Marc Andreessen: uncertainty

Transcript context

…dangerous to prejudge these things. I'll just run this as a thought experiment and you can see what you think on this, but it's like, are AI models themselves defensible. Is there a moat on AI models? And on the one hand, you'd be like, "Wow, it certainly seems like there is or should be," because if something takes billions of dollars to build and you need this incredible critical mass of computing data and there's only a certain number of engineers in the world that know how to do this and they are getting paid like MBA stars. And then these companies have to deal with all these crazy political issues and press issues and reputational stuff and regulatory and legal. All of that translates to, okay, probably at the end of this, there's going to be two or three companies that are going to end up with like 100%, I don't know, whatever, 50/50 or 30/30/30 or 90/10 and one, or whatever it is, market share and then they're going to have whatever profitability they have and it's going to be kind of a classic oligopoly, or maybe one company's going to win definitively and it'll be a monopoly. And by the way, those outcomes have happened in software many times before. And so maybe that will be the outcome. The other side of it is if you had told me three years ago that in the Christmas of ChatGPT that within basically a year to year and a half there would be five other American companies that would have basically exactly capable products, and then there would be another five companies out of China that would have exactly capable products, and then there would additionally be open source that was basically the same, I would have been like, "Wow, the thing that seemed like it was black magic all of a sudden has become like commoditized really fast," which by the way, is exactly what happened. Within a year of GPT3 coming out, there were there open source GPT3s running on a fraction of the hardware that were available for free. And then there were five. Now you've got, fully in the game, you've got Google and you've got Anthropic and you've got xAI and you've got Meta and you've got all these other companies that are... and then DeepSeek and Kimi and all these other Chinese companies. And so even at the level of LLMs or AI models, you can squint and make that argument either way. By the way, same thing at the level of apps. It's like one school of thought is apps are not a thing because the model's just going to do everything, but another way of looking at it is no, actually adapting the model is kind of the engine into a domain involving human beings where you need to actually have it fit for purpose to be able to function in the medical industry or the legal industry or whatever or coding. No, you actually need the application level's actually going to matter enormously, and maybe the LLMs commoditize and maybe the value goes to the apps. And again, you can kind of squint either way on that one, and I know very smart people who are on both sides of that argument. And so my honest answer on this is I think we're in a process of discovery over time. The way I think about this kind of structurally is it's a complex adaptive system. on both sides of that argument. And so my honest answer on this is I think we're in a process of discovery over time. The way I think about this kind of structurally is it's a complex adaptive system. The technology itself provides one of the inputs. The legal and regulatory process is another input. Actual individual choices made by entrepreneurs matter a lot. The economics matter a lot. Availability of investor capital varies over time, that matters a lot. This is a complex system, and so we actually don't know the outcomes on this yet. We need to be open to surprises at the structural level of what happens. And of course, as a VC, this is very exciting because it means we're doing this now. We should make bets along every one of these strategies and see how this plays out. I would just say, there may be, I don't know, there may be like one particularly brilliant, I don't know, hedge fund manager or something who has this all figured out, but I guess I would say if they exist I haven't met them yet. So what I'm hearing here is don't over-obsess with moats at this point because we have no idea what'll end up being, and as much as it may feel like, okay, there's no way OpenAI will lose this lead, clearly we're seeing a lot of competition. GPT wrapper point is really great. It was such a derogatory term, I don't know, a year ago, just like, "You're just a GPT wrapper." Now it's like the companies that are the biggest companies, the fastest growing companies in the world.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.