In Reply to: Thanks! More Vodou Accounting I guess? posted by SagoBob on October 26, 2026 at 20:12:08
AI was once a nebulous concept, but we're beginning to see companies carve out distinct niches in the market.
Meta is building an AI personal assistant around your existing data. By leveraging information it has already collected about you, along with authorized access to your email, Meta can offer an assistant that schedules appointments, reminds you to pay bills, and tracks routine tasks like annual checkups. It's a relatively low-tech application of AI, but one with enormous potential because it solves everyday problems for ordinary people. Investors are beginning to recognize the opportunity.
Microsoft is winning by embedding AI into software people already use. Copilot doesn't necessarily need to be the smartest AI on the market. Its advantage is that it's integrated into familiar products that businesses and individuals already rely on. Microsoft has an established reputation, a massive customer base, and a distribution network that competitors would struggle to replicate. Its stock jumped on news of growing Copilot revenue.
OpenAI and Anthropic are targeting the premium market. Think of them as the Ferraris of AI. Their customers are willing to pay more because superior reasoning, coding, research, and problem-solving capabilities can provide a competitive advantage. They're not trying to be the cheapest option; they're trying to deliver enough value that customers consider the premium worthwhile.
China is competing on price. Chinese AI companies are working to deliver increasingly capable models at a fraction of the cost of premium alternatives. Techniques such as distillation allow developers to train smaller models to reproduce some of the capabilities of more advanced systems. Trust and security concerns will remain significant obstacles, particularly for businesses handling sensitive information. But for consumers who primarily want help editing prose, answering questions, or using AI as a better search engine, lower prices may prove irresistible. Think of Chinese AI as the Hyundai of the industry: affordable, practical, and good enough for many everyday tasks.
I'm skeptical that SpaceX has a compelling position in the AI market. Their model sucks and Elon lacks trust.
We need to stop thinking of AI as one nebulous industry in which a single company will inevitably dominate.
Think of AI as the automobile industry. Ferrari, Toyota, Hyundai, and Ford all make cars, but they compete on different strengths and serve customers with different needs and budgets.
The biggest difference between the AI boom and the Dutch Tulip Mania of the 1630s is that AI is a technology that can generate cash flow, while tulips were largely being traded as speculative assets. The more tulips you create, the less they are worth. That's not necessarily true of AI. The larger we made the internet, the more economic value we created from it. AI may have the same trajectory.