AI tools a $90 billion market already, developers look for better solutions than OpenAI
The AI market is already worth nearly $90 billion today and is expected to grow by another $10 billion in the next three years. While OpenAI’s GPT-4 based tools are very popular, developers are already looking for better alternatives that work faster.
For software developers seeking to capitalize on an estimated $90 billion market for artificial intelligence, Microsoft-backed OpenAI is no longer the only business in town.
More than a dozen startups and investors said they are embracing competitors to industry leader OpenAI, casting a shadow on expectations that Microsoft and OpenAI will dominate the young field. They are motivated by a fear of relying on a single company, a desire for models tailored to specific tasks, and the opportunity to cut costs.
Some software developers’ move towards alternative AI foundation models demonstrate how the next episode of generative AI – described as technology capable of generating text, images, or other media in reaction to cues – might play out.
OpenAI will not be the only choice
Insight Partners’ AI investor George Mathew liked the AI foundation models to other technological breakthroughs that created competition. Foundation models are AI systems that have been trained on huge amounts of data and can learn to perform a range of jobs.
“Did we have only one internet service provider?” Mathew stated. “Similarly, multiple foundational model providers will be required for a healthy functioning ecosystem.”
“The current head start that OpenAI has will not make it the only choice,” he added.
Tome, an AI storytelling company that helps users create slides quicker, was founded on GPT-3, an OpenAI base model published in 2020. Tome announced this month that it had reached 3 million members and had begun experimenting with other methods.
It has added a text model from OpenAI competitor Anthropic to the mix and intends to transition from DALL-E, OpenAI’s picture generation model, to Stable Diffusion, an open-source model developed by Stability AI.
According to Keith Peiris, Tome’s CEO, the aim is to discover the model that works best for each action with the least amount of delay and the highest quality.
According to AI developers and investors, there is a new industry agreement to reduce dependence on a single model in order to provide more dependable services, reduce costs, and capitalize on the specialization of various models.
After its ChatGPT chatbot found many with its ability to answer complicated queries in clear, grammatically correct English that looks human, OpenAI became a ubiquitous brand. It has received a $10 billion investment from Microsoft, as large competitors such as Alphabet Inc’s Google, as well as smaller firms, race to develop new models.
By many measures, OpenAI’s recently released GPT-4 model remains the most potent.
A boom market
According to PitchBook, the market for creative AI is anticipated to reach $98.1 billion by 2026.
Foundation models have garnered the most funding from venture funders and strategic investors as the foundational component of AI apps. How these foundation models are used by apps that pay for the services is important for players such as OpenAI, which has stated that it aims to generate $1 billion in income by 2024.
This year, OpenAI expects to generate $200 million in income. As an illustration of how it generates money, it costs 6 cents per 1,000 prompt tokens in its newest GPT-4 plan and has a ChatGPT subscription option that charges users $20 per month.
Startups are also concerned that Microsoft will compete with its AI clients as it integrates OpenAI models into products ranging from search to Office Suites.
“Some of these applications will use sensitive company data, and the foundation models will see these companies’ interactions with their own customers,” said Mike Volpi, an associate at Index Ventures, which backs OpenAI rival Cohere. “Many of these companies will be wary of being reliable on Microsoft or a company controlled by Microsoft.”
Looking beyond OpenAI’s GPT models
According to CEO Dave Rogenmoser, writing helper Jasper.ai started with OpenAI models but doesn’t want to depend on a singular model. It has added Cohere and Anthropic, two other major language model businesses with cloud computing agreements with Google, and is introducing an AI engine to assist marketers in customizing voices by combining models.
Others have looked to alternatives only because OpenAI is having difficulty keeping up with the increasing demand.
“OpenAI’s systems are frequently down. “We want our users to have a better experience, and using multiple models enables us to process inquiries at a lower cost,” said Srinath Sridhar, CEO of Regie.ai, a writing helper that serves the sales team.
To be sure, some companies, such as customer-service software company Intercom Inc, remain committed to OpenAI. Intercom’s head of machine learning, Fergal Reid, admitted that OpenAI’s GPT-4 is “very expensive.” “We currently believe we need to use GPT-4 to get the level of accuracy we need for customer service,” he added.
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