Startups

Sam Altman: OpenAI is “going to steamroll you” if your startup is a wrapper on GPT-4

In the world of tech startups, there’s a timeless adage: don’t build your business on someone else’s turf. It’s a lesson many startup founders are learning the hard way in today’s rapidly evolving AI landscape. About a year ago, we wrote a piece titled, “The Rise of AI Wrappers and the Challenges Ahead,” highlighting the potential hurdles facing startup founders building their products on AI wrappers. Now, those concerns have come to fruition.

In a recent interview with Harry Stebbings on 20VC, OpenAI CEO Sam Altman issued a stark warning to startups, cautioning that they risk being “steamrolled” if their platform merely wraps around GPT-4. Altman’s words were prompted by the emergence of several startups crafting API wrappers that essentially serve as specialized prompts in disguise, offering features soon to be incorporated in the upcoming model iteration.

“We’re going to steamroll you.”

Discussing the future trajectory of OpenAI, Altman outlined two fundamental strategies for building on AI. On the one hand, there’s the approach of assuming the model won’t improve much, leading to the creation of various add-ons. On the other hand, there’s the strategy of betting on OpenAI’s continual advancement and building with that trajectory in mind. Altman minced no words in asserting that OpenAI is primed to dominate those who opt for the former path, not out of malice but due to their steadfast mission.

 “I think fundamentally there are two strategies to build on AI right now. There’s one strategy which is to assume the model is not going to get better and then you kind of like build all these little things on top of it there’s another strategy which is build assuming that OpenAI is going to stay on the same rate of trajectory and the models are going to keep getting better at the same pace. It would seem to me that 95% of the world should be betting on the latter category but a lot of the startups have been built in the former category when we just do our fundamental job because we like have a mission we’re going to steamroll you,” Altman said.

Altman’s warnings echo a broader trend in the startup landscape. Many newcomers in the AI realm are addressing immediate, visible issues or filling perceived gaps in current-gen AI platforms. Yet, these endeavors often amount to mere features that larger platforms will inevitably absorb as they evolve.

At one point during the interview, Altman said: “It’s not personal; it’s our mission. We’re just going to steamroll.” In an environment where platform advancements move at breakneck speed, staking everything on a time-to-market advantage seems naive. Instead, a more strategic approach involves deep reflection on factors like moats, customer-centric product experiences, and staying ahead of the curve in model development.

Interestingly, the democratization of AI owes much to the proliferation of AI wrappers, also known as API wrappers or libraries. These tools build upon existing AI frameworks like ChatGPT and Bard, ushering in a wave of generative AI products hitting the market.

Yet, our investigation reveals a recurring pattern: many of these products are mere facades, leveraging Large Language Models (LLMs) such as those offered by OpenAI. While they tout features like fine-tuning and user-friendly interfaces, such nuances matter little to deep-pocketed investors swayed by the hype.

Unspriingsingly, the success of ChatGPT has catalyzed a wave of generative AI startups seeking to leverage existing language models. However, many tools merely serve as user-friendly interfaces, offering little substantive innovation.

In essence, while these services may provide value to consumers, their long-term viability remains in question as larger players continue to evolve and absorb similar functionalities. In navigating the treacherous waters of the AI startup landscape, founders must heed Altman’s warning: innovate or risk being left behind in the wake of technological advancement.

Below is a YouTube video of Altman’s interview with Harry Stebbings of 20VC. Enjoy!

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