Two thoughts on this.

1. The reason that these big companies are so big is that they make intelligent, and big bet investiments in emerging technology.

2. Nothing stops anyone from getting into this market. The barrier to entry isn't regulatory or anti-competitive, it's just raw compute power. Very few companies have the resources on hand to pull that off.

Similarly, nothing stopped people from drilling for oil in the late 1800s. But Standard Oil did it so much more efficently (literally figuring out how to take 'waste' crude and refine it) and became a major player. Still nothing stopped someone from drilling. But the efficiencies Standard Oil had were hard to overcome.

Of note, when Standard Oil was questionably broken up, gas and oil prices did not become cheaper and we had a regression on who could access the asset. We face a similar issue. This isn't monopoly except under the most intellectually lazy use of the term and the behaviors are not anti-competitive.

Yet what have we gotten? Access! These companies immediatly provided access to AI where so many smaller firms, up until now, have held their technology in close.

Expand full comment

OpenAI's GPT-4 Turbo announcement last week was more groundbreaking than people realize - it created a new ceiling for how much LLM providers such as Anthropic can charge. The 128k context window and reduced latency are the kickers that kept many users with Claude.

As long as GPT-4 is considered state-of-the-art, enterprises will willingly pay less for better performance. I'd expect Anthropic to follow suit and reduce its API pricing soon.

Expand full comment

For sure - the 128K context window felt extremely targeted at Claude. We'll see how Anthropic responds.

Expand full comment

"Diplomacy is the art of saying 'Nice Doggy' until you can find a big enough rock"

Satya is looking for rocks.

He'll cut another $Deca-Billion check of MSFT stock while he materializes his own rock.

Expand full comment

Looks like Satya found his rock...

Expand full comment