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Comment by dcow | Hacker News Reader

I don’t think “AI” as a market is “winner-takes-anything”. Seriously. AI is not a product, it’s a tool for building other products. The winners will be other businesses that use AI tooling to make better products. Does OpenAI really make sense as a chatbot company?

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I agree the market for 10% better AI isn’t that great but the cost to get there is. An 80% as good model at 10% or even 5% the cost will win every time in the current environment. Most businesses don’t even have a clear use case for AI they just use it because the competition is and there is a FOMO effect

> Most businesses don’t even have a clear use case for AI they just use it because the competition is and there is a FOMO effect

I consult in this space and 80-90% of what I see is chat bots and RAG.

That’s exactly what I’d expect. Honestly Ai chat bots seems unnecessarily risky because you never really know what they might say on your behalf.

> Does OpenAI really make sense as a chatbot company?

If the chat bot remains useful and can execute on instructions, yes.

If we see a plateau in integrations or abilities, it’ll stagnate.

Very few are successful in this position. Zapier comes to mind, but it seems like a tiring business model to me.

AI is a product when you slap an API on top and host it for other businesses to figure out a use case.

In a gold rush, the folks that sell pickaxes make a reliable living.

> In a gold rush, the folks that sell pickaxes make a reliable living.

Not necessarily. Even the original gold rush pickaxe guy Sam Brannan went broke. https://en.wikipedia.org/wiki/Samuel_Brannan

Sam of the current gold rush is selling pickaxes at a loss, telling the investors they'll make it up in volume.

Nvidia is selling GPUs at a loss? TSMC is going broke?

I'm pretty sure they are the pickaxe manufactures in this case.

This is where Google thrives, it makes it's own TPUs that run the models.

Clouds are the actual pickaxe manufacturers. Google has a cloud.

According to the linked Wikipedia article, he did not go broke from the gold rush. He went broke because he invested the pickaxe windfall in land, and when his wife divorced him, the judge ruled he had to pay her 50%, but since he was 100% in land he had to sell it. (The article is not clear why he couldn't deed her 50% of it, or only sell 50%. Maybe it happened during a bad market, he had a deadline, etc.)

So maybe if the AI pickaxe sellers get divorced it could lead to poor financial results, but I'm not sure his story is applicable otherwise.

I don't think there is anybody that is making significant amount of money by selling tokens right now.

Nvidia is selling the shovels.

Basically every tech company likes to say they are selling pickaxes, but basically no VC funded company matches that model. To actually come out ahead selling pickaxes you had to pocket a profit on each one you sold.

If you sell your pickaxes at a loss to gain market share, or pour all of your revenue into rapid pickaxe store expansion, you’re going to be just as broke as prospectors when the boom goes bust.

There are two perspectives on this. What you said is definitely a good one if you're a business planning to add AI to whatever you're selling. But personally, as a user, I want the opposite to happen - I want AI to be the product that takes all the current products and turns them into tools it can use.

I agree, I want a more intelligent voice assistant similar to Siri as a product, and all my apps to be add-ons the voice assistant could integrate with.

> AI is not a product, it’s a tool for building other products.

Its products like this (Wells Fargo): https://www.youtube.com/watch?v=Akmga7X9zyg

Great Wells Fargo has an "agent" ... and every one else is talking about how to make their products available for agent based AI.

People don't want 47 different agents to talk to, then want a single end point, they want a "personal assistant" in digital form, a virtual concierge...

And we can't have this, because the open web has been dead for more than a decade.

Why can't we have personal assistants because the open web has been dead?

I'll be happy with a personal assistant with access to my paid APIs.

Seriously, humans are not a product. You hire them for building products.

Is Amazon a product or a place to sell other products? Does that make Amazon not a winner?

If there were 2 other Amazons all with similar products and the same ease of shipping would you care where you purchased? Amazon is simply the best UX for online ordering. If anything else matched it I’d shop platform agnostic.

> The winners will be other businesses that use AI tooling to make better products.

agree with you on this.

you already see that playing out with Meta and a LOT of companies in China.

the subscription is a product

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