Chamath says open AI models are "commoditize your complement." Agree?
Chamath's argument (https://research.socialcapital.com/p/open-vs-closed): companies give away the thing they dont sell for free, so the thing they do sell is worth more.
Meta makes money though ads, Google and Microsoft from cloud.
The losers are companies whose business is selling access to closed models. But still companies are paying more and mroe for closed models anyway! Does this theory hold up?
At present, the models are being replaced with better ones on very short cycles. While open models exist and are even useful, they're generally a few months behind the closed models in performance.
If you are (and most of us are) still encountering cases where the closed models are not good enough, the open models are (mostly) even worse, so they're not competition.
I anticipate the money will run out, and when it does the open models catch up (that appears to be cheaper than maintaining a leading position); at that point, I expect us to face the "commoditise your complement" situation.
Yeah, and also the capabilities are starting to plateau. So I feel like the market will be flooded with a 100 Anthropic like providers giving out models.
The true cost/token is something that I am still wondering about. The most expensive chinese model costs $3 per input to run. And we still have massive markup from the american closed source model companies.
I agree that money will run out. But what will policy do?
I don't yet see open models exerting significant pressure on the closed API market. Access to the most significant models is still quite expensive, and demand for them appears to remain high.
Google about as much money from ads as meta does, chamath is dumb.
the argument is that model becomes something similar to social media, where the commoditiy was never the product.