True, but presence of significant revenue is still promising. It's much better to have an "expensive compute" problem than a "nobody wants to pay for the product" problem.

Keep in mind that not only is OpenAI being directly propped up by investor hype, the downstream API users who contribute much of their revenue are also being propped up by investor hype. A big chunk of OpenAIs revenue is actually even more VC money in a trenchcoat.

The biggest marker of a bubble, to me, is that you have money-losing startups selling to other money-losing startups. On paper you see a lot of 'line go up' but it's just a lot of circulation in a closed body of water which will eventually evaporate.

Uber doesn't agree

Uber is an outlier because in a functioning economy that valued workers we wouldn’t have shipped all our jobs overseas and made gig economies the last line between housing and street schizophrenia.

Uber's revenue was never coming from other food delivery startups.

>True, but presence of significant revenue is still promising.

If started selling 5 dollar bills for 1 dollar, I could generate a lot of revenue with $150B. You wouldn't believe the demand we would see for $5 bills.

> It's much better to have an "expensive compute" problem than a "nobody wants to pay for the product" problem.

That is only true is your primary concern in life is personal wealth and you’re burning other people’s money.

YouTube is an optimistic example.

The bandwidth costs made it deeply loss making for a long time despite having loads of engagement and ad revenue. However over time they became more cost efficient at sending video over the internet and became profitable.

This strategy obviously doesn't always work, with WeWork being the canonical example. But it's not guaranteed to fail either.

YouTube's network effect creating a winner-take-most was recognized, pitched, and valued from the very start.

The capabilities of LLMs are impressive, but none of them have published an idea I consider to have the same potential for a trillion $ monopoly that the current hype looks like.

There are far more similarities with the dot-com hype.

No critical first mover advantage in sight. All parts are replaceable for the cheapest variant with little to no down side to users.

It wasn't obvious at the time YouTube would have a network effect though. It was very dependent on coming up with a great recommendation algorithm, along with monetization and revenue sharing. At the time, YouTube didn't have anything like that, iirc.

Even the basic front page of youtube was of immediate and obvious value to a creator, and would increase disproportionately in value the more people were on YouTube. The same goes for Amazon, and the same goes for Facebook.

All the LLM providers are - extremely useful - tools. Currently I can only see the 'non-monopoly' proportional improvement when their userbase grows from 100 to 1000.

But I might be wrong, and I wouldn't be surprised if in hindsight it will be obvious what the real disproportionate advantages there were to be found.

They bought youtube for 1.65 billion which is pennies on the dollar compared to what it is worth today.

Technically true, though in fairness it is unlikely the original owners would have gotten YouTube to where it is today. On the other hand there are companies who didn’t recognise they were nothing more than passing fads, refused buyouts, and crumbled.

YouTube did not have competitors and certainly not open source competitors.

I was there when YouTube became a thing, and I was running a music video-hosting website that I had built myself (on top of phpBB, even). We were encoding videos in Windows Media and RealPlayer formats.

There were LOTS of funded competitors to YouTube between 2006 and 2009, including Viddler (who paid Gary Vaynerchuk a small fortune to host his WineLibraryTV show there exclusively), DailyMotion (which is still alive today, although no longer a threatening contender), etc.

In 2009 I had a coaching business and was buying marketing courses and software which would deploy your videos across 40+ different video websites (including Google Video which was a separate thing until they acquired YouTube and merged those), and YouTube wasn't yet amounting to 50% of our video traffic.

I think you might be mistaken with the bold statement above.

This is a bit before my time but I remember a bunch of competitors to YouTube. They just all sucked.

It's loss-making at current usage, and usage per user will exponentially grow.

I'm not sure how promising? I can't help but see how easy it would be to change API endpoints to a different platform.

They're still early on the growth curve where there's enough opportunity for future growth that investing in scaling and improvement is more important than turning an immediate profit.

Remember when everyone on HN was sure Uber would never be profitable? Or Tesla? Or Amazon?

I do remember that, and I would say that they are still largely correct. Tesla needed government subsidies, Amazon needed AWS, and Uber needed a pandemic and Uber eats. The core businesses that HNers were referring to are still weak.

Tesla needs government subsidies. Uber needs a broken economy.

As did almost every large tech company today. Amazon lost money for decades.

Are we really still doing this nonsense? If Open AI wanted to become profitable they could do it inside of 12 months - growing companies don't care about profitability (nor should they)