Changing ChatGPT may have destroyed a bunch of AI startups

• ChatGPT can now interact with PDF files and lets you ask questions about them.
• Such changes could alienate startups that make “wrappers” for AI-powered chatbots.
• It’s a grim reminder that rapid rule changes by big tech companies can hurt smaller players.

an act OpenAI Just kill a bunch of startups by doing a simple update to ChatGPT? Investors and founders will soon find out.

Sam Altman Company introduced a new experimental feature for ChatGPT Subscribers on Sunday, allowing them to download PDF files. The chatbot analyzes the files and allows users to start asking questions about them.

Anyone who has tried to scroll through hundreds of pages of PDF files to pull out useful data and compile information will know how tedious it can be. This makes the update so great ChatGPT Plus users.

The update also creates a broader problem.

Some startups have built their businesses around ChatGPT’s lack of interactivity with PDF files. Now that ChatGPT These other startups can interact with them, what can’t ChatGPT offer?

The simple answer may be nothing.

“AI-focused startups” face a reckoning

Sahar Moore, Product Manager at Payments Giant Stripe, He wrote on LinkedIn That “OpenAI just implemented a move that will wipe out dozens of AI companies.” He specifically referred to “clustered startups.”

These are essentially startups that “wrap” around an API like ChatGPT, using the underlying technology underneath the chatbot to provide some sort of service that’s not available directly from that API.

Founders building AI cluster businesses don’t have to do so to exploit a vulnerability in ChatGPT. In March, OpenAI threw the doors open to developers Integrate ChatGPT into their applications and products.

This means that startups offering PDF functionality aren’t the only covers in town. There is a whole range of them that serve all kinds of uses.

Perhaps the most notable cover to date was Jasper AIwhich entered 2023 with a valuation of $1.5 billion, with Supported by major VC players Such as Coatue and Bessemer Venture Partners.

What did you do to get this lofty rating? I created an “AI Assistant” specific to the needs of enterprise marketing teams with Detour OpenAI’s GPT model.

It’s an idea that appears to be struggling, with the company lowering its internal rating. Information reported. It is too He announced layoffs in July.

Startups that compromised user interactions with PDF files by going around tools like ChatGPT may wonder if they face a similar fate.

Here is one example. In May, Data Scientist Alex Reibman announced ChatOCRa ChatGPT plugin that “reads text from PDF files, including scans and handwriting.”

After updating ChatGPT over the weekend, he said: Conducted a poll on X Which asked users what would happen to its plugin “now that ChatGPT has integrated PDF processing.” Of the 210 respondents, 72.4% said they expected to “see less usage” of the plugin.

The bottom line is that without a moat that makes them significantly different from competitors, startups are at risk of being ripped off.

Investors need to start thinking about whether they have placed big bets on the wrong horse.