A fresh X exchange revives the long-running question of whether leading AI labs can protect their edge as newer models flood the market, with Gary Marcus pointing to three years of his own predictions now playing out in price cuts while Keith Rabois pushes back that the highest-capability systems still sit above the fray.
@rabois you made fun of me once but i warned for three years that there would be no moat, big price wars, and small or negative margins and that’s exactly where we landed.
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Rabois maintains the companies he backs continue to post solid returns and have yet to face direct price pressure on frontier offerings, yet no public figures confirm how wide those margins actually run or how long they might last.
Mid-June reports showed OpenAI weighing steep cuts to stay competitive against newer releases from Anthropic and Chinese rivals, giving Marcus fresh ammunition even as the precise reach of those discounts into the absolute highest models stays unclear.
Users dismissed Gary Marcus's claim that the AI sector now faces no moat and price wars because they see existing moats and argue price wars have not reached the frontier yet.
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@GaryMarcus don’t think that is accurate yet. there are definitely moats still. price wars, not at the frontier (yet). companies i work w all have solid margins.
@rabois you made fun of me once but i warned for three years that there would be no moat, big price wars, and small or negative margins and that’s exactly where we landed.
@Rick42798550 @rabois True story: After Elon moved to Austin, Lex Fridman blocked me on X for saying Austin would not become the AI capital of the world. (Spoiler alert: It didn’t.)
@GaryMarcus @rabois To be fair Keith thought Miami would overtake Silicon Valley so go easy on the guy 🤣
Thanks for engaging. 1. I expect price wars at the frontier soon (and one could argue there has already been some strong downward pressure). 2. Curious who in the GenAI world aside from Nvidia has solid margins. (Suno is one example but there don’t seem to be many.) 3. My claims have always been about lack of *technical* moat; should have made that clearer above.
@GaryMarcus don’t think that is accurate yet. there are definitely moats still. price wars, not at the frontier (yet). companies i work w all have solid margins.
@GaryMarcus @Rick42798550 @rabois That's impossible. Lex doesn't block anyone.