"The Cognitive Revolution" | AI Builders, Researchers, and Live Player Analysis

E31: Where are the Moats in AI? With Nathan Labenz and Erik Torenberg

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Jun 1, 2023

Nathan and Erik delve into the competitive 'moats' of leading AI companies, exploring factors like branding and team expertise that solidify their market positions. They debate the shift towards open-source versus proprietary solutions, shedding light on AI's evolving landscape resembling the cloud market. Insights into generative AI's cost-effectiveness in marketing reveal its growing importance. The discussion also touches on AI's role in enhancing client-candidate matching, regulatory challenges, and performance distinctions between major models like OpenAI's GPT and Google's offerings.

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INSIGHT

AI Market Structure

The AI utility market may resemble the cloud market, with big tech dominating half.
OpenAI and Microsoft currently lead, followed by Google and AWS, with a long tail of others.

ADVICE

Choosing AI Models

Start with GPT-4 for new AI tasks due to its performance and ease of use.
Consider other options only if cost is a major concern or for specific narrow applications.

ANECDOTE

Waymark's AI Usage

Waymark uses AI for scriptwriting and image selection but had pre-existing structured processes.
This contrasts with open-ended generation tools like Jasper, where users generate more outputs.

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Nathan and Erik analyze the moats of the most powerful companies in AI. The paradigm-shifting technology has led to a flourishing open-source community with market share. Yet, the big players have key competitive advantages that can be examined from many different angles.

LINKS:

Nathan’s Twitter thread on AI moats that sparked this discussion: https://twitter.com/labenz/status/1654853321876815872

Read about the 9 moats at length in our newsletter: https://cognitiverevolution.substack.com/p/the-leaked-google-memo-and-a

Leaderboard for AI rankings: https://lmsys.org/

We're hiring across the board at Turpentine and for Erik's personal team on other projects he's incubating. He's hiring a Chief of Staff, EA, Head of Special Projects, Investment Associate, and more. For a list of JDs, check out: eriktorenberg.com.

RECOMMENDED PODCAST:

The HR industry is at a crossroads. What will it take to construct the next generation of incredible businesses – and where can people leaders have the most business impact? Hosts Nolan Church and Kelli Dragovich have been through it all, the highs and the lows – IPOs, layoffs, executive turnover, board meetings, culture changes, and more. With a lineup of industry vets and experts, Nolan and Kelli break down the nitty-gritty details, trade offs, and dynamics of constructing high performing companies. Through unfiltered conversations that can only happen between seasoned practitioners, Kelli and Nolan dive deep into the kind of leadership-level strategy that often happens behind closed doors. Check out the first episode with the architect of Netflix’s culture deck Patty McCord.

https://link.chtbl.com/hrheretics

TIMESTAMPS:

(00:00) Episode Preview

(01:36) Where are the moats in AI?

(07:31) Open source vs. closed

(15:24) Recommendation: The AI Breakdown Podcast

(16:39) Sponsor: Omneky

(20:46) AI Safety

(33:00) Which players are going to win? 9 Moats.

TWITTER:

@CogRev_Podcast

@labenz (Nathan)

@eriktorenberg (Erik)

SPONSORS:

Shopify is the global commerce platform that helps you sell at every stage of your business. Shopify powers 10% of ALL eCommerce in the US. And Shopify's the global force behind Allbirds, Rothy's, and Brooklinen, and 1,000,000s of other entrepreneurs across 175 countries.From their all-in-one e-commerce platform, to their in-person POS system – wherever and whatever you're selling, Shopify's got you covered. With free Shopify Magic, sell more with less effort by whipping up captivating content that converts – from blog posts to product descriptions using AI. Sign up for $1/month trial period: https://shopify.com/cognitive

Thank you Omneky for sponsoring The Cognitive Revolution. Omneky is an omnichannel creative generation platform that lets you launch hundreds of thousands of ad iterations that actually work, customized across all platforms, with a click of a button. Omneky combines generative AI and real-time advertising data. Mention "Cog Rev" for 10% off.

This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.

Music Credit: MusicLM

More show notes and reading material released in our Substack: https://cognitiverevolution.substack.com