GPT Store aims to transform ChatGPT into AI platform giant - CO/AI
The debate around network effects in ChatGPT's growth model highlights a critical business strategy question for OpenAI as it seeks to maintain market dominance in the rapidly evolving large language model landscape. The company's massive $300 billion valuation rests partly on assumptions about how network effects will help it secure lasting competitive advantage, though these effects appear weaker than those seen in other tech platforms.
The big picture:
OpenAI is banking on two types of network effects to maintain its competitive edge in the large language model (LLM) market, though both appear to be weaker versions of patterns seen in other successful tech platforms.
Why this matters:
These network effects form a central pillar in justifying OpenAI's extraordinary $300 billion valuation, suggesting investors believe the company can establish lasting market leadership.
Behind the numbers:
Unlike traditional platform businesses where network effects create overwhelming market dominance, the LLM market may see more fractured competition if these effects prove weaker than anticipated.
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