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Spokane, Washington  Est. May 19, 1883

OpenAI unveils ambitions to compete more directly with Big Tech

OpenAI CEO Sam Altman is shown in Washington, D.C., ahead of a meeting with business leaders and legislators in September.  (Tom Brenner/For the Washington Post)
By Gerrit De Vynck Washington Post

SAN FRANCISCO – Artificial intelligence start-up OpenAI laid out an ambitious vision for expanding its business selling directly to consumers, unveiling Monday an app-store-like marketplace where users will get paid for making chatbots on the company’s technology.

Paying users for the best chatbots evokes the way YouTube built its multi-billion dollar empire by sharing ad and subscription revenue to incentivize people to make videos on its site. Open AI envisions people spending more time directly in its own app, building their own tools and using those made by others.

The announcement came during an event OpenAI held for software developers who are building their own products using its AI.

The “GPT Store,” as the company calls it, is the clearest indication yet that OpenAI intends to expand its consumer business to compete with Big Tech companies, rather than serve as a provider of back-end technology for other companies or be the AI brains behind Microsoft, which has a multibillion-dollar deal for access to OpenAI’s tech.

“This is the way this goes into peoples lives,” OpenAI CEO Sam Altman said at a press conference.

The move is also a clear sign that OpenAI is looking to diversify the ways it generates revenue.

As OpenAI expands its own consumer-facing products, it could compete directly with some of its own customers, many of whom are start-ups that build tools on top of the company’s tech.

More than 2 million developers are using OpenAI’s tools to build their own AI products and businesses, and more than 92 percent of Fortune 500 companies are using OpenAI, the company said. About 100 million people used ChatGPT every week, it said.

The numbers are the first public confirmation from OpenAI that it has tens of millions of people using its tools every day, though the company did not disclose how many of them are paying for the company’s premium ChatGPT Plus service.

In a sign of great interest, OpenAI’s developer conference took up multiple floors of a large event space in downtown San Francisco, spilling onto the roof where a breakfast spread of burritos and avocado toast, complete with a separate table featuring multiple hot sauces, awaited the hundreds of attendees lining up outside to get in. Those who weren’t able to score a coveted invitation to the event gathered at so-called “watch parties” at separate corporate offices to keep tabs on the live stream.

OpenAI CEO Sam Altman took the stage to cheers from the several hundred developers who made it into the event. Attendees strained to take cellphone videos and applauded at nearly every separate announcement the company made, evoking the scenes of Apple’s famous launch events for early versions of the iPhone.

“If you give people better tools they can change the world. We believe AI will be about individual empowerment,” Altman said after showing off the GPT Store and explaining how people without technical backgrounds could make their own niche AI assistants. “We will all have super powers on demand.”

Generative AI, a term that encompasses the wave of chatbots and image-generators that have swept the tech world over the past year, has spurred a frantic race to find ways to make money off the technology.

Big Tech companies have pushed chatbots into their existing products, often launching the tools before they are ready. Start-ups have sprung up to try to make tools of their own, usually paying for access to OpenAI or other AI companies’ technology and infusing them into their own products.

But despite billions of dollars in investment from Big Tech and venture capitalists, few products have been moneymaking hits, and it’s unclear what impact generative AI will have on businesses and the economy.

In June, internet research firm Similarweb reported that fewer people were visiting the ChatGPT website than had been earlier in the year, but now that number is growing again and nearing the peak it hit in April, potentially because students in North America and Europe are back from summer vacation.

There were 1.5 billion visits to the ChatGPT website in September, compared to 1.7 billion in April, Similarweb said in an Oct. 30 report. Google’s ChatGPT competitor Bard’s website saw far fewer visits, with 219.3 million in September, according to Similarweb, although that number has been growing rapidly as well.

OpenAI is on track to make $1.3 billion in 2023, tech news site The Information reported in October. Much of that money is coming from other companies that are paying OpenAI for access to its tech so that they can build their own products on top of it. Many of them are venture-capital-funded start-ups that have yet to begin selling products.

“Hundreds of millions” of dollars of OpenAI’s total revenue comes from individual subscriptions to its consumer product, ChatGPT Plus, according to a person familiar with the company’s finances who spoke on the condition of anonymity to share private information.

As part of its Monday event, OpenAI also announced it is cutting prices for developers who use its tools, and increasing the capabilities of its most advanced GPT4 AI model. It also said it would begin paying legal fees for business customers who are sued for copyright infringement when using its tools.

OpenAI’s models are trained on data pulled directly from the internet, though the company does not say what exactly has gone into its latest chatbots.

Artists, authors, musicians and other creative professionals have begun suing the company and its competitors, arguing that their copyrighted work was used without their permission.

The companies have pushed back, saying that their use of data from the internet falls under “fair use” – a concept in copyright law that creates an exception if the material is changed in a “transformative” way.