Can Microsoft dominate AI? Developers look for OpenAI alternatives

Microsoft-backed OpenAI has become the talk of the town since it launched an artificial intelligence-based chatbot, ChatGPT. Many startups and investors are casting a shadow on expectations that Microsoft and OpenAI will dominate the field. They are now shifting towards an alternative AI foundation model. 

George Mathew, an AI investor at Insight Partners, compared the AI foundation models to other technological breakthroughs which spawned competition, according to the news agency Reuters. 

“Did we only have a single internet service provider? In a similar manner, we will need multiple foundational model providers for a healthy functioning ecosystem. The current head starts that OpenAI has will not make it the only choice," Mathew said.

Originally built on GPT-3, AI storytelling startup Tome helps users build slides faster and has hit 3 million users this month. It also started to experiment with other models. 

It has added a text model from OpenAI rival Anthropic to the mix and plans to move from DALL-E, OpenAI’s photo generation model, to the open-source model Stable Diffusion, which is made by Stability AI, Reuters reported. 

AI developers and investors said there is a new industry consensus to reduce reliance on a single model, in a bid to provide more reliable services, rein