?

orwin2• 3 months ago

Yeah, no, i disagree. Frontier models were almost untouchable 6 month ago, but now i can get 90% of Opus 4.5 with any chineese model, or even with Mistral. The only thing i'm missing is the chain of thought that help me understand the "how" and "why" when AI fails at its task. For the "general purpose" AI, it's even worse, any free model i can run on my Intel Arc (yes, sorry, it was discounted an very cheap) i get like 80% of a frontier model, at virtually no cost, and i suppose Deepseek/Mistral are like 95% there.

dgellow2• 3 months ago

I think the performance of models is only one aspect. You have to take in account the cash flow, how much spending commitment the different actors have, debt, etc. OpenAI has taken some very risky commitments, of they don’t get the revenue to cover their expenses in the next few years their situation will be pretty bad

aurareturn11• 3 months ago

I wouldn't worry about their commitments. Their growth is insane if it's similar to Anthropic's revenue numbers. Their IPO might also raise a few hundred billion.

JumpCrisscross10• 3 months ago

can see that there are only 3 companies competing for the duopoly or monopoly realistically: OpenAI, Anthropic, and Google

Amazon and Microsoft have a seat at the table by virtue of their cloud businesses.

Jare• 3 months ago

Fewer people applying for patents, because the minute you apply for the patent, it's available to everybody, which means every model can train on it

We know LLM companies have, for lack of a better word, "sidestepped" the copyright on millions of works with their "transformative fair use" arguments. Are LLMs also a way to sidestep patents?

pjc50• 3 months ago

LLMs are accelerants. They enable people to do patent and copyright infringement at a much larger scale. As we know from previous examples, if you break the law enough as a company eventually they have to let you keep doing it.

newsy-combi• 3 months ago

Not just as a company...

dgellow2• 3 months ago

I don’t see how? You can train on something pending patent, but what are the benefits? If it gets patented you open yourself to get sued, I don’t see how AI works around that, the idea itself is still patented? I think I’m missing something for the argument to make sense. Or is the idea that if too many people use your patented idea you won’t be able to enforce it? That sounds risky to me

ozlikethewizard• 3 months ago

Because no AI company has been sued yet. Without more specific legislation there is no reason for AI trainers to not pilfer everything.

6stringmerc• 3 months ago

What a funny perspective - they didn’t side-step copyright, they blatantly infringed without financial consequence. The interesting “upside” is none of the generated works are protected by copyright. So it’s a bizarre conundrum which goes to show the complete disconnection between the concepts of the original intent - to protect authors and creators - with the warped capitalist mechanics of “rights holders” like Disney buying political influence for regulatory market capture.

Sugar coating the discussion is for children and dishonest ethical rationalization, in my view.

feverzsj• 3 months ago

Why should they return your money if it's a Ponzi scheme?

grunder_advice• 3 months ago

IMHO, Google, Meta and Microsoft are best positioned to be the last ones standing because they have alternative cashflows. The danger with OpenAI and Anthropic is that they might end up being the Sun Microsystems of the AI era. It will only takes them a couple of misteps along the wrong technology path for them to be out of the game.

SilverBirch• 3 months ago

I think it's unquestionably right that these companies can't all win, and those that don't win are going to burn a lot of money for nothing. However there's kind of two directions this can go: Compute gets cheaper, in which case there's no monopoly it'll be easy for many companies to make good models and there won't be pricing power on serving a good model. The other case is compute gets cheaper but we keep using more and more of it, so it does likely become winner take all. The first scenario is good for the economy but likely bad for the returns on these AI stocks. The second is maybe bad for the economy and maybe not even good for the winner.

Take Google or Meta: Today Google makes a shit-tonne of money and to make that money they need to run some servers. The servers are extremely cheap relatively to the revenue they make running the business. This makes them a very attractive stock - the core of why SAAS looks great. Now let's assume the monopoly path. Google can win. I think they likely will win. But now they're going to spending... how many hundreds of billions constantly training new models? The cost of providing the service suddenly isn't small relative revenue they're getting. So even for them it looks awful for their valuation.

JumpCrisscross10• 3 months ago

these companies

I think the conclusion the market is rapidly and correctly reaching is we aren’t in an AI bubble, we’re in an OpenAI bubble.

Google, Amazon and Anthropic look likely to see ROI on their capital investments because they’ve made them halfway reluctantly. Microsoft is up in the air. Not sure what Meta is doing. And with the benefit of hindsight, OpenAI used capex as a marketing strategy with investors (while Sam Altman materially lied about his compensation and somehow looped Paul Graham and Jessica Livingston, founder of The Information, into his racket).

aurareturn11• 3 months ago

Why would you say we're in an OpenAI bubble if Anthropic is valued more than OpenAI now?

Yizahi• 3 months ago

OpenAI maybe won't, but someone else will. Maybe US government, maybe some fund etc. Too big to fail.

Mark Cuban: OpenAI Will Never Return the $1T It's Investing [video]

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