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<\/p>\nOpenAI\u2019s flood of announcements are getting hard to keep up with. A selection \u2014 not exhaustive! \u2014 from just the last month:<\/p>\n
The last two announcements just dropped yesterday, and actually bring clarity and coherence to the entire list. In short, OpenAI is making a play to be the Windows of AI.<\/p>\n
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For nearly two decades smartphones, and in particular iOS, have been the touchstones in terms of discussing platforms. It\u2019s important to note, however, that while Apple\u2019s strategy of integrating hardware and software was immensely profitable<\/a>, it entailed leaving the door open for a competing platform to emerge. The challenge of being a hardware company is that by virtue of needing to actually create devices you can\u2019t serve everyone; Apple in particular didn\u2019t have the capacity or desire to go downmarket, which created the opportunity for Android to not only establish a competing platform but to actually significantly exceed iOS in market share.<\/p>\n That means that if we want a historical analogy for total platform dominance \u2014 which increasingly appears to be OpenAI\u2019s goal \u2014 we have to go back further to the PC era and Windows.<\/p>\n Platform Establishment<\/p>\n Before there was Windows there was DOS; before DOS, however, there was a fast-talking deal-making entrepreneur named Bill Gates. From The Truth About Windows Versus the Mac<\/a>:<\/p>\n In the late 1970s and very early 1980s, a new breed of personal computers were appearing on the scene, including the Commodore, MITS Altair, Apple II, and more. Some employees were bringing them into the workplace, which major corporations found unacceptable, so IT departments asked IBM for something similar. After all, \u201cNo one ever got fired for buying IBM.\u201d<\/p>\n IBM spun up a separate team in Florida to put together something they could sell IT departments. Pressed for time, the Florida team put together a minicomputer using mostly off-the shelf components; IBM\u2019s RISC processors and the OS they had under development were technically superior, but Intel had a CISC processor for sale immediately, and a new company called Microsoft said their OS \u2014 DOS, which they acquired from another company \u2014 could be ready in six months. For the sake of expediency, IBM decided to go with Intel and Microsoft.<\/p>\n The rest, as they say, is history. The demand from corporations for IBM PCs was overwhelming, and DOS \u2014 and applications written for it \u2014 became entrenched. By the time the Mac appeared in 1984, the die had long since been cast. Ultimately, it would take Microsoft a decade to approach the Mac\u2019s ease-of-use, but Windows\u2019 DOS underpinnings and associated application library meant the Microsoft position was secure regardless.<\/p>\n There is nothing like IBM and its dominant position in enterprise today; rather, the route to becoming a platform is to first be a massively popular product<\/a>. Acquiring developers and users is not a chicken-and-egg problem: it is clear that you must get users first, which attracts developers, enhancing your platform in a virtuous cycle; to put it another way, first a product must Aggregate users<\/a> and then it gets developers for free.<\/p>\n ChatGPT is exactly that sort of product, and at yesterday\u2019s DevDay 2025 keynote<\/a> CEO Sam Altman and team demonstrated exactly that sort of pull; from The Verge<\/a>:<\/p>\n OpenAI is introducing a way to work with apps right inside ChatGPT. The idea is that, from within a conversation with the chatbot, you can essentially tag in apps to help you complete a task while ChatGPT offers context and advice. The company showed off a few different ways this can work. In a live demo, an OpenAI employee launched ChatGPT and then asked Canva to create a poster of a name for a dog-walking business; after a bit of waiting, Canva came back with a few different examples, and the presenter followed up by asking for a generated pitch deck based on the poster. The employee also asked Zillow via ChatGPT to show homes for sale in Pittsburgh, and it created an interactive Zillow map \u2014 which the employee then asked follow-up questions about.<\/p>\n Apps available inside ChatGPT starting today will include Booking.com, Canva, Coursera, Expedia, Figma, Spotify, and Zillow. In the \u201cweeks ahead,\u201d OpenAI will add more apps, such as DoorDash, OpenTable, Target, and Uber. OpenAI recently started allowing ChatGPT users to make purchases on Etsy through the chatbot, part of its overall push to integrate it with the rest of the web.<\/p>\n It\u2019s fair to wonder if these app experiences will measure up to these company\u2019s self-built apps or websites, just as there are questions about just how well the company\u2019s Instant Checkout will convert<\/a>; what is notable, however, is that I disagree that this represents a \u201cpush to integrate\u2026with the rest of the web\u201d.<\/p>\n This is the opposite: this is a push to make ChatGPT the operating system of the future. Apps won\u2019t be on your phone or in a browser; they\u2019ll be in ChatGPT, and if they aren\u2019t, they simply will not exist for ChatGPT users. That, by extension, means the burden of making these integrations work \u2014 and those conversions performant \u2014 will be on third party developers, not OpenAI. This is the power that comes from owning users, and OpenAI is flexing that power in a major way.