I wonder if they're pulling the wall-mart model. Ruthlessly cut costs and sell at-or-below costs until your competitors go out of business, then ratchet up the prices once you have market dominance.
Probably not. Do they really believe they are going to knock OpenAI out of business, when the OpenAI models are better?
Instead I think they are going after the "Android model". Recognize they might not be able to dethrone the leader who invented the space. Define yourself in the marketplace as the cheaper alternative. "Less good but almost as good." In the end, they hope to be one of a small number of surviving members of an valuable oligopoly.
Gemini is substantially cheaper to run (in consumer prices, and likely internally as well) than OpenAI's models. You might wonder, what's the value in this, if the model isn't leading? But cheaper inference could potentially be a killer edge when you can scale test-time compute for reasoning. Scaling test-time compute is, after all, what makes o1 so powerful. And this new Gemini doesn't expose that capability at all to the user, so it's comparing apples and oranges anyway.
DeepMind researchers have never been primarily about LLMs, but RL. If DM's (and OAI's) theory is correct--that you can use test-time compute to generate better results, and train on that--this is potentially a substantial edge for Google.
The latest Google Pixel phone (you know, the one that Google actually set the price for) appears to cost the exact same as the latest iPhone ($999 for pro, $799 for non-pro). And I would argue against the "less good" bit too.
I think this analysis is not in keeping with reality, and I doubt if that's their strategy.
> Probably not. Do they really believe they are going to knock OpenAI out of business, when the OpenAI models are better?
Would OpenAI even exist without Google publishing their research? The idea that Google is some kind of also-ran playing catch up here feels kind of wrong to me.
Sure OpenAI gave us the first productized chatbots, so in that sense they "invented the space," but it's not like Google were over there twiddling their thumbs - they just weren't exposing their models directly outside of Google.
I think we're past the point where any of these tech giants have some kind of moat (other than hardware, but you have to assume that Google is at least at parity with OpenAI/MS there).
There's lot of room to cut margins in the AI stack right now (see Nvidia's latest report); low prices are not an sure indication of predatory pricing. Which company do you think is most likely to have the lowest training and inference costs between Anthropic, OpenAI and Google? My bet goes to the one designing,producing and using their own TPUs.
I have no idea if this is dumping or not. At Microsoft/Google scale, what does it cost to serve a million LLM tokens?
Tough to disentangle the capex vs opex costs for them. If they did not have so many other revenue streams, potentially dicey as there are probably still many untapped performance optimizations.
lacker|1 year ago
Instead I think they are going after the "Android model". Recognize they might not be able to dethrone the leader who invented the space. Define yourself in the marketplace as the cheaper alternative. "Less good but almost as good." In the end, they hope to be one of a small number of surviving members of an valuable oligopoly.
scarmig|1 year ago
Gemini is substantially cheaper to run (in consumer prices, and likely internally as well) than OpenAI's models. You might wonder, what's the value in this, if the model isn't leading? But cheaper inference could potentially be a killer edge when you can scale test-time compute for reasoning. Scaling test-time compute is, after all, what makes o1 so powerful. And this new Gemini doesn't expose that capability at all to the user, so it's comparing apples and oranges anyway.
DeepMind researchers have never been primarily about LLMs, but RL. If DM's (and OAI's) theory is correct--that you can use test-time compute to generate better results, and train on that--this is potentially a substantial edge for Google.
GaggiX|1 year ago
socksy|1 year ago
I think this analysis is not in keeping with reality, and I doubt if that's their strategy.
JeremyNT|1 year ago
Would OpenAI even exist without Google publishing their research? The idea that Google is some kind of also-ran playing catch up here feels kind of wrong to me.
Sure OpenAI gave us the first productized chatbots, so in that sense they "invented the space," but it's not like Google were over there twiddling their thumbs - they just weren't exposing their models directly outside of Google.
I think we're past the point where any of these tech giants have some kind of moat (other than hardware, but you have to assume that Google is at least at parity with OpenAI/MS there).
bko|1 year ago
I think that's one of those things competitors complain about that never actually happens (the raising prices part).
https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr...
sangnoir|1 year ago
charlie0|1 year ago
entropicdrifter|1 year ago
Because I do
0cf8612b2e1e|1 year ago
Tough to disentangle the capex vs opex costs for them. If they did not have so many other revenue streams, potentially dicey as there are probably still many untapped performance optimizations.