Your argument is essentially "no one will buy generic tissue when everyone calls it Kleenex". That's only powerful when ChatGPT is free. When there's price pain, we can see people adopting alternatives.
Branding is a moat but it's not a deep moat. Branding ironically works best (most profitablye) for incidental things that people exhibit to others - designer clothing is the most obvious - and this is because then brands have a social aspect (there's also branding a real signal of real superior quality - I'd buy a good brand of drill 'cause I have a rational reason to expect better quality but maintaining the quality of a branded product is more costly and hence less profitable than maintain the pure image of something like Coke and LLMs turn out not to really differentiate on quality). Whether they call LLMs "ChatGPTs" or not, people use LLMs for a result - they'll use a different LLM that gives equivalent result if they're motivated to do so. No one else is going to what brand of "ChatGPT" someone "drives", etc.
> Branding is a moat but it's not a deep moat.
Let's do an opposite question. What's Google's moat? What's Apple's moat? All I hear from everyone is "X is not a moat", which while true doesn't mean company couldn't be ahead of the competition forever.
Google's moat for search on the user side is quality, habit and integration but Google search is free and compared other "FANG" companies, Google is actually fairly vulnerable imo.
Apple's moat is people's hardware investment, their interface, their brand in a way that is socially significant as well as implying a real quality difference. Apple's overall moat is much larger than Google's.
Edit: and the specific non-moaty part of LLMs is that their answers are generic - LLMs don't have "personalities" because they are a trained average of all publicly available human language. If a given LLM had restrictions, it wouldn't be as useful.
Google's moat for search are the advertisers networks. Others can't bootstrap a search engine business because they don't have the advertisers to pay for it.
> quality, habit and integration
> hardware investment, their interface, their brand
Exactly, you gave all the possible moats for LLMs. Not saying OpenAI has it right now, I am disagreeing with the premise that LLM provider can never have moat.
My comment on Apple was hardware investment of Apple users. Neither Google nor Apple's own store of hardware matter in the age of "the cloud" imo.
I would agree that moats are relative and companies can stay ahead without deep moats. But I think you still the problem of the specific way that LLMs are generic. Users don't invest in an LLM, they just learn to use them and that learning can transfer. User don't get "bragging rights" for using ChatGPT rather than a competitor (almost the opposite). ChatGPT output doesn't have a "flavor" distinct from other LLMs - in fact, as a user, I want the output flavor I ask for rather than anything identifiable as ChatGPT.
You mentioned list of "deep moats" and all of them are applicable to LLMs. Just to repeat "quality, habit and integration, hardware investment, their interface, their brand".
> quality,
All LLMs are actually converging to about the same LLM, since they are trained on the same Internet/book/average-human-knowledge.
> habit
Habit matter for things people don't pay for. If a person pays, they'll go out of their way to get something for less. Microsoft's big thing is making sure end users never pay for Windows.
> integration,
Not going to matter. Every "AI application" is basically just a prompt and users can make their own prompts.
> hardware investment,
OpenAI doesn't even have a hardware investment, just a deal to use MS Azure. Other AI companies can and will just a cloud too.
> their interface,
Every LLM has the same interface. A chat window.
> their brand"
As above, brand matters for either habit (which again, only matters when thing cheap or free), social signaling (which a LLM choice won't give you) or actual differences in quality (which LLMs don't have).
> since they are trained on the same Internet/book/average-human-knowledge.
By this logic every search engine should converge to same thing? Again I am not talking about current gen llm, just saying your assertion that the quality would remain converged forever isn't substantiated enough.
> Habit matter for things people don't pay for
This is so baseless and ridiculous. e.g. Excel/Adobe isn't ahead of competition for features.
> OpenAI doesn't even have a hardware investment
https://www.reuters.com/technology/artificial-intelligence/o...
Google and Apple's moat in the mobile world is the monopoly Qualcomm has on modems and those two players being the only ones who can afford them, but nobody wants to talk about that.
Google's moat with this current wave of AI is pretty obvious: They own the compute resources inhouse.
Apple isn't immediately seeking to compete in this field, presumably because they don't see a deep enough moat.
> Branding is a moat but it's not a deep moat.
Branding is an extraordinary moat in fact and it is very deep. That's why you can walk into CVS, Walgreens, Walmart, Target, Costco and buy Kleenex and pay a brand mark-up for it, and they have a lot of shelf space in most stores. For no great reason other than brand and people keep buying it - that magic branded paper - by the billions of dollars worth every year.
The same is true for cereal products. $6 for a tiny box of branded, sugar loaded, garbage cereal? Laughable, absurd, and yet people just keep buying it. $3 for a little can of soup, outrageous, and people just keep paying it just to get the brand. It's all for the brand.
The same goes for branded over the counter healthcare products, such as Advil, or countless cough & cold products and supplements. How is Advil still such a massive brand? The brand value is very, very deep. It is deeply entrenched into the consumer thinking process, so much so they commonly think Advil is meaningfully superior to generic labels.
The same is true for the sugar water of Coke and Pepsi. Or 5Hour Energy. Or Monster. Or RedBull. There is nothing particularly special about any of it other than branding + routine. The flavors are fairly easy to mimic or even surpass. Also goes for branded bottled water, most of which is silly labeling, the height of bullshit branding.
$45,000 - $60,000 for a middle tier metal shit box of a vehicle, from any number of the automakers in the bottom 90% in terms of quality. Consumers could go used for $15,000 - $20,000. Instead of piling up an extra $150,000 in net wealth over a couple decades, they do the really dumb thing instead, because they can't control themselves (extremely poor impulse control, same reason they're all so obese and unhappy). They buy those cars to keep up with their peers in lifestyle projection, same reason they buy the brands in anything. If you get position as a brand, you've got consumers in hand (then it's just down to fighting with the other brands).