Google does have a sort of temporary moat. They have a much better hardware supply line story than anyone else and the revenue to maintain that edge indefinitely.
This is the thing - Google is a real company with well established business, money of their own, hardware, server farms, etc. ChatGPT and Anthropic have none of that in the same way google does. They have an incentive to lie and 'fake it till you make it' so they can get out of the 'risk zone' of collapsing back in on themselves. Google can throw money at Gemini all day.
That may be true for OpenAI, less so for Antropic - which has much better margins. Both of these companies CEOs have come in public saying the same.
No doubt as of currently Google has a better business. But the same argument could have been said about Instagram or Whatsapp before Facebook (now Meta) acquired them.
> You know what's also really hard in a vacuum? Dissipating heat
Correct. The economics of space-based DCs comes down to permitting delays versus radiator mass.
At ISS-weight radiators (12 to 15 W/kg (EDIT: kg/kW)), you need almost decade-long delays on the ground (or 10+ percent interest rates) to make lifting worthwhile. Get down to current state-of-the-art in the 5 to 10 W/kg (EDIT: kg/kW) range, however, and you only need permiting delays of 2 to 3 years.
If there is a game-changing start-up waiting to be built, it's in someone commercialising a better vacuum-rated radiator.
I really couldn't have been more obscure, could I? :P
In 1932, "the first oil field in the Persian Gulf outside of Iran" was discovered in Bahrain [1]. (The same year Saudi Arabia announced unification [2].)
In the end, Saudi Arabia had larger reserves and wound up geopolitically dominating its first-moving rival. In commodities, the game tends to be scale in part through land grabbing. Less who got where first.
To close the analogy, if AI does wind up commoditised, the layers at which that commodity is held are probably between power and compute [3]. So if AI commoditises (commodifies?), Google selling computer (and indirectly power) to Anthropic and OpenAI is the smarter play than trying to advantage Gemini. (If AI doesn't commoditise, the opposite may be true–Google is supercharging a competitor.)
I should say it’s “mostly” a myth, there are some fleeting competitive advantages to first mover but a lot of them don’t apply well to tech companies and there isn’t strong historical evidence supporting it.
Why? Being a first mover only counts for something if it can yield exclusivity that is durable.. you should know this being a VC and all. Real options - hello?
If you want to benefit massively off being a first mover, you better do the work in figuring it out how you are going to acquire exclusivity that lasts long enough that keeps most firms out.
Running AI at a loss long enough to kill the competition would run afoul of antitrust laws. Even more so since they’re bundling their AI products with their search monopoly.
Although I doubt this will stop them if they think it’s advantageous…
I thought that these type of antitrust laws are in no way enforced anymore in the tech industry. And that it's been that way for decades. I mean the sheer existence of Google shows that right? What about Maps, Mail, Books... basically everything apart from Search? Why would an AI Mode as one category of Search results be any different? They're not actively promoting Gemini in those search results. They're simply augmenting it with this new tool that exists now.
As long it further's American interests globally - monopoly is fine. Other countries need to take notice and start picking winners nationally in order to compete with the large American big tech firms.
Eh, I think this is actually not a specifically American thing. More of a neo-liberal mindset. Competition may be good in the long term. But a monopoly now may mean more money in your pocket now. The tech giants definitely give the US some geo-political power in some cases but in general the US would be better off with more competition.
ed: @er2d, can't reply to your comment for some reason, so doing it here:
I don't agree. In theory a monopoly decreases the necessity for R&D. Of course this becomes more complex if the R&D is funded or steered by the state. But look at the current state of LLMs. There is fierce competition between 3 US companies. But geopolitically it's the same as if there would be one monopoly. The US being the clear technological leader in an industry is not dependent on that industry being a domestic monopoly.
And for the Europe comment:
Also don't agree. Look at Boeing & Airbus. Both are companies where the US & EU have decided that they need to ensure the existence of a domestic airplane manufacturer. So in these cases they support these companies (often in violation of international trade laws). But it has nothing to do with monopolies. If a state decides to support a company to ensure its existence, a monopoly is the logical consequence and not the aim. Because if that industry would be profitable it wouldn't need to be supported in the first place.
But all these tech companies are not in industries that would move off-shore or stop existing because they're not profitable enough, so it's an entirely different setting.
You’re wrong actually I suggest you read a book on industrial organisation and why monopoly is a more efficient market structure in relation to incentives for R&D.
Why do people comment on stuff they barely have an understanding of? Comical. People like you create noise.
