Great and comprehensive article! I must add, very well researched.
My takeaway from this is OpenAI is in for a lot of pain before it can be dominant.
Given that it doesn’t really own any pre-created channels like search or even e-commerce and Anthropic/Gemini and even K3 have broken its turf, OpenAI needs to rethink its core strategy.
Getting into Apple’s sphere of influence by launching devices (with Samsung and Google as quick to copy) can’t be the only card they play.
Moreover, MSFT also advocating for multi-model, task-suited optionality for enterprises, isn’t optimal for OpenAI.
But as they say, if they can survive a trial through fire, then why not? And that why not is what I am waiting for, from OpenAI.
It was an extremely well researched breakdown. API revenue is a double edge sword for both Anthropic and OpenAI, as chinese labs continue to bring better models at a fraction of price. Performance gap is like 19 and 20 now, though the extent of this parity is probably debatable.
Strong breakdown. The three-bucket TAM structure, current, near-future, long-term, is exactly the discipline this space usually skips, most pieces just blend it into one scary headline number the way SpaceX's own S-1 did. Really liked that part, Joseph.
One thing worth asking: you argue enterprise stickiness is the real war, but your own numbers show Anthropic already leading enterprise share and winning most new-customer matchups. Does that mean OpenAI's holding the bigger number in the fight that matters less?
I'm glad you enjoyed the TAM section, enjoyed writing it as well :)
In terms of the question, I definitely think Anthropic is leading currently which is reflected in their valuation passing OpenAI's. Market share is a real advantage - but not the main one.
All comes down to the question imo if AI will have one winner or multiple.
Great article. Left feeling this portrayed the company in the light that it deserves - not crazy bearish and doomed to fail. They are still by far the biggest AI company in the world. Didnt know they had 67% market share, but that stat only makes me more bullish on their future.
Great and comprehensive article! I must add, very well researched.
My takeaway from this is OpenAI is in for a lot of pain before it can be dominant.
Given that it doesn’t really own any pre-created channels like search or even e-commerce and Anthropic/Gemini and even K3 have broken its turf, OpenAI needs to rethink its core strategy.
Getting into Apple’s sphere of influence by launching devices (with Samsung and Google as quick to copy) can’t be the only card they play.
Moreover, MSFT also advocating for multi-model, task-suited optionality for enterprises, isn’t optimal for OpenAI.
But as they say, if they can survive a trial through fire, then why not? And that why not is what I am waiting for, from OpenAI.
It was an extremely well researched breakdown. API revenue is a double edge sword for both Anthropic and OpenAI, as chinese labs continue to bring better models at a fraction of price. Performance gap is like 19 and 20 now, though the extent of this parity is probably debatable.
API certainly is a double edged sword.
Thanks you for your comments and for your insights that made the piece better!
Strong breakdown. The three-bucket TAM structure, current, near-future, long-term, is exactly the discipline this space usually skips, most pieces just blend it into one scary headline number the way SpaceX's own S-1 did. Really liked that part, Joseph.
One thing worth asking: you argue enterprise stickiness is the real war, but your own numbers show Anthropic already leading enterprise share and winning most new-customer matchups. Does that mean OpenAI's holding the bigger number in the fight that matters less?
Thank you.
I'm glad you enjoyed the TAM section, enjoyed writing it as well :)
In terms of the question, I definitely think Anthropic is leading currently which is reflected in their valuation passing OpenAI's. Market share is a real advantage - but not the main one.
All comes down to the question imo if AI will have one winner or multiple.
Nice recap my friend. A long saga ahead...
Thank you Marc!
Anything for you :)
I absolutely LOVE footnote 12. Great pun since ChatGPT is the world champion hallucinator.
Thank you!!
Hope you enjoyed the post in general - glad someone caught one of the puns :)
A few more I included, not sure if you noticed.
Great article. Left feeling this portrayed the company in the light that it deserves - not crazy bearish and doomed to fail. They are still by far the biggest AI company in the world. Didnt know they had 67% market share, but that stat only makes me more bullish on their future.
Hot take, but im kinda bullish on OpenAI. GPT 5.6 is incredible and their instant feature is great. I think they are too big to fail.