Open Source AI’s Chokepoint: Dependence on OPEX in an Own Nothing Economy

Anthropic and OpenAI will both be gone in < 3-5 years

OpenAI and Anthropic are the nerds no one noticed freshman year who, over the summer, turned pretty; and it can be every bit as soapy and melodramatic as the popular series.

The problem IMHO both peaked too early to maintain a sustainable arc. Economics of scale, for the time being, mean they have a seat at the table in partnering with the big girls and boys, AWS, Azure, GCP to optimize HPC and training models.

They are training their replacements. Been there done that.

 Do they know this? Was this the plan all along?

                      Do we all know this?

(SIDEBAR: #Oracle I am sure does, notice how they refused to play the game? Instead owning the board and investing in their own R&D, “Don’t look over here, just racing super yachts and quietly acquiring real estate, snapping up data scientists from IBM and building closed source AI" for years. Check out their earnings. Also note, Oracle also owns Cerner or excuse me, Oracle Health. Can you imagine what they are doing in the field of healthcare and genomics owning full stack soup to nuts the hardware > software> data > widgets!? Mind boggling, they not only own the value, they own the entire chain, everything.) 

Anthropic and OpenAI own, what a few patents; perhaps aside from that, they own nothing. How #GenZ of them. A modern day WeWork. The Uber/Airbnb argument doesn’t work. Uber wasn’t using taxi’s and Airbnb wasn’t using Marriott hotels.

Anthropic and OpenAI followed the hyperscalers Siren’s song of usage based cost efficient compute they now cannot decouple themselves from while those same hyperscalers build better products to replace with deeper pockets and economies of scale owning datacenter assets and supply chain relationships Anthropic and OpenAI simply do not.

Don’t believe me? This visual started as a pet project over the weekend. Lots of work still to be done but it serves as a starting point to visualize who has shored up areas of risk through diversification and partnering and who hasn’t.