Another Podcast How does OpenAI compete?
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Dec 20, 2025 The hosts dive into the fierce competition surrounding OpenAI and the commoditization of AI models. They examine the infrastructure challenges and the difficulty of maintaining cost/performance advantages. Discussion flows into strategies for product differentiation and the role of AI as a feature. The disconnect between advanced builders and everyday users is highlighted, along with the real-world utility of LLMs. They ponder strategic choices for the future and draw parallels between AI's current landscape and the early days of the web.
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Models Look Commoditized Today
- Large LLMs are roughly commoditized with leaders swapping week-to-week and few users can tell the difference.
- This limits product defensibility because the science, data and infra approaches are similar across players.
Infra Alone Isn't A Clear Moat
- Competing by building cheaper/faster infra is possible but costly and offers limited visible user benefit.
- Without a clear user-facing performance gap, infra alone is an uncertain long-term strategy.
Three Strategic Paths Up The Stack
- You can either add AI as features, build new AI-first experiences, or focus on infra/API platform strategies.
- Each path faces fierce competition and weak classic network effects compared with historical platform shifts.