In this episode I dig into whether ChatGPT might get “Old Navy’d”, a concept that ties together capitalism, business strategy, and the evolving AI landscape. Using a Scott Galloway story about Gap and Old Navy as the jumping-off point, I explore what happens when a cheaper, “good-enough” alternative comes for the market leader. From Alibaba’s Qwen to DeepSeek’s leaner, lower-cost models, this episode unpacks the global economics of AI efficiency, U.S. protectionism, and what it would actually take for consumers, or companies, to switch away from OpenAI.
Main Topics Covered
The Prof G Markets podcast episode that sparked the ideaThe origin story of Old Navy and its positioning against GapAlibaba’s Qwen and DeepSeek’s cheaper AI modelsBruce Buchanan’s three-line economic model: perceived value, price, costWhy I think China is unlikely to dethrone OpenAI in the U.S.The “inside job” possibility of a smaller U.S. company creating a 90%-as-good modelWhat could make users actually switch models (price vs. perceived value)The “Netflix effect” and why stagnation kills perceived valueThe Costco model: keep margins low and values clearFinal take: OpenAI probably won’t get Old Navy’d anytime soon, but it shouldRecent ChatGPT use: Transcript research for this episodeLinks & Resources for This Episode
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