1vuio0pswjnm7OpenAI's fall from grace as investors race to Anthropic
I don’t know how OpenAI screwed this up. They had the best tech, the largest installed base, the best brand recognition.
And somehow instead of prosecuting the lead in all areas, they got all hubristic and sloppy and just failed to iterate on the core product, while also failing to respond quickly when Anthropic showed that coding agents are the flywheel that makes the whole company faster.
It’s like they thought they had an unassailable monopoly and speedran to the lazy incumbent position, all in a matter of months.
Coding assistants won't win this game. They sure will win the hearts of developers, but to scale you need mass adoption and products for which users want to pay substantially. OpenAI is falling behind in the small features in their chat and app offering and have failed to innovate in their expensive offerings.
Codex btw is getting very competitive. It is fast and no longer far behind.
The strategic playbook of the web era said: Get a huge userbase of normies, then figure out how to monetise them (usually via advertising). OpenAI stumbled into the userbase via ChatGPT, but it's unclear if the strategy or the economics apply to AI. Anthropic tried to compete in the consumer market, but couldn't, so focussed on coding and enterprise, and it looks like that's actually turning into a smart choice, at least right now, because it turns out people will pay subscription costs for agents that do their job for them.
But will they pay the unsubsidized cost when anthropic needs to turn a profit?
And they actually can’t increase the price much.
Token generation is the metric Jensen Huang keeps pushing to temper analysts, which also affect nvidia’s future expected cash flows of course.
If increasing the price causes that metric to drop, the whole narrative falls apart and fear will spread in the stock market.
They’re all racing very close to the edge. Some closer than others.