(#122) 💻 Is OpenAI building a social network?
🚕 Lyft enters the European market after buying FreeNow
Dear #onStrategy reader,
Here is what you’ll find in this edition:
💻 Is OpenAI building a social network?
🚕 Lyft enters the European market after buying FreeNow
🤖 Boston Dynamics & Hyundai Motors expand collaboration
🚙 General Motors wants to reinvent itself. It will be hard and painful
Onto the update:
Is OpenAI building a social network?
What an interesting rumor…or not. Well, what are the implications? Here are at least 3:
1/ OpenAI’s move into social networking might seem counterintuitive. Why would the creators of ChatGPT, already pulling in about 500 million weekly users, even need a social media platform? But here’s the real strategy (as I argue in my book “Business Strategies – Building Sustainable Models with Artificial Intelligence and Digital Platforms”): owning a direct relationship with users is about more than engagement. It’s about exclusive access to real-time, human-generated data that further strengthens OpenAI’s already substantial moat.
2/ Moreover, OpenAI isn’t chasing after likes or follows. Those 500 million weekly interactions represent a foundational asset that could make a social layer uniquely valuable. Building its own social network (or integrating social features directly into ChatGPT) means OpenAI can refine its models on data competitors simply can’t touch. It’s the classic network-effect playbook: the more data OpenAI captures through social interactions, the better their AI becomes, incentivizing even more user interaction.
3/ This looks like a strategy for entrenching an ecosystem. By expanding horizontally from pure AI to social media, OpenAI is solidifying its relevance. As I explore extensively in the book, platforms win not just by innovating in isolation, but by embedding themselves deeply into everyday user behavior. And what better way than turning half a billion weekly users into an ongoing, self-sustaining AI training loop? The Verge, Weekly users
Lyft enters the European market after buying FreeNow
Well, well, well…so many interesting things happening this week! So, what does it mean?
1/ Lyft entering the European market with a $200 million acquisition of FreeNow might initially seem puzzling. Why now? And why FreeNow? But, as I outline clearly in my book “Business Strategies – Building Sustainable Models with Artificial Intelligence and Digital Platforms,” the move makes strategic sense. Expanding horizontally into Europe doesn’t just double Lyft’s addressable market, but it also offers a critical foothold in major cities like London, Paris, and Milan, tapping directly into established mobility networks.
2/ Lyft is essentially buying its way into valuable, localized data and operational insights that are critical to scaling a sustainable mobility platform. FreeNow has already hit break-even status, proving there’s profitability hidden in Europe’s fragmented ride-hailing landscape. The real play here? Capturing the untapped potential of the European taxi industry, where nearly half remains offline and ripe for digital disruption.
3/ As highlighted in my book, the core of Lyft’s strategy it’s about building a defensible ecosystem rooted deeply in everyday transportation behavior. European regulations around minimum wages and driver benefits only reinforce Lyft’s opportunity to differentiate itself by delivering fairer, driver-centric experiences. Ultimately, Lyft aims to turn a single strategic acquisition into a durable competitive advantage. We shall see how things unfold. LINK
Boston Dynamics & Hyundai Motors expand collaboration
Here are three ideas on this topic:
1/ Boston Dynamics and Hyundai Motor Group expanding their collaboration makes sense strategically, especially in the context of mobility manufacturing. As I argue in my book “Business Strategies – Building Sustainable Models with Artificial Intelligence and Digital Platforms”, the future of manufacturing is increasingly tied to robotics and AI. Hyundai’s $21 billion investment in the U.S., which includes purchasing tens of thousands of robots from Boston Dynamics, shows the crucial role robotics will play in modernizing industrial processes.
2/ This deal is about increasing productivity and efficiency in manufacturing, not just innovation for innovation’s sake. Hyundai plans to deploy robots like Spot for inspections and Atlas for tasks on factory floors, aligning with the practical approaches outlined in my book. Boston Dynamics, meanwhile, benefits significantly from Hyundai’s scale and resources, helping it address growing demands in advanced robotics, where the market is projected to exceed $38 billion by 2035.
3/ The partnership also reflects an important theme discussed in the book: collaboration is increasingly critical in highly complex industries. With Hyundai set to become Boston Dynamics’ largest customer, this alliance is about leveraging complementary strengths. Hyundai gains cutting-edge robotic capabilities, and Boston Dynamics gains strategic access to Hyundai’s extensive manufacturing network, enabling both companies to better position themselves for future industry leadership. LINK
General Motors wants to reinvent itself. It will be hard and painful
Why? Well, at least 5 things to consider:
1/ GM’s $35 billion bet is about scale
Mary Barra’s strategy is straightforward: mass-produce batteries at lower costs to make electric vehicles affordable and profitable. The two Ultium battery plants already surpass Tesla’s North American production, but GM’s deeper challenge is to bring the per-unit battery cost down significantly. Scale is the advantage, but execution at this scale is incredibly complex.
2/ Automation is GM’s competitive advantage and its existential necessity
GM’s facilities are heavily automated, with a shift toward fewer workers and more robots. This is a practical necessity to remain cost-competitive. Every labor-saving robot or automated quality check directly improves margins, which is critical in a market where every electric car currently sold by GM loses money. Additionally, for Gen Z and even Millennials is not cool to work in factories.
3/ Political risk is GM’s biggest hurdle, even more than technological barriers
Marry Barra (ie. the CEO) is investing billions in a political environment shaped by tariffs, regulatory uncertainty, and shifting subsidies. Trump’s tariff regime and potential rollbacks of EV incentives underscore how vulnerable GM’s strategy is to external political shifts. GM’s extensive lobbying efforts highlight that its electric ambitions depend significantly on stable, supportive policy environments.
4/ GM’s competitive advantage depends heavily on securing and localizing supply chains
With strategic investments in local lithium and mineral mines and a pivot to using different battery chemistries, GM aims to reduce its dependency on volatile global supply chains, particularly those originating from China. Achieving vertical integration and local sourcing is essential to mitigate tariffs and supply risks.
5/ Finally, Mary Barra is betting that pragmatism, not futurism, will define the EV market
Barra’s strategy is built on pragmatic cost reduction and incremental improvement in battery technology. GM is betting consumers will adopt EVs once affordability and charging infrastructure improve sufficiently. It’s less about idealism and more about practical economics: once EV costs align closely with gasoline models, the market will naturally follow. Every leader in this industry knows this “open secret”. LINK
I just launched my book on strategy:
Through 28 chapters, I covered three parts: (1) Strategy, (2) Innovation & Growth, and (3) Generative AI.
See a full sample - the chapter on Network Effects. - click HERE