Because their core product is not a long-term sustainable business strategy. Local hardware and models will continue to improve to the point of not needing the hosted solutions. And if you do need a hosted solution, remember that the big cloud providers already offer these solutions, so signing up for OpenAI/Anthropic _and_ AWS/GCP/Azure is not a sound business decision compared to just signing up with 1 of them that offers your cloud infra + GenAI infra. (Which is why the long-term benefits for cloud companies will probably be for the likes of AWS and not the likes of OpenAI).
They'll continue to burn money for marginal model improvements in the next few years all the while having no moat _and_ having Open-Weight / Local models eat their lunch.
The only way for them to stay relevant as a company is to expand beyond simply providing the models.
They'll continue to burn money for marginal model improvements in the next few years all the while having no moat _and_ having Open-Weight / Local models eat their lunch.
The only way for them to stay relevant as a company is to expand beyond simply providing the models.