Did OpenAI just kill thousands of startups?

In this video we explore whether OpenAI's announcement at its first ever Dev Day even signals the death of many early-stage startups.

OpenAI's recent product rollouts have sparked concerns about the survival of early-stage startups. With the introduction of new features like GPT-4 Turbo and the GPT Store, many startups using open-source models may face challenges. However, OpenAI's developments also open up new possibilities and create opportunities for innovative products. Let's explore the potential implications and the overall impact of OpenAI's announcements on the startup ecosystem.

GPT-4 Turbo and the Context Window

OpenAI's GPT-4 Turbo is a game-changer with its impressive 128,000-token context window. This surpasses the market leader, Claude 2, which offers a 100k window. Moreover, OpenAI also announced a price reduction for input and output tokens, challenging the notion that it's too expensive for companies using open-source models like Lama or Falcon. However, it's important to note that running open-source models comes with various benefits apart from cost, such as flexibility and customization.

Retrieval Capability and its Impact

One of the exciting features of GPT-4 is its retrieval capability, allowing it to fetch information from the web even if it wasn't specifically trained on a particular topic. However, this retrieval is currently limited to public sources like Bing and doesn't include access to private documents. This has potential implications for startups that have built retrieval augmented generation around OpenAI's chatGPT. It may require them to reevaluate their strategies if they heavily relied on private sources for retrieval.

The Rise of the GPT Store

During the Developer Day event, Sam Altman introduced the GPT Store, a platform where developers can create value and monetize their customized chatGPT applications without writing code. This opens up new possibilities for early-stage companies offering similar capabilities. Although it poses a threat to their current offerings, these companies can pivot their products to leverage the GPT Store, potentially expanding their customer base and enhancing their revenue streams.

The Importance of Strong Business Models

While OpenAI's announcements have undoubtedly created disruption and raised concerns among many startups, it's important to remember that the success or failure of a startup goes beyond the availability of a specific technology. Weak business models will still struggle to thrive, irrespective of the advancements made by OpenAI. Therefore, it becomes crucial for startups to assess their offerings, value proposition, and overall market-fit to ensure they can withstand competition and adapt to changing dynamics.

Creating a New Industry Instead of Killing One

Contrary to popular belief, OpenAI's developments may not be the death knell for startups, but rather the birth of a new industry. By providing developers with the opportunity to build and sell additional layers on top of OpenAI's models, they open up new avenues for innovation and entrepreneurship. OpenAI's move towards the consumer space also presents exciting prospects, as developers can tap into the growing demand for consumer products powered by artificial intelligence.

The Future of OpenAI and the Startup Ecosystem

OpenAI's Developer Day event has unveiled a range of new possibilities and features that have the potential to reshape the startup landscape. From the Assistant API to the multi-modal capabilities encompassing vision and text-to-speech, OpenAI's developments offer developers a more powerful and versatile toolkit. While there are concerns about the impact on early-stage startups, this event ultimately opens doors to innovative products and solutions, creating a synergistic relationship between OpenAI and the startup ecosystem.


OpenAI's recent announcements certainly raise questions about the survival of startups relying on open-source models. However, it's essential to look beyond the immediate challenges and consider the broader opportunities that OpenAI's advancements bring to the table. By leveraging the GPT Store, exploring new business models, and capitalizing on the developer-friendly tools, startups can adapt and thrive in this evolving landscape. OpenAI's developments have the potential to not only disrupt but also fuel the growth of the startup ecosystem, ushering in a new era of innovation and possibilities.

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