OpenAI is looking at a Log in with ChatGPT offering.
- A crucial feature: businesses that use it can subsidize inference for users.
- This is a classic aggregator play to lock in an ecosystem based on an early advantage.[hp]
- The subsidy makes it increasingly impossible for other providers to compete.
- The bet is that by having predatory pricing (aka "dumping") they can force other businesses out and then corner the market.
- They're already doing this by their intense subsidy of inference on ChatGPT.
- OpenAI is betting that their overall story and momentum is strong enough that they'll be able to continue raising capital when others can't.
- But a stable equilibrium to me seems to be Anthropic and Google staying in the race indefinitely.
- They have the capital and backing to stay in the game no matter what.
- And of course, there's the possibility of open models, especially out of China, catching up.
- That is a very different end state equilibrium.
- In that world, there's not a duopoly but a triopoly.
- There's always one shorter leg of the stool who is willing to do things that the stronger players wouldn't, e.g. keep frontier model access available via API.