OpenAI’s startup customers are already considering jumping to competitor model providers following the management shakeup at the Silicon Valley firm.
Some investors are reportedly already telling their companies to start looking for new providers and diversifying their models. A significant portion of OpenAI’s customers are startup businesses built on its models.
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The uncertainty
Since the launch of ChatGPT last November to immediate success, OpenAI CEO and co-founder Sam Altman has become the “AI date everyone wants to take to prom.”
But the OpenAI board fired him on Friday, Nov. 17, setting off “a chaotic weekend” for the firm. Now, with the turmoil and uncertainties at the company, its startup customers’ future with the firm is on the edge.
According to Business Insider, millions of developers and startups are using OpenAI’s models out of fear of potential service disruptions and are now looking at competitor models from firms like Anthropic and Meta.
The uncertainties worsened when over 700 OpenAI employees threatened to quit unless Altman and co-founder Greg Brockman were reinstated. Microsoft has already offered them jobs, although OpenAI directors are reportedly in talks with Altman for a possible return to the helm of the company.
“We will likely offer Llama 2 as an option for users to choose from in the future and look into fine-tuning our own models if the OpenAI situation worsens,” said James Blackwell, the founder of an AI-generated quiz maker called QuizGecko, which currently uses OpenAI’s model.
Some startups told Business Insider they were also considering switching cloud service providers like Google or Amazon Web Services to Microsoft Azure.
“Lucrative” options
But other customers, like McKay Wigley, founder of Takeoff AI, indicated they were moving to the Microsoft Azure service as the option seemed lucrative after Microsoft announced it had hired Altman to head its advanced AI research team.
He said he would stick with OpenAI’s API, but only for now, although he spent the whole weekend switching all of his startups’ cloud services to the Azure OpenAI Service.
“I have full confidence in the team there,” said Wrigley about the staff at OpenAI.
“My concern, however, is that the team may soon not be there. If things aren’t resolved, they will all jump ship to the new Microsoft outfit, and at that point, who knows what will still be online?”
The Information reported that over 100 of OpenAI’s customers contacted Anthropic over the weekend as they were looking at Claude as an attractive option.
Anxiety-driven shifts
“We chose OpenAI because of its perceived stability,” said tech-enabled waste maintenance startup DSQ Solutions founder Charlie Dolan.
Dolan said with the chaos at OpenAI in the past few days, he was considering Azure but “could just easily transfer parts of his codes that are reliant on OpenAI to Anthropic.”
Guillermo Rauch, who is the CEO of Vercel, a startup that helps firms build websites that integrate with many of the biggest AI models, said there is a lot of uncertainty and anxiety in the developer ecosystem right now.
Another businessman, Madrona managing director Matt Mcllwain, indicated that several other AI founders in his portfolio reached out to him over the weekend. They asked him for advice on how to avoid a crisis if OpenAI experiences high engineer turnover.
Mcllwain said he has recommended making use of different models for different needs, “doing some training across OpenAI and then using Llama for another component or Stable Diffusion for another component.”
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