<\/p>\n Second Sourcing<\/p>\n There is a second aspect to the IBM PC strategy, and that is the role of AMD. From a 2024 Update<\/a>:<\/p>\n While IBM chose Intel to provide the PC\u2019s processor, they were wary of being reliant on a single supplier (it\u2019s notable that IBM didn\u2019t demand the same of the operating system, which was probably a combination of not fully appreciating operating systems as a point of integration and lock-in for 3rd-party software, which barely existed at that point, and a recognition that software is just bits and not a physical good that has to be manufactured). To that end IBM demanded that Intel license its processor to another chip firm, and AMD was the obvious choice: the firm was founded by Jerry Sanders, a Fairchild Semiconductor alum who had worked with Intel\u2019s founders, and specialized in manufacturing licensed chips.<\/p>\n The relationship between Intel and AMD ended up being incredibly fraught and largely documented by endless lawsuits (you can read a brief history in that Update); the key point to understand, however, is that (1) IBM wanted to have dual suppliers to avoid being captive to an essential component provider and (2) IBM had the power to make that happen because they had the customers who were going to provide Intel so much volume.<\/p>\n The true beneficiary of IBM\u2019s foresight, of course, was Microsoft, which controlled the operating system; IBM\u2019s mandate is why it is appropriate that \u201cWindows\u201d comes first in the \u201cWintel\u201d characterization of the PC era. Intel reaped tremendous profits from its position in the PC value chain, but more value accrued to Microsoft than anyone else.<\/p>\n This question of who will capture the most profit from the AI value chain remains an open one. There\u2019s no question that the early winner is Nvidia: the company has become the most valuable in the world by virtue of its combination of best-in-class GPUs, superior networking, and CUDA software layer that locks people into Nvidia\u2019s own platform. And, as long as power is the limiting factor, Nvidia is well-placed to maintain its position<\/a>.<\/p>\n What Nvidia is not shy about is capturing its share of value, and that is a powerful incentive for other companies in the value chain to look for alternatives. Google is the furthest along in this regard thanks to its decade-old investment in TPUs, while Amazon is seeking to mimic their strategy with Trainium; Microsoft and Meta are both working to design and build their own chips, and Apple is upscaling Apple Silicon for use in the data center.<\/p>\n Once again, however, the most obvious and most immediately available alternative to Nvidia is AMD, and I think the parallels between yesterday\u2019s announcement of an OpenAI-AMD deal and IBM\u2019s strong-arming of Intel are very clear; from the Wall Street Journal<\/a>:<\/p>\n OpenAI and chip-designer Advanced Micro Devices announced a multibillion-dollar partnership to collaborate on AI data centers that will run on AMD processors, one of the most direct challenges yet to industry leader Nvidia. Under the terms of the deal, OpenAI committed to purchasing 6 gigawatts worth of AMD\u2019s chips, starting with the MI450 chip next year. The ChatGPT maker will buy the chips either directly or through its cloud computing partners.<\/p>\n AMD chief Lisa Su said in an interview Sunday that the deal would result in tens of billions of dollars in new revenue for the chip company over the next half-decade. The two companies didn\u2019t disclose the plan\u2019s expected overall cost, but AMD said it costs tens of billions of dollars per gigawatt of computing capacity. OpenAI will receive warrants for up to 160 million AMD shares, roughly 10% of the chip company, at 1 cent per share, awarded in phases, if OpenAI hits certain milestones for deployment. AMD\u2019s stock price also has to increase for the warrants to be exercised.<\/p>\n If OpenAI is the software layer that matters to the ecosystem, then Nvidia\u2019s long-term pricing power will be diminished; the company, like Intel, may still take the lion\u2019s share of chip profits through sheer performance and low-level lock-in, but I believe the most important reason OpenAI is making this deal is to lock in its own dominant position in the stack. It is pretty notable that this announcement comes only weeks after Nvidia\u2019s investment in OpenAI; that, though, is another affirmation that the company who has the users has the ultimate power.<\/p>\n There is one other part of the stack to keep an eye on: TSMC. Both Nvidia and AMD make their chips with the Taiwanese giant, and while TSMC is famously reticent to take price<\/a>, they are positioned to do so in the long run. Altman surely knows this as well, which means that I wouldn\u2019t be surprised if there is an Intel announcement sooner rather than later; maybe there is fire to that recent smoke about AMD talking with Intel<\/a>?<\/p>\n The AI Linchpin<\/p>\n When I started writing Stratechery, Windows was a platform in decline, superceded by mobile and, surprisingly enough, increasingly challenged by its all-but-vanquished ancient foe, the Mac. To that end, one of my first pieces about Microsoft<\/a> was about then-CEO Steve Ballmer\u2019s misguided attempt to focus on devices instead of services. I wrote a few years later in Microsoft\u2019s Monopoly Hangover<\/a>:<\/p>\n The truth is that both [IBM and Microsoft] were victims of their own monopolistic success: Windows, like the System\/360 before it, was a platform that enabled Microsoft to make money in all directions. Both companies made money on the device itself and by selling many of the most important apps (and in the case of Microsoft, back-room services) that ran on it. There was no need to distinguish between a vertical strategy, in which apps and services served to differentiate the device, or a horizontal one, in which the device served to provide access to apps and services. When you are a monopoly, the answer to strategic choices can always be \u201cYes.\u201d<\/p>\n Microsoft at that point in time no longer had that luxury: the company needed to make a choice \u2014 the days of doing everything were over \u2014 and that choice should be services (which is exactly what Satya Nadella did<\/a>).<\/p>\n
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