20VC: Chips, Models or Applications; Where is the Value in AI | Is Compute the Answer to All Model Performance Questions | Why Open AI Shelved AGI & Is There Any Value in Models with OpenAI Price Dumping with Aidan, Gomez, Co-Founder @ Cohere
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
In the short term of Market, Value Lies Below and Above the Model Layer
Current market dynamics indicate a significant challenge for businesses exclusively selling AI models due to aggressive price competition and free offerings from major players like OpenAI and META. This environment risks pushing model sellers into a low-margin, zero-profit scenario. Consequently, companies focusing solely on models may struggle, as many now recognize the importance of diversifying their offerings to survive. The application layer, particularly exemplified by user-driven services like Chat GPT, shows considerable potential for value generation, occurring alongside high expenses associated with chip technology in model development. Although the model layer promises long-term business prospects, immediate returns are hampered by tight margins, leading to a more favorable outlook for entities innovating above and below this layer.
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