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Don't think it matters in the long run to be honest. The models have no moat, they are becoming a commodity.

Besides that, Google is in a pretty good position, they're not bleeding money on AI like Anthropic/OpenAI, and they own product verticals where they can integrate it. Plus they have a mature ads-model which is what might actually drive a bit of revenue for LLMs.

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I think the 'models have no moat' thing is overblown. Only like 3-4 companies in the entire world have cutting edge models, that means there is some kind of moat...

I think when you follow this stuff every day it's easy to lose perspective of the rate of change and these leads seem more profound than they really are when you zoom out a bit.

I'm no super-insider, I only hear industry scuttlebutt like everyone else, but I have about a 95% confidence that the last 18 months has just been about more and better, without any kind of real leap or breakthrough. More hardware, more data, better technique. Well, technique diffuses as people change companies, hardware can be built, and data can be gathered (or stolen!).

From my admittedly outsider perspective, the only years-long moat there is who has the most hardware. If you have the hardware, you can give away the compute to get the data (hello, subsidized subscriptions!). Technique can simply be hired. The only durable, multi-year advantage is the hardware.

So is that a moat? Sure, but it doesn't have a whole lot to do with the leading model companies of the moment. ASML is the real moat, and so it's ASML China is besieging, correctly (IMO) identifying that everything else can be caught up easily enough.

Check back in a few years...

money. but it eventually runs out

Grok and Meta. Both have money and compute, both have shit models. Also Google. Has money, models not so good.

A little IPO is the solution.

Don't we all want to (automatically) and passively invest in a company losing billions of dollars ?

At least we can diversify our portfolio from SpaceX.

Pre-Quote: "We are all going to lose, hundreds of billions"

Money.

That's their moat.

Maybe also stolen copyrighted content that cannot be found anywhere else now, so they are the only ones who can train on it.

Meta has tons of that, but no frontier contender. Clearly there’s _something_ more to the equation than money

I feel like the models have no moat paradigm died when a single model expanded past the memory of single GPU slices. The moat is hosting the model. Even paying a server host to run a rack of GPUs has immense upstart cost, and then you're still struggling to compete on the add-ons of the things on top of the model (prompts, validation loops, etc). You can only throw so much money at a problem.

Many different companies host the open source models. Where's the moat there?

I mean you got me there. There will be places who do have the means to build up massive GPU servers. There's just a lot more to it and I don't know if we're going to pinpoint an exact catch-all moat.

And they've had some initial success with TPUs which could be a major differentiator in the future.

Yup, and they have the Apple partnership for now as well. Much better position generally than OpenAI in my opinion.

yeah, sure, look at anthropic revenue, what is it if not the moat? you can argue for how long but for them good model = the fastest growing company ever.

Revenue is not a metric of success at all.

Grabbing market-share if you have investors that are ready to burn cash infinetely. Find a hot niche, buy a banana 1 USD, sell it for 0.10 USD.

Example: Cursor, they became popular because they were selling ChatGPT unlimited for 20 USD / month.

When they launched, just a reskinned VS Code, "fastest growing AI company"

No coincidence they were bought by SpaceX, who wants to consolidate revenue even if non-sense as long it helps other investors to exit. It shows rapid growth.

Profit is the real moat.

One example: Nvidia. Proprietary tooling, proprietary IP, proprietary hardware, no alternative, expensive.

Revenue is moat. Ask Amazon. Or Alibaba. Or Temu.

You don't know what Cursor's game plan was. Maybe acquisition was their plan.

Buying at $1 and selling for $0.1 is still viable as long as they have money in the bank, until they achieve their goals. Most startups start out that way. Even giving away their services for free.

Obviously there will be failures. Doesn't mean they have no moat. Can you say a business with 100 customers and $1000 debt is less viable than one with a single customer and no debt?

> models have no moat

Possibly true. Any smart innovations developed by one organization will be smuggled into others.

Training, inferring, and data collection, infrastructures are definitely moats. High-volume usage feedback is also hard to come by for new entrants.

And Google has all of those. Custom silicon, more data than anyone else and probably the most comprehensive data collection system, and phones in the hands of 73% of the global smartphone using population to push gemini into to get high volume usage feedback and even more telemetry and data.

I don't think you're honestly accounting for the engineering behind the progress models are making. If it was just a matter of compute on hand and iterating, Meta would be neck and neck with Ant, OAI, and Google, but clearly you've gotta have more.

Noam has a deep expertise in these systems at every level, both algorithmically and at production scale, and knows how to leverage things at different levels.

It's not like Google won't have anyone else that can do what he does, but at the same time, it's an implicit criticism of Google's culture, operations, development, and overall AI program. Shazeer is well past the point where the paycheck is the deciding factor, although I'm certain he is very well paid. Having the freedom to innovate and build free from the corporate fuckery of Google and Facebook is probably more valuable than the pay raise he got with the move, and OAI has the advantage of not having to cope with decades of corporate cruft and inertia. They'll get there - all corporations do - but they're relatively young enough to still be nimble.

> Noam has a deep expertise in these systems at every level

As do thousands of people say this point. You think the head of deepseek doesn't?

I honestly don't think that matters for multiple reasons:

1. There are already multiple "sota" models on the market that compete with only marginal gains between them (OpenAI, Anthropic, Google/Gemini) and some that are catching up (DeepSeek, Qwen,..).

2. The fact that something is a hard engineering problem does not mean it's generating revenue. So while what you said is true, deep expertise is required to push the industry forward, I don't think that is going to matter for the bottom line of these companies. Hence why I think the models don't give a company any 'moat' in a capitalist economy.