It starts to feel like a trend where OpenAI is integrating features that were previously implemented by GPT-wrapper startups into ChatGPT. While these startups have added value by enhancing user experience, the trajectory is leading towards an ecosystem where these functionalities seamlessly integrate. The future will be challenging for those startups.
> OpenAI CEO Sam Altman has a clear message for startups developing products based on OpenAI's GPTs: They should assume that the models will improve drastically with each new release, rather than relying on the current state of the technology.
> Altman uses GPT-4 as an example: Any company that builds something based solely on GPT-4 is likely to be surpassed by GPT-5 if it is as big a leap over GPT-4 as GPT-4 was over GPT-3. Those companies will be "steamrolled" by OpenAI, he says. "Not because we don't like you, but because we have a mission."
I remember even Sam said this, he said something along the lines that if you are just building something that is effectively a missing feature of ChatGPT or one of there products, they are going to end up replacing you, so you need to be building something more significant.
That is the conclusion I’ve come to with all of my AI ideas so far. Easy to be replaced by a feature in ChatGPT or Copilot. Hard to create a meaningful moat.
Furthermore, it’s increasingly clear that OpenAI is doing a “bottom-up” challenge to Microsoft and Google. I would not be surprised at all if OpenAI launches an email service to compete with Gmail, imbued with a fine-tuned model that is optimized specifically for working with email. And then a document editor… and a spreadsheet… etc. There is huge money in productivity software. Microsoft 365 generates the bulk of the “cloud” revenue on Microsoft’s P&L. IIRC, worldwide revenue from Google Workspace and Microsoft 365 - and whatever other minnows can survive underneath them - is supposed to reach $40B by 2030. I apologize for not providing the source.
I think it will be less of a replacement and more like a partnership, per se. It will be hard for OpenAI to challenge services like Gmail due to the network effect. Same with Microsoft 365: People are used to that ecosystem. The success of partnerships hinges on whether Microsoft and Google can develop their in-house models and integrate them into their core products. OpenAI's partnership with Apple was a successful example of this strategy.
A high rate of customer acquisition isn’t the same thing as a network effect.
OpenAI has some network effects baked into its product suite, but it’s not even in the same league as Microsoft’s bundling strategy (setting aside Google for a moment). Microsoft’s history is littered with competitors who had a better product, a faster adopted product, who were snuffed because of Microsoft’s superior distribution capabilities.
I’m on the train at the moment, but the big exception is the mobile market, and in hindsight that makes perfect sense - most of the phone market consumer grade, where bundling productivity software isn’t much of a value proposition.
It’s far more likely that OpenAI remain where they are on the value chain, because it’s easier to capture and integrate AI startups into their products. If they were to compete on productivity software, they need to differentiate with entirely new modalities of AI-informed user interfaces, or they will be yet another slightly better program that got blown out of the water by MSFT enterprise distribution
edit: to be clear my point is, why would you become a bit player in an established market when you can dominate a new market you created yourself?
I think OpenAI is targeting clear enterprise use-cases for what they're building into ChatGPT. Data Analysis is a clear enterprise use-case. So, if a feature helps them sell ChatGPT Enterprise, I think they'll build it, since that's a large revenue driver for that.
Consumer-focused wrapper startups like jenni.ai, research helpers, or math tutors I doubt they'll focus on, since most of the revenue is in enterprise.
Absolutely. However, as OpenAI forms partnerships and begins to offer ChatGPT as a plugin across various platforms, many of those niche applications would be replaced.
I was looking at Vertex AI agents today, their implementation of agents is also like how 100 other startups have done it, no innovation nothing. Same copy pasta stuff
