If you looked at OpenAI before Friday afternoon, it had everything a business buyer (and therefore an investor) could possibly want in a startup: an absolutely killer product at ChatGPT, a rock star CEO, and massive potential future income.
It looked as solid as any startup could be — until it wasn’t. While the situation remains fluid, it appears that CEO Sam Altman is ready to drive his Microsoft tour bus, taking co-founder Greg Brockman and most of his employees with him.
When the mess hit the fan on Friday, all of the risks that vendor lock-in represents were suddenly on display, and when the soap opera came out over the weekend, startups heavily invested in OpenAI technology had to wonder how this would play out.
Supplier lock-in has been a problem for as long as there have been business buyers. While there are many large language models on the market from various vendors, OpenAI’s GPT 3.5 and GPT 4 seemed to stand above the rest.
Many companies I spoke to emphasized that although OpenAI appeared to be the market leader (helped by Microsoft’s significant investment in the company), there was a general feeling that the current AI wave is still very early and that it pays to be flexible when choosing a model.
Companies that chose an agile approach over a single AI model vendor should feel pretty good today. If there’s any object lesson to be learned from all of this, even as the drama continues to play out in real time, it’s that it’s never, ever a good idea to go with just one vendor.
The founders are proceeding cautiously
Founders who put all their eggs in the OpenAI basket are now suddenly in a very uncomfortable position as the uncertainty surrounding OpenAI continues to swirl. A startup founder, who chose to speak out to be honest, says that their company was about to sign a large contract with OpenAI and this situation has left them in a bind.
