M.O.A.T.M.A.N.A (let the games begin)

Yes. I am declaring a new acronym for Microsoft, OpenAI, Alphabet, Tesla, Meta, Apple, NVidia and Amazon - Moat-Mana 🤔. Since we plan on talking about these companies a lot. We needed a pointer.

Before breaking down how each of these thoroughbreds will use their A.I. to eat the world and everything in it - I wanted to give insight into the double meaning of MOATMANA.  Mana is a Hawaiian word that references super natural power and Moat is a common word to describe how a company protects it's market share. Feels hyper relevant to our breakdown today. 

Microsoft

Microsoft clearly had their head in the game early on with their investment and inroads into OpenAI. Combine this chess move with the triple threat of Cloud (Azure), Windows and Office they could be the big winner if A.I. finds it's way into the workplace in the next 24 months. They do however have a history of triggering the U.S. Government when they go a little too far in leveraging their OS (we all remember the browser wars of 98). I felt their recent demo of Recall (where they record everything you do in Windows to train their A.I.) made Facebook look like a champion of consumer privacy.

Strengths: OS, Office and OpenAI inroads. The three O’s may give them a lead, but it may not be enough to win the consumer in long run.

Weaknesses: No Social. No Chip. No Phone.

OpenAI

Although OpenAI is not really a juggernaut in revenue, it certainly owns mindshare of the A.I. conversation due to the launch of ChatGPT. It's partnership with Microsoft to allow for it to scale infrastructure was a smart with not much downside. And the recent partnership with Apple (a known competitor to Microsoft) proved that point. But it also shows OpenAI’s glaring weakness. In order for them to lock down market share they need infrastructure (Microsoft), Distribution to the Device (Apple) and eventually will need access to content. One can assume that the “use content to train models without permission” strategy is over and now OpenAI has to pay for content. OpenAI does have a strong lead on the tech-side and as long as they maintain trust they could be a major contender for the “peoples favorite” since they have a nice Non-Profit wrapper to their neverending desire to profit and win.

Strengths: Head Start. Deal making with Microsoft and Apple could give them distribution they need to stay ahead of the game.

Weaknesses: Their revenue is 100% dependent on LLM usage via ChatGPT and their API. Smart money is betting on open source and competition putting downward pressure on pricing. They have no phone (except via Apple), they have no Content (except what they license) and they have no chip. Bottom line: they are heavily dependent on 3 of the 7 companies trying to destroy them.

Alphabet

Google might be the best positioned to win a massive piece of the A.I. market on paper. But in this race, execution is everything. Google has users (consumers and business), head start with search, phone, chips, browser, cloud and pretty much everything you need to win at all levels. The crazy thing is they published the paper that outlined the GPT approach to LLM development that OpenAI based their core technology around. Despite Google having all the pieces, there is one reason why they still may not win (or at least not win without losing). Search is their money train, and if there is one thing we know for a fact is A.I. will change (if not replace) traditional search experience. So Google needs to decide on how they do both - Win A.I. and not kill their search business. If they had 10 years to do it, I would concede that Google wins hands down. But at the pace we are moving they don't even have a year.

Strengths: They got the search, consumer, workplace, phone, chips, content (YouTube and search) and ad network (speed to revenue)

Weakness: There business model may not work the same in an A.I. first world.

Tesla

Yes, Tesla / xAI makes the list. The uniqueness of their moat is the millions of cars driving around with cameras recording the world. Obviously the primary application was for self-driving capability, but it doesn't take much to think about how many applications could leverage the A.I. models trained on the visual world around us. Of course Google Maps could rival this functionality but Tesla has an army of drivers across the world willing to do it for free just because they know it makes the car safer to use. Add on top of Tesla, there is xAI which has new funding and my guess will bring something new and interesting to the picture - most likely in the form factor of a robot.

Strengths : Network of vehicles gathering and training data. Elon's experience with making vehicles smart will translate to robotics and other use cases that the other 7 may not even think about.

Weaknesses : They won't play a big role in consumer apps or adoption which could put them at a disadvantage and limit their ability to offer apps beyond the car or home.

Meta (a.k.a Facebook)

As the only Social Media business in the A.I. race you have to wonder how do they compete without all the advantages of the other 7. It turns out they executed the “scorched earth” approach and made their model Open Source to cut everyone else off at the knees (at least for now). This approach will definitely make businesses and developers think twice before using pay-per-usage models like OpenAI. And to complete the one-two punch, Facebook has launched”AI powered Search” in their apps in hopes to turn their social apps into something more.

Strengths: Unique connection with consumers via their core assets Facebook, Instagram, Whatsapp.

Weaknesses: Their history of abusing consumer data will force them to walk the line and may be the one reason people don't trust them to be the platform for A.I. The open source play may pressure the other 7 to keep price low, but it probably won't win the day.

Apple

Apple has been quiet until recently on what their plans are for A.I. Although they were early to market releasing futuristic features like Siri and have been known to dominate the consumer experience when it comes to how we interact with computers and devices - they seem to be slow playing A.I. The strategy (or lack of) actually may become a smart play if the other 7 are over investing in building infrastructure that end up producing net zero profits. The recent partnership with OpenAI confirms their strategy of “wait and see” but still provide a solution through deal making and not pure R&D.

Strengths: Mobile, MacOS, iOS, Devices, Chips and probably the most trustworthy company of all 8.

Weaknesses: No proprietary LLM, No Business Apps, No Social.

Nvidia

Currently the clear winner of A.I. There is not much you can criticize about the execution and moat Nvidia has created. Granted they are the infrastructure required for the other 7 to do what they need to do, so it's not fair to compare their core business with the others (especially since the other 7 are the biggest customers). However, Nvidia does have plans to go up the stack and compete in the cloud/apps layer which will be interesting to watch.

Strengths: Way ahead of the Chip game. They have the ability to move up the stack by providing hosting services and also incorporating proprietary software on the chip to maintain their advantage.

Weakness: They are the king on the hill that will need to fight off Google, Apple and others who are making competitive chips. They have no distribution directly to consumers or businesses, so they depend on their competitors to buy their chips.

Amazon

Another dark house in this race is Amazon. Obviously they have a massive cloud business that will need to stay competitive by offering access to A.I. but they also have shown interest in bringing A.I. to consumers with products like Alexa. Amazon also has a completely different relationship with consumers with their core e-commerce business. It will be interesting to see how their marketplace plays a role in how we use A.I. day to day.

Strengths: Only A.I. company with an E-commerce platform. This gives them a solid moat that no other competitor really seems to have interest in trying to cross. They also have a strong cloud business.

Weakness: No mobile device, No chips, No compelling LLM, No Social.

We plan on continuing the conversation of MOATMANA in future posts and tracking how each progresses in the race for A.I. dominance.

Let the games begin.