<story><title>OpenAI is too cheap to beat</title><url>https://generatingconversation.substack.com/p/openai-is-too-cheap-to-beat</url></story><parent_chain><item><author>jaredklewis</author><text>&amp;gt; Offer the product for dirt cheap to kill off competition, then extract as much value from your users as possible by either mining data or hiking the price.&lt;p&gt;Genuine question, what are some examples of companies in that &amp;quot;hiking the price&amp;quot; camp?&lt;p&gt;I can think of tons of tech companies that sold or sell stuff at a loss for growth, but struggling to find examples where the companies then are able to turn dominant market share into higher prices.&lt;p&gt;To be clear, I&amp;#x27;m definitely not implying they are not out there, just looking for examples.</text></item><item><author>Bukhmanizer</author><text>The bleeding obvious is that OpenAI is doing what most tech companies for the last 20 years have done. Offer the product for dirt cheap to kill off competition, then extract as much value from your users as possible by either mining data or hiking the price.&lt;p&gt;I don’t understand how people are surprised by this anymore.&lt;p&gt;So yeah, it’s the best option right now, when the company is burning through cash, but they’re planning on getting that money back from you &lt;i&gt;eventually&lt;/i&gt;.</text></item><item><author>serjester</author><text>I think this is under appreciated. I run a &amp;quot;talk-to-your-files&amp;quot; website with 5ish K MRR and a pretty generous free tier. My OpenAI costs have not exceeded $200 &amp;#x2F; mo. People talk about using smaller, cheaper models but unless you have strong data security requirements you&amp;#x27;re burdening yourself with serious maintenance work and using objectively worse models to save pennies.  This doesn&amp;#x27;t even consider OpenAI continuously lowering their prices.&lt;p&gt;I&amp;#x27;ve talked to a good amount of businesses and 90% of custom use cases would also have negligible AI costs. In my opinion, unless you&amp;#x27;re in a super regulated industry or doing genuinely cutting edge stuff, you should probably just be using the best that&amp;#x27;s available (OpenAI).</text></item></parent_chain><comment><author>beezlebroxxxxxx</author><text>Uber is probably the biggest pure example. When I was in uni when they first spread, Uber&amp;#x27;s entire business model was flood the market with hilariously low prices and steep discounts. People overnight started using them like crazy. They were practically giving away their product. Now, they&amp;#x27;re as expensive, if not sometimes more expensive, than any other taxi or ridesharing service in my area.&lt;p&gt;One thing I&amp;#x27;ll add is that it&amp;#x27;s not always that this ends with higher prices in an absolute sense, but that the tech company is able to essentially cut the knees out of their competitors until they&amp;#x27;re a shell of their former selves. Then when the prices go &amp;quot;up&amp;quot;, they&amp;#x27;re in a way a return to the &amp;quot;norm&amp;quot;, only they have a larger and dominant market share because of their crazy pricing in the early stages.</text></comment>
<story><title>OpenAI is too cheap to beat</title><url>https://generatingconversation.substack.com/p/openai-is-too-cheap-to-beat</url></story><parent_chain><item><author>jaredklewis</author><text>&amp;gt; Offer the product for dirt cheap to kill off competition, then extract as much value from your users as possible by either mining data or hiking the price.&lt;p&gt;Genuine question, what are some examples of companies in that &amp;quot;hiking the price&amp;quot; camp?&lt;p&gt;I can think of tons of tech companies that sold or sell stuff at a loss for growth, but struggling to find examples where the companies then are able to turn dominant market share into higher prices.&lt;p&gt;To be clear, I&amp;#x27;m definitely not implying they are not out there, just looking for examples.</text></item><item><author>Bukhmanizer</author><text>The bleeding obvious is that OpenAI is doing what most tech companies for the last 20 years have done. Offer the product for dirt cheap to kill off competition, then extract as much value from your users as possible by either mining data or hiking the price.&lt;p&gt;I don’t understand how people are surprised by this anymore.&lt;p&gt;So yeah, it’s the best option right now, when the company is burning through cash, but they’re planning on getting that money back from you &lt;i&gt;eventually&lt;/i&gt;.</text></item><item><author>serjester</author><text>I think this is under appreciated. I run a &amp;quot;talk-to-your-files&amp;quot; website with 5ish K MRR and a pretty generous free tier. My OpenAI costs have not exceeded $200 &amp;#x2F; mo. People talk about using smaller, cheaper models but unless you have strong data security requirements you&amp;#x27;re burdening yourself with serious maintenance work and using objectively worse models to save pennies.  This doesn&amp;#x27;t even consider OpenAI continuously lowering their prices.&lt;p&gt;I&amp;#x27;ve talked to a good amount of businesses and 90% of custom use cases would also have negligible AI costs. In my opinion, unless you&amp;#x27;re in a super regulated industry or doing genuinely cutting edge stuff, you should probably just be using the best that&amp;#x27;s available (OpenAI).</text></item></parent_chain><comment><author>spacebanana7</author><text>The Google Maps API price hike of 2018 [1] is a relevant example.&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;kobedigital.com&amp;#x2F;google-maps-api-changes&quot; rel=&quot;nofollow noreferrer&quot;&gt;https:&amp;#x2F;&amp;#x2F;kobedigital.com&amp;#x2F;google-maps-api-changes&lt;/a&gt;</text></comment>