Which is fine in theory, but “expected” based on what?
They haven’t demonstrated any ability to meaningfully improve their models (“meaningfully” meaning "sufficient to actually address the very serious concerns about their practical usability), they haven’t shown any ability to meaningfully capture enterprise sales for their API, and their conversion rate on free users to paid users is abysmal. Their only stated plan to increase revenues is doubling their prices, which given their already terrible user retention doesn’t actually seem like a reliable way to bring revenue up. Jacking up prices only works when your users find you indespensible, and everything OpenAI offers can be found elsewhere for less.
The assumption is that they’ll develop some kind of moat, but there are plenty of other AI models on offer or in development. It would also be useless capturing a market when the companies that would be their customers realize they’re not making money on the AI themselves.
This is exactly the problem. There are plenty of people who will crawl out of the woodwork to tell you how they’ve found a way to make AI “useful”, but very, very few could put their hand on their heart and say that it was “essential” to their workflow or their own happiness and wellbeing in any meaningful way.
Eh all these companies operate as loss leaders until they capitalise the market.
So yeah some small loses here and there to make back far more in the future.
Which is fine in theory, but “expected” based on what?
They haven’t demonstrated any ability to meaningfully improve their models (“meaningfully” meaning "sufficient to actually address the very serious concerns about their practical usability), they haven’t shown any ability to meaningfully capture enterprise sales for their API, and their conversion rate on free users to paid users is abysmal. Their only stated plan to increase revenues is doubling their prices, which given their already terrible user retention doesn’t actually seem like a reliable way to bring revenue up. Jacking up prices only works when your users find you indespensible, and everything OpenAI offers can be found elsewhere for less.
The assumption is that they’ll develop some kind of moat, but there are plenty of other AI models on offer or in development. It would also be useless capturing a market when the companies that would be their customers realize they’re not making money on the AI themselves.
You have to get people hooked on your product, though.
If they and every other AI company just evaporated no one would really be bothered.
You can’t capitalize a market that doesn’t really exist.
This is exactly the problem. There are plenty of people who will crawl out of the woodwork to tell you how they’ve found a way to make AI “useful”, but very, very few could put their hand on their heart and say that it was “essential” to their workflow or their own happiness and wellbeing in any meaningful way.