Has OpenAI Lied to the AI Startup Community?

The latest ChatGPT update left the broader AI startup community on edge.

• The update impacts startups that integrate ChatGPT’s API to provide specialized services and functions.
• OpenAI’s dominance and ability to shape the AI landscape highlight the power imbalance between tech giants and smaller AI startups.

OpenAI’s recent ChatGPT update has the AI startup ecosystem worried as it becomes apparent that the AI leader will expand indefinitely.

The update in question allows ChatGPT to interact with PDFs and answer questions about them. And as someone who reads an ungodly number of legal documents and studies in PDF format, this feature is awesome. I now might be willing to shell out the money for a premium account, to my bank account’s dismay.

Which brings us to the issue at hand. You see, when GPT first came out, they made a big deal about it helping startups across the board. As a result, several startups, often referred to as “wrapper startups,” integrate ChatGPT’s API to offer specialized services and functions. One example is the very feature OpenAI introduced to GPT-4.

So, for many startups, this development is a dire warning.

Sahar Mor, the product lead at payments giant Stripe, minced no words when he warned, “OpenAI just executed a move that will wipe out dozens of AI companies,” specifically referring to wrapper startups.

ChatOCR, for example, created a ChatGPT plugin to extract text from PDFs. Following OpenAI’s update, a poll conducted by the developer revealed that 72.4% of respondents expected the plugin to “see less usage.” The fundamental challenge faced by these startups is that, without a significant differentiating factor, they risk becoming indistinguishable from the tools they rely on.

OpenAI’s decision to expand ChatGPT’s capabilities with features like PDF interaction is already impacting the startups that have built their businesses around the platform. It clearly demonstrates the power imbalance between tech giants (and whatever startups they are backing) and smaller players in the AI industry. They will do what they want and you either sink or swim…

So, now the question becomes: How do AI startups swim? One way to go about it is to find other AI models to build their AI applications. Or, if the funds allow it, these AI startups should develop their own proprietary AI models. It’s like the U.S. seeking to rely on its own companies rather than China’s.

We can place the blame on startups for relying solely on a single technology provider. But that doesn’t change the fact that OpenAI promised fairness.

But what else could we expect from a startup riding the coattails of a company so influential it put the “big” in “Big Tech?” To quote Alexander Pope, “After all, what is a lie? ‘Tis but the truth in masquerade.”

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