DeepSeek just further reinforces the idea that there is a first-move disadvantage in developing AI models.
When someone can replicate your model for 5% of the cost in 2 years, I can only see 2 rational decisions:
1) Start focusing on cost efficiency today to reduce the advantage of the second mover (i.e. trade growth for profitability)
2) Figure out how to build a real competitive moat through one or more of the following: economies of scale, network effects, regulatory capture
On the second point, it seems to me like the only realistic strategy for companies like OpenAI is to turn themselves into a platform that benefits from direct network effects. Whether that's actually feasible is another question.
When someone can replicate your model for 5% of the cost in 2 years, I can only see 2 rational decisions:
1) Start focusing on cost efficiency today to reduce the advantage of the second mover (i.e. trade growth for profitability)
2) Figure out how to build a real competitive moat through one or more of the following: economies of scale, network effects, regulatory capture
On the second point, it seems to me like the only realistic strategy for companies like OpenAI is to turn themselves into a platform that benefits from direct network effects. Whether that's actually feasible is another question.