OpenAI investors see more startup opportunities despite ChatGPT expansion

(Reuters) – OpenAI’s announcement on artificial intelligence “apps” do not spell the death knell for nascent startups building AI products, two OpenAI investors said at a Reuters NEXT conference on Thursday.

Investors are still hunting for new AI products that could help consumers interact better with the technology and address deep tech issues such as brain computer interface, they said.

The owner of the wildly popular ChatGPT chatbot earlier this week unveiled a marketplace that allows users to access personalized AI “apps” for tasks like teaching math or designing stickers.

The news sparked fear among AI startup founders who worry they will not be able to compete with OpenAI, which is trying to build an AI empire with products aimed at both consumers and enterprises.

“There’s so much room for continued innovation in AI. We’re in an intermediary step in a decades-long revolution,” Konstantine Buhler, partner at Sequoia Capital, told the conference. “You can play a very big role in how this is shaped.”

Sequoia invested in OpenAI in 2021, the maker of ChatGPT, in which Microsoft also has a larger stake.

Avery Klemmer, partner at Thrive Capital, which recently increased its investment in OpenAI, also said she sees opportunities for the rise of consumer applications beside ChatGPT.

She expects more innovations based on the existing format of AI chatbots popularized by ChatGPT.

“I think there will be really novel formats and forms of engagement that get invented,” Klemmer said.

Despite recent frenzied investments into the technology by companies and venture capital firms, analysts and investors say development of AI products is still in the early stages.

While it’s still relatively expensive to build applications using large language models, the accelerated pace of research in the space could result in a rapid decline in the cost of AI inference, or using an AI model to make predictions, and inspire new products, Jill Chase, partner at CapitalG, told Reuters NEXT.

“The cost of inference coming down so dramatically may seem like a small thing, but it’s hugely impactful for what types of businesses can be created and what use cases incumbents can empower,” she said.

(Reporting by Krystal Hu in New York; Editing by Sayantani Ghosh and Deepa Babington)