> 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.