charm137

So they clearly have a product, a strategy around it and perhaps the compliance scaffolding (SOC2 Type II etc) that may be needed before actually being able to charge money for it. They also have the right brand names associated with the founding team. Execution, so far, seems good enough to create a splash, at least.

As an investor, the question(s) to ask is (in my view): "How do they make money? Will that way to make money survive?". The answer to the first: selling input tokens and perhaps subscriptions/credits eventually.The answer to the second: "Yes, but with the risk of unit revenues declining faster than their unit costs". How can they mitigate this problem: by being big (scale / mindshare etc) so that their unit costs (including for customer acq) fall faster than their unit revenues will - I believe that is the question most AI companies are trying to tackle these days. Any new competitor will have to tackle basic fixed costs (of getting started) first before even getting to the stage of having the luxury of worrying about unit-economics.

So yes, they might eventually be competed away but whoever is in their team is trying hard to make a useful product/ecosystem and that should be applauded, not ridiculed with "it's all marketing". This is way more than a simple github/huggingface-based open-source replica solution can hope to achieve without institutional backing (either big-tech or system-integrators).

What should rightly be questioned, of course, are the valuations the VCs are providing to them in hopes of passing this hot potato to a willing buyer (say a hardware maker like NVidia) - the incentives there are very well defined and depend very much on perceived TAM (which lately is on very shaky ground given how far token pricing has fallen causing, among other things, OpenAI to "miss" on the market's expectations for annualized revenues, even before they're listed!) [1]