Ask HN: If the models are so good, why doesn't OpenAI just start 100 companies?
Title is a bit of an exaggeration but the question is more: if the frontier models are so good, why even sell them as your primary money maker? Couldn't OpenAI or Anthropic make a lot more money by just starting companies themselves that leverage the models and building their own products? Is selling tokens really the best strategy? Especially with commodification and prices declining wouldn't that indicate there is more money to be made on the application-side of the models rather than the utility side
Discussion Highlights (20 comments)
digitaltrees
They are doing that. That is why they have moved into the app layer. They are counting on software being replaced with agentic super apps. The only reason they aren’t starting actual service companies is that those still require human boots on the ground. But they are pushing their way into consulting (they bought my friends consulting firm)
Rodmine
During a gold rush, sell shovels. They are investing heavily in in-house custom silicon, which is the shovel end of things. They could open more jewellery chains, but that is a very different kind of operation and it is in their interest to let others compete for that and use their resources on the shovel side of things.
CoolestBeans
1. They are starting to do it. Take a look at OpenAI's product portfolio, there's a galaxy of attempts at application. 2. Selling tokens via long running agents is the only thing that's provably working with respect to revenue growth. 3. They need revenue yesterday. Increases in borrowing rates means access to capital isn't what it was in the 10s. Their runway is much shorter than you would imagine. 4. Some of the decision makers at these companies believe AI will exhibit Jevons Paradox and that any decrease in price will result in induced demand. 5. The frontier models are still subject to the limitations of AI. They're not good at everything. Better to have someone else learn that on their dime rather than yours.
paxy
Because running 1 business is easier than running 100 businesses. It takes a lot more than writing good software for a company to be successful.
salemh
Why aren't they vibe coding millions of dollars of licensing costs away? Why Even Anthropic Can’t Vibe-Code Away Salesforce https://www.salesforceben.com/why-even-anthropic-cant-vibe-c...
gofreddygo
reframed question - if their shovels are so good why dont they dig gold and sell gold themselves.
altcognito
There was/is a youtube commericial I think that gave away the game to some extent with regards to this. It was selling some platform to create apps. Everybody in the office rejoicing because they were all creating apps. Inevitably, like three people in the office make the same app. I've experienced the same thing in real life a couple of times over. I think Einstein's quote "A new type of thinking is essential if mankind is to survive and move toward higher levels." is apt. Apps will solve a bunch of problems, but if anyone can create those apps, there will be no market for them. I don't have the answers, but long term, it probably doesn't lie in selling apps. We've only just started. At my regular job, we're just catching up on all the internal work we had. I think there is a real crunch in trying to figure out how to build moats and things that are hard to replicate that are sellable. Maybe it will be the physical. Probably most of the moat will be made up of network effects and capital intensive processes. If I had the answer I'd probably be working on it right now.
dude250711
Why don't they simply run a quantitative hedge fund on the side?
NormalGoat
It's basically the same reason why Apple didn't create every app in the App Store. No single company can be specialised in everything, and more importantly, selling tokens is risk-free money since they get a cut for every app without taking any business risk.
throw20261022
Selling tokens in conjunction with a phone number or credit card yields signals for surveillance for intelligence agencies that can be tied to individuals. This keeps the firms relatively out of trouble with the federal government. This makes them too big to fail. Being subject to such surveillance is in fact is a strong reason for conscious individuals to seek to move away from them in the long term once the quality of competing AIs reaches a shared plateau. They're doing the other thing too via numerous startup acquisitions.
HeavyStorm
Better to sell spades than mine for gold...
Havoc
Bad argument. Why go into the hamburger business when you think you've got an infinite profitability recipe on your hand potentially. The big AI houses have doubled down and quadrupled down on their core founding myth for better or worse. The AI boom is a full send. Either this works in spectacular fashion or it blows in spectacular fashion.
thomasfromcdnjs
I think that the generative ui and self evolving databases per user is definitely coming, I think they are making this wager too. A lot of pieces of the ecosystem haven't been thought out fully yet and there is a shift in user experience e.g. a lot of people are more content with just using Dots then loading up apps and visuals, when they can just read what they needed to know.
mochidusk
Going up the value chain is much more difficult as opposed to going down. A packaging company for example will have a much harder time creating a snack company than the snack company creating a packaging company. The snack company will know exactly what it needs for its packaging and have strict requirements. Down the chain you see what you need to do because you work directly with it everyday.
dofm
This is more or less the same as a question Alex Karp asked in that hilariously off-the-rails CNBC interview: why, if the code is so good, are they selling by the token and not asking for a cut? https://www.yahoo.com/entertainment/tv/articles/televised-ne... I think OpenAI actually will ultimately start a fleet of consultancy/SaaS spinoff companies, each perhaps short-lived until the core product does the job out of the box.
jrflowers
Why would they try to run a real business when they can publish blogs about how spooky the product is and then live out the plot of the 1994 film Blank Check
mikert89
Thats what they are doing, except with a unified model, not a seperate app for each one
randomNumber7
They wait and collect data from their future competitors first.
Retr0id
Selling tokens is what scales best right now.
browningstreet
Starting a company is riskier than selling to companies who survived the “it’s hard to start a company” gauntlet.