Hardwareless Revolution

While watching the OpenAI keynote this week, one key observation I made is that they are advancing at the pace of what looks like a pure software startup. In contrast Apple, Google and (increasingly) Meta are advancing at the pace of hardware companies.

Being a private company makes OpenAI highly attractive for partnerships with leading companies. OpenAI has managed to successfully delegate the substantial tasks of developing and managing cloud infrastructure to Microsoft in a mutually beneficial partnership.

OpenAI appears to be steering clear of the intricacies involved with infrastructure, consumer hardware, and mature operating system maintenance, concentrating instead on the creation of advanced, cloud-centric, and platform-agnostic AI technologies. Their agility in software development is a major competitive advantage. By reducing the amount of platform and infrastructure work they are responsible for delivering, they can focus elsewhere, enabling them to accelerate the development, deployment and integration of their software services. This approach not only allows them to focus on creating and capturing differentiated value but also allows them to reduce expenses since they are not responsible for the substantial financial outlays associated with hardware and infrastructure projects.

Not to mention, they are not burdened with the distractions of developing opinionated new headset platforms or managing mature mobile operating systems. This gives OpenAI a lot of runway to focus on delivering the best cloud-based, cross-platform solutions, which is where the most significant AI advancements are currently occurring.

While edge computing may become crucial for generative AI in the future, for now, it allows OpenAI to innovate at a software-like pace with fewer distractions. Their focus on adding value and reducing costs increases the likelihood of deepening their integration across services that run on multiple platforms, without being slowed down by ownership of the underlying hardware problems.