OpenAI is the Future
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OpenAI wants to become the platform of agentic AI. They want to make ChatGPT the “Google Chrome” or “Android” of the future. Think about it this way: In the PC world, Windows was the underlying platform upon which you installed software to use. In the smartphone world, Android/Apple was the platform on which you accessed apps.
In the agentic AI world, ChatGPT will be the platform through which you access software and the internet. All through the natural-language chat interface. For example, rather than starting up Photoshop to edit an image, you’d simply write, “ChatGPT, brighten this photo for me”.
Since this will require a tremendous amount of computing power, they’re striking deals across the industry to lock in infrastructure. In addition to the above deals, here are some more deals they’ve done so far, many of which we’ve covered on this blog:
$300B data center build with Oracle
$100B investment from Nvidia, and deal to buy 10GW of chips
$12B deal with CoreWeave, another cloud computing provider
Partnership with Korea’s Samsung and SK Hynix for memory chips
Deal with AMD for 6GW of chips and 10% stake
It is imperative for OpenAI to secure chips from diverse sources, such as Nvidia, AMD, and Broadcom. It stops any single chipmaker from monopolizing the industry, like Nvidia has thus far. More competition means cheaper chips and higher profits for OpenAI.
The endgame for OpenAI is to become the infrastructure developer, builder of leading models, and provider of top tools. A vertically integrated platform for AI, all accessible through ChatGPT. Historically, platforms have been the most profitable and locked-in piece of the ecosystem (think Microsoft, Apple, etc).
OpenAI is the Future
Let’s dig deeper into what this means for the business model. For example, ChatGPT’s new Instant Checkout feature (a partnership with Etsy and Shopify) will link relevant queries to shopping and e-commerce sites. This means OpenAI may be switching over from the monthly subscription model to the more lucrative advertising model, which most of the internet runs on anyway:
A few weeks ago, OpenAI quietly announced Sora 2, a realistic model for generating AI videos. We believe text-to-video generation, which is multiples more compute-intensive than text-to-text, is one of the key milestones of AI development, and worth all of the capex being spent on it. Video is the endgame, not chatbots!
Video makes up 70% of the content we consume on a daily basis. Creativity is a uniquely human endeavor, and now anyone without the time or skills or equipment to make videos can suddenly do just that. This is the central tenet of social media — apps like Vine, Tiktok, and Instagram made creativity accessible to the masses, and people loved it. AI video generation is the next evolution of that.
OpenAI is not shy about their intentions. On DevDay, they announced ChatGPT users can chat directly with apps inside the interface. For example, you can create diagrams in Figma, take courses on Coursera, browse real estate listings on Zillow, plan a vacation with Booking/Expedia. These are not just simple plug-ins, but fully interactive “mini-apps” with their own interface and logic. All done within the chat window, and with ChatGPT at your side for context and advice.
One last announcement from DevDay was AgentKit, a toolkit that helps developers build smart assistants that don’t just chat with you, but can actually do things for you automatically. Like a helpful robot that can understand what you want, figure out the steps needed, and get the job done all by itself. We’ll leave it for another day to discuss the full potential of AI agents.
The implication of all this? Remember we’ve discussed mega-cap tech encroachment before. OpenAI represents a brand new competitor that changes how we will interact with the internet. That makes them a direct threat to precisely all of the Mag 7.
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