Mark Cuban: OpenAI Will Never Return the $1T It's Investing [video]

> Fewer people applying for patents, because the minute you apply for the patent, it's available to everybody, which means every model can train on it

We know LLM companies have, for lack of a better word, "sidestepped" the copyright on millions of works with their "transformative fair use" arguments. Are LLMs also a way to sidestep patents?

He's right, there is a race. It's going to be a natural monopoly or duopoly because the cost to train the next SOTA model is always increasing. I can see that there are only 3 companies competing for the duopoly or monopoly realistically: OpenAI, Anthropic, and Google. Everyone else has fallen behind. The flywheel of generate more revenue, get more data, get more compute train a better model might already be too great to overcome for anyone else.

I don't understand why he thinks OpenAI can't be one of the duopolies or become the monopoly. OpenAI's models are always the first or second best overall - usually the first. They are also leading in the consumer market by a wide margin. They also made a strategic decision that is paying off which was committing to more compute early on while Anthropic is hammered by the lack of compute.

PS. They've raised ~$200b total, not $1 trillion.

I think it's unquestionably right that these companies can't all win, and those that don't win are going to burn a lot of money for nothing. However there's kind of two directions this can go: Compute gets cheaper, in which case there's no monopoly it'll be easy for many companies to make good models and there won't be pricing power on serving a good model. The other case is compute gets cheaper but we keep using more and more of it, so it does likely become winner take all. The first scenario is good for the economy but likely bad for the returns on these AI stocks. The second is maybe bad for the economy and maybe not even good for the winner.

Take Google or Meta: Today Google makes a shit-tonne of money and to make that money they need to run some servers. The servers are extremely cheap relatively to the revenue they make running the business. This makes them a very attractive stock - the core of why SAAS looks great. Now let's assume the monopoly path. Google can win. I think they likely will win. But now they're going to spending... how many hundreds of billions constantly training new models? The cost of providing the service suddenly isn't small relative revenue they're getting. So even for them it looks awful for their valuation.

IMHO, Google, Meta and Microsoft are best positioned to be the last ones standing because they have alternative cashflows. The danger with OpenAI and Anthropic is that they might end up being the Sun Microsystems of the AI era. It will only takes them a couple of misteps along the wrong technology path for them to be out of the game.

In my experience, Cuban is generally pretty good at stripping away the stupidity and BS.

Why should they return your money if it's a Ponzi scheme?