Bonus: Platform Plays + OAI

I really dislike the “as I predicted, look how smart I am” type posts, but since I wrote on the topic just last Friday I can’t help but write this. Since I think it’s cheap and lame I’m writing it as a bonus daily.

Ahem. So, as predicted, OpenAI proceeds to resource a novel hardware device that will be designed around the machine intelligence, primarily LLM, at the core of their technological innovation. Specifically OpenAI is buying Jony Ive’s LoveFrom studio and forming io, whatever that is, because LoveFrom has prototyped some device that’s really great and OpenAI wants to own.

OpenAI is at this current moment winning the AI Platform wars. Although LLM models are commoditized and the race to build frontier models becoems progressively more expensive with lower ROI on the expended capital, and OpenAI does indeed have the most powerful models, the war will not be fought over the models. It will be fought over the platforms. Platforms beget users and usage, which begets revenue and resources to invest, and the usage also uniquely begets the data which external capital cannot replicate.

OpenAI is winning the platform wars because ChatGPT is the portal entrypoint through which most AI knowledge is currently accessed and, more importantly for their future strategy, the native app(s) are the beachhead through which OpenAI distributes and grows agentic capability and value delivery to users.

But the risk remains that Apple, and the other OS and other platforms on which OpenAI’s native apps run, elbows out OpenAI through a TOS change just like they did to Zuck in the 2010s.

If you’re one of the big guys, you compete by getting closer to the customer than the other guy is, own that entrypoint, and then use that entrypoint to eat the other guy’s value chain, to the extent technologically and legally possible. Said another way, unless you are the most base level, most proprietary platform in the stack, you always run the risk of the guy below you knifing you.

So if you’re Zuck you need the device (glasses, yet-to-be-announced-platforms) through which you can get revenge for the wrongs Apple commmitted, at least from your perspective as Zuck.

And if you’re Sam you need to build the device and own the platform before Apple catches up on the intelligence and synthesizes it into it’s ecosystem and pushes you out.