Billionaire investor Chamath Palihapitiya says OpenAI’s dominance in the AI market is eroding as distribution power tilts toward Big Tech incumbents.
In a new post on X, the Social Capital founder shares two charts illustrating what he calls the shifting balance of power in AI.
Palihapitiya says OpenAI remains at the top of the generative AI race but is beginning to lose ground as the broader market expands and established players such as Google and Meta leverage their existing ecosystems.
“OpenAI is still the clear leader, but interestingly, they are losing percentage share as the market grows. It’s not really to other startups but incumbents with existing, massive distribution. This means that Google has a huge runway ahead of itself as its models and services become better. It also means that when/if Meta gets their act together, they will be able to gain share quickly.”
He adds that xAI, Elon Musk’s startup, is one power move away from making Grok competitive.
“It likely means that xAI will need to license Grok aggressively OR acquire existing distribution for their models – Snapchat, Pinterest etc.”
Turning his attention to AI coding agents, the billionaire says the subsector looks increasingly “unserious” and unsustainable. He notes that the skepticism among investors about the commercial potential of low-code and no-code AI tools appears to be warranted.
“It should be concerning that this category is shrinking. I think the reason why is obvious, but we aren’t allowed to talk about it. The reason is that vibe coding is a joke. It is deeply unserious, and these tools aren’t delivering when they encounter real-world complexity (building quick demos isn’t complex) in any meaningful enterprise.
Hence, people try, pay, churn.
This trend is not good.”
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.