Beware AI Startups, OpenAI Can Take You Out Anytime

OpenAI updated ChatGPT to include PDF services over the weekend, according to user reports. Several AI startups built themselves around PDF analysis to be used as an add-on to ChatGPT, but OpenAI’s latest update may have just rendered these startups useless.

“OpenAI just executed a move that will wipe out dozens of AI companies,” wrote Sahar Mor, product Lead at Stripe in a Linkedin post Sunday. Mor is referring to the “wrapper startups.” Wrappers are essentially add-ons to ChatGPT that allow users to add various features and capabilities, such as PDF analysis, onto ChatGPT’s existing model. They’re typically created by small AI startups that provide functionality not offered by OpenAI.

Other artificial Intelligence executives took to X to vent about the ChatGPT update. “Many startups just died today,” tweeted Alex Ker, the founder of AI incubator, P-ai, on Saturday.

“We’re one of the ‘victims’ hit by this update,” said ChatOCR’s Alex Reibman in a tweet Monday, which also showed a major dropoff in usage following the release of the update.

It’s unclear whether OpenAI’s latest update will truly kill any generative AI startups with its latest update. With funding from Microsoft, OpenAi can easily continue to add new features, like it did with PDF analysis, which could be another startup’s whole business.

OpenAI did not immediately respond to Gizmodo’s request for comment.

The ChatGPT developer is in a particularly good position to weather the Biden Administration’s AI Executive Order, as the largest large language model in the space. Biden’s executive order requires generative AI companies to share safety test results and develop new standards to protect against worst-case scenarios. The largest players of AI, such as OpenAI, Meta and Anthropic, have more resources to handle such requirements, whereas smaller AI startups may be stifled by the regulation.

OpenAi is hosting its Dev Day on Nov. 6, the company’s first developer conference where it will try to wow developers into building new products using ChatGPT.