Jin Koh

C'mon people, are we really surprised by @deepseek_ai? Did you really not see it coming? From our @nfx blog in 2022: "The [core AI models] are going to be open-source and easy to use. Models is where the generative AI revolution started – but it’s not where it will end. It’s not going to take long, maybe 3 years, for models to approximate each other and reach human limits. The ability for these models to differentiate themselves stops at those limits. Data network effects asymptote over time. An AI model that is 5% or even 20% percent better than the competition is a pretty slim defensibility. The AI models will be switched out at will. Which of course ... commodify them.” There will be several more 100X reductions in speed and cost in the next two years, and eventually it will run on CPU's and we won't need GPU's, and it will run on your smartphone and laptop without heating it up. Note that @Meta pulled the same trick as DeepSeek but not as well (yet) with Llama which is to say "Fuck, I lost, so I'll blow the whole market up by doing opensource 6 months after you. If I can't win, I'm going to keep you from winning." Many players have it in their strategic insterest to open source AI capability. Meta is one. China is a second. There are many more. It's inevitable. Hasn't this been obvious from the beginning? The defensibility of these models companies is not to have the proprietary model that is better than another. That advantage asymptotes within a few years. They have a short window to create network effects on top of those models with workflow software, or security layers, or marketplaces, or 10 other methods. But that window closes. DeepSeek or the next DeepSeek, whoever it is, signals the closing of their window. These big dick swinging $500B projects, "I'm good for my $80B," or whatever, just got caught up in the competition with each other, ignoring the reality of the technology, misallocating VC money, shareholders money, and now trying to get taxpayer money. Once again, faster and smarter beats bigger. And look, if DeepSeek turns out to be not as great as we think now, don't worry, the next DeepSeek will be. And the next.

OpenAI was founded 10 years ago, has 4,500 employees, and has raised $6.6 billion in capital. DeepSeek was founded less than 2 years ago, has 200 employees, and was developed for less than $10 million. How are these two companies now competitors?

Congratulations my dear friend President @realDonaldTrump on your historic inauguration as the 47th President of the United States! I look forward to working closely together once again, to benefit both our countries, and to shape a better future for the world. Best wishes for a successful term ahead!

Consumer is back. We did many more consumer investments in 2024, which was a surprise, because the consumer startup technology window had been closed for 11 years. But the energy shifted due to AI. What it takes to win: nfx.com/post/consumer-is-bac… 🧵 w/ resources below