OpenAI’s latest update to its ChatGPT chatbot has sent shockwaves through the tech startup community. The update allows paying ChatGPT users to upload PDFs to the chatbot, eliminating the need for startups that have built “ChatGPT wrapper” apps to perform this function.
Building on existing technology has always been a double-edged sword for tech founders and developers. While it can simplify the development process, it also exposes them to the risk of being overshadowed the larger companies that provide the foundational technology.
Since the launch of ChatGPT, developers have been quick to leverage OpenAI’s APIs to create add-ons for the chatbot. These add-ons include generating ad copy, crafting sales materials, and creating social media posts. However, OpenAI’s update raises the question of whether it is worth building on a platform that can potentially “steal” your ideas.
Dominik Lohle, a senior investment manager at HTGF, acknowledges the appeal of building businesses on top of AI foundations provided companies like OpenAI. Using someone else’s complex language model allows startups to release paid products quickly. However, Lohle cautions that the success of wrapper apps depends on the long-term alignment of development roadmaps with the parent companies.
The impact of OpenAI’s update is already being felt startups like Sider.ai, which introduced a feature called ChatPDF in March. Sider.ai CEO Joel Liu expressed his understanding that PDF functionality was a natural progression for chatbots but acknowledged the potential consequences of OpenAI’s update.
Startups in this space are now exploring other options to keep their businesses afloat. Liu plans to integrate ChatGPT into Sider.ai’s web browser extension and work with different AI models, such as Anthropic’s Claude.
Despite the challenges, some founders remain optimistic about the future. Damon Chen, founder of PDF.ai, believes that niche PDF-related add-ons won’t be implemented OpenAI. However, Nvidia’s senior AI scientist Jin Fan warns entrepreneurs against investing in ideas that could easily be replicated the larger companies with minimal effort.
It is clear that OpenAI’s continuous updates to ChatGPT will continue to reshape the landscape, forcing startups to differentiate themselves or risk becoming irrelevant. The true test will come when the chatbot experiences an outage, revealing which startups have the substance to survive independently.
As the tech startup community braces for the impact of OpenAI’s updates, it remains to be seen how resilient these companies will prove to be in the face of competition from the parent company. Only time will tell if their innovative ideas and unique offerings can withstand the test of time.