Marc Andreessen says AI model makers are in ‘race to the bottom’ and it’s not good for business

Marc Andreessen, general partner at VC firm Andreessen Horowitz, was on stage at the Ray Summit conference earlier this month, talking about AI. CFO.com has pulled out the best quotes so you don’t have to watch the full interview.

“Maybe all of these companies are in a race to the bottom,” Andreessen said when talking about large language model (LLM) development.

While that might be stating the obvious, many aspiring entrepreneurs and veteran investors pay attention when Andreessen talks. As a reminder, his firm is also an investor in OpenAI, the developer of ChatGPT. The VC participated in the $300 million round that valued OpenAI at between $27 billion and $29 billion in early 2023.

Things have drastically changed since then. Andreessen compared current AI development with “selling rice,” meaning that there isn’t much product differentiation. “It turns out anybody can make an LLM,” he said, invoking commodification.