E165: Vision Pro: use or lose? Meta vs Snap, SaaS recovery, AI investing, rolling real estate crisis

TL;DR

Open source AI models are set to disrupt the market and commoditize proprietary models, leading to a decrease in their economic value, while still providing utility. However, companies that can maintain a slight lead over open source models, like OpenAI, can capture a significant market share. The development of custom models on platforms like OpenAI creates a developer network effect, making it more appealing for developers to build on and reach a broader audience.

Transcript

all right freeberg is back welcome back to the Allin podcast episode 160 something your favorite podcast in the world yada yada yada with me again the chairman dictator moth po hoaa the Rainman yeah definitely David Sachs is here and back from his time in the metaverse we found him somewhere out in space in the solar system in his Apple goggles you... Read More

Key Insights

• 🎟️ We are observing a rebound in the SAS market after a period of deceleration and missed forecasts, signaling a recovery and renewed growth.
• 🤗 Open-source AI models have the potential to disrupt and commoditize proprietary models, reducing their economic value while still providing utility.
• 🙂 Companies that can maintain a slight lead over open-source models can capture a significant market share, leveraging the developer network effect.
• 🧑‍🏭 The speed and responsiveness of AI services are critical factors in user adoption and success.

Questions & Answers

Q: What factors are driving the rebound in the SAS market?

The SAS market is experiencing a rebound due to lower expectations, a bottoming out of growth, and a renewed focus on efficiency and productivity within enterprises. Companies are finding ways to optimize costs and invest in SAS tools that can drive profitability.

Q: Will open-source AI models completely commoditize proprietary models?

Open-source models have the potential to significantly decrease the economic value of proprietary models. However, companies that can maintain a slight lead over open-source models can capture a significant market share, particularly if they can attract developers to build custom models on their platforms.

Q: How important is speed and responsiveness in AI services?

Speed and responsiveness are critical factors in the adoption and usability of AI services. If the response time is slow, users are less likely to utilize the service, regardless of the quality of the model. Achieving fast response times requires efficient infrastructure and hardware support.

Q: What role do picks and shovels providers play in the AI market?

Picks and shovels providers, such as hardware and infrastructure companies, are crucial in supporting the development and deployment of AI. These providers offer the necessary tools and resources for developers to build and run AI models effectively.

Summary & Key Takeaways

• The SAS recession appears to be over, as cloud computing platforms are experiencing accelerating growth in net new annual recurring revenue (ARR), signaling a rebound in the SAS market.

• OpenAI's strong lead in foundational AI models, like GPT, gives them an advantage in capturing a majority of the consumer market, as consumers seek the best-performing models available.

• The open-source nature of AI models allows developers to create custom models using platforms like OpenAI, which is more attractive than training and fine-tuning models from scratch in the open-source ecosystem.

• The combination of widespread adoption and developer network effects can lead to exponential growth for open-source AI models, potentially lowering the economic value of closed models.