dog food is heavy, and a repeat purchase that often requires its own store and brings no joy. Its the ideal thing to get delivered to your house on a schedule.
books are something you choose differently everytime, and the people that like them read recreationally.
Bezos was on another level, launching a successful company(online books) that was effectively just a way to boot strap into an everything store.
In 1999. To ship a book using media mail cost of $1.13 for the first pound and $0.45 for each pound up to 7lbs. It got cheaper per pound above that.
This meant even heavy books were relatively cheap to ship. Way cheaper than random goods.
But the counterpoint still translates here: Amazon did not start with 1000 warehouses (i.e. Anthropic's debt obligations) and _then_ race to build a marketplace that would fill them with everything under the sun. It started lean and mean, and I suspect the Anthropic-killer will do the same.
Setting fire to cash to have the best model that anyone else can also do isn't a business model. They're never going to be able to stop setting fire to cash or they'll fall behind immediately. Their user base will not pay the bills. It's an obviously bad investment.
what I really push back on is the idea that there are magically going to be all sorts of entrants into the space that meaningfully compete with Anthropic or OpenAI in the near or even medium term. for as much as the reddit set continues to put their collective heads in the sand while screaming "there's no moat"... there is a moat, and one so prominent as to be self-evident. not once has an open-source model come even close to genuinely reaching frontier performance for anything other than cost, and cost is by definition the easiest thing to improve on-- just distill bigger model into smaller model: boom, cheaper!
When it comes to AI there simply isn't a moat - Anthropic would be my best guess out of the current entrants due to them trying to construct one via value-adding code assistance tools that might create enough friction to prevent customers from jumping ship but the models themselves are a commodity that depreciates extremely quickly. If you want to retain the frontier premium you need to constantly be improving due to the ease of distillation.
Myspace's peak popularity (in terms of monthly unique pageviews) came in 2007. Yahoo was ahead of Google for several years, though I am struggling to find good data on the specifics there. Your understanding seems to be based in your own personal experience of those sites, which is fine, but I don't think it quite matches the big picture.
Your proposal that there won't be any new entrants is puzzling to me because, in the grand scheme of things, OpenAI and Anthropic ARE new entrants. The entire space is new. It feels like ChatGPT became public eons ago, but it hasn't even been 4 years. Imagine saying in 2008 that no photo-sharing site would ever surpass Flickr - it's been dominant for 4 years! Why would you go to something new when everyone's photos are already on there?
One absolutely enormous advantage new entrants have in the AI space is that they can start on third base. Anthropic had to spend billions and billions of dollars to get to Opus 4.6. A new entrant could distill its way into a model roughly on par with that far more cheaply, and spend its VC cash on things like marketing and price cutting rather than burning it on actually creating a good model. The existing players need to service mountains of debt and are locked into deals for compute based on outdated assumptions about efficiency. I'm not saying it would be EASY for a new entrant to waltz in, especially to the enterprise market. But it's not impossible especially on the consumer side: Meta was essentially a non-factor until Muse came out, and now most people think of Muse when they think of an AI agent (as opposed to Claude, which is just a chatbot in the public imagination, because that's what it was when it became popular).
Yeah, I was with the case bring made, until that point. A very bizarre claim, especially given the questions around safety:
https://www.malwarebytes.com/blog/privacy/2026/10/metas-muse...
The winning business model may be 1 or 2 abstractions removed from "build a really good LLM model", and yet to be revealed in the marketplace.
i do agree that there is a good chance that one of these post- OpenAI/Anthropic competitors probably will get some sort of unanticipated foothold, if only because enough talent will drain out over time. what i push back on is the idea that being 90% as good as frontier models is actually good enough to matter in even the slightest. especially since we know that the "real" internal models are so much further advanced than what we get access to publicly.
i absolutely agree that it isn't impossible-- if the only thing stopping a new entrant is capital (as in: they have the trillion-dollar idea necessary to be competitive) that will absolutely never be a true impediment to a worthy competitor.
It doesn't need to be the best. It just needs to be good enough. I'm not smart enough, but if I was I'd be working on a locally ran interface engine. That's where you charge say 100$ a year. Said engine would allow you to use a large open source model locally to the point where it's good enough to rival Haiku.
If I had to guess someone is working on this
Building the iPhone-platform equivalent of this would be interesting.
I'm far from an expert, but I don't think it's impossible. Future models won't give out vacation ideas, they'll focus on one or two things. This might allow us to get the size down.
Two observations - one, there is some set of tasks where intelligence is already saturated, and sure, that threshold is rising by the month. So, sure, for some tasks you don’t need the best model. But there are other tasks that need models smarter than what we have now - like “make a cure for <disease>” that will yield billions of dollars of value, but likely require quintillions of tokens and higher IQ/token than anything we have now.
As long as we have non-saturated economically valuable tasks there will be incentive to train new and smarter models, and the frontier will always be on racks of GPUs not local distilled versions.
Two, it’s not clear that you can distill all the way down to 32GB even for the current frontier models. IIRC Karpathy has speculated that you can get an AGI into GPT-3 size, if you drop all the memorized facts and keep the reasoning core. But this is highly speculative! The best 32GB models right now are substantially dumber than even the large open-weight models, let alone the frontier closed models.
Perhaps I am missing something, what are you imagining of “a locally ran inference engine” that doesn’t already exist in a DGX workstation, Framework desktop, MacBook, etc?
I think it's important to qualify that while I will very much appreciate such an innovation and I think it'll provide significant value to society... I remain doubtful of the ability for any company to actually capture such an astronomical yield. Either there's enough of an investment required by the company to help get that to market that the yield will be significantly lower or everyone and their brother will just launch competing products two days later. And, as a society, I don't think it's logical for someone writing "Hey Alex, cure cancer" with billions of dollars so I doubt there's going to be much appetite for creating such a moat via legislation.
This gets to the same point of "If ChatGPT can make you a successful million dollar business in a few prompts why is OpenAI sharing it" paradox. It very well may be that AI tools can accomplish the labor that used to be required to create such a business, and I'm sure a few people will land a jackpot and get rich in the transitional phase but if it's so cheap to build it why would someone pay you money for yours instead of just running the same prompting themselves? For most people that's because they lack the knowledge that they can but you'll still have a significant number of instant impersonators.
I agree fully, to be clear o was using that prompt as a shorthand, I don’t think _you_ can type that prompt and get $1B back.
It can’t do this now, obviously. You need a lot of scaffolding and domain expertise to get the most out of these models. (Eg Harvey.)
But eventually, the labs can just run the business themselves.
I’ve long held that as we see models become more capable, they will be less available to the public. It seems pretty obvious that vertical integration on private models (perhaps a per-industry fine-tune, eg a legal model) licensed to subsidiaries will let the labs capture more value.
Why would you publish your model, enable competitors, and enable distillation of your hard-won intelligence? Only antitrust law can prevent this outcome IMO, the business pressure is extremely strong.
Someone much smarter than me would figure this out.
One option would be an alternative bare metal OS which could allocate ram more carefully.
I'm sure with billions upon billions in VC funding a solution could be found.
Imagine if we had some kind of really intelligent AI model that we could pose problems like this to. It's obviously not the kind of thing an open weight model running on your local machine could do, but if we had some kind of really large, closed source model running in the cloud that could solve really difficult problems like this, I wonder if there'd be a market for it...
Regardless, looking back even a year at SOTA local models that fit on a non-absurd system creates a crazy trendline toward the future. And I think model routing is the gap filler that can make/break now vs. Oct 2027
I suspect Anthropic is of this general thinking as well; they've clearly switched from a thoughtful progression toward a natural IPO to "omg sprint for it". Along with the regulatory capture attempts, it's hard to imagine what is breathing down their neck so hard outside of this.
Totally agree local inference of any major scale is a nerd's wet dream short of many stacked improvements in efficiency. But again, auto-routing smooths over the rough edges if you are ok with a little bit of API spend when needed.
they invented mcp, terminal coding agent, context files like claude/agents.md.
I have no real clue whos going to win the model race but they have repeatedly shown that their internal taste is on point, reminds me a lot of early google.