I have read, in its entirety and with interest, an article written more than a year ago in November 2024, titled “Building LLMs is probably not going be a brilliant business,” by Cal Paterson. Paterson argued that, just like airlines, OpenAI may not have the moat it needed to justify its 800+ billion valuation, not to mention the kind of defensible moat that Buffett was looking for. Apparently, John Gruber of Daring Fireball agreed.
And Google agreed, too. In fact, in its leaked internal document, Google claimed that open source AI will outcompete OpenAI (and itself). Written in May 2023, the document can have quite a bit of truth in it today, given how Z.AI’s GLM 5.1 performs compared to Opus 4.6 and GPT 5.4, as well as the fact that this 745B model can be deployed locally.