Although a large total addressable market (TAM) is very alluring, know that most markets are dominated by a few players. For example, sugary beverages (Coca Cola), office software (Microsoft), or luxury sports cars (Ferrari). Exceptions are markets where companies cannot find a moat such as air travel or farming. In those markets, profit margins are tin.
At this point in time, it’s hard to tell whether moats will arise around large language models. Peter Tiels thinks so or he wouldn’t have invested (see his Competition is For Losers presentation).
What is unlikely is that semi-good companies will thrive. Maybe for a few years but at some point the smaller players will be pushed out of the market or need to find a specific niche. Just look at cars to see this. Around 1900 there were hundreds of car brands.
At this point in time, it’s hard to tell whether moats will arise around large language models. Peter Tiels thinks so or he wouldn’t have invested (see his Competition is For Losers presentation).
What is unlikely is that semi-good companies will thrive. Maybe for a few years but at some point the smaller players will be pushed out of the market or need to find a specific niche. Just look at cars to see this. Around 1900 there were hundreds of car brands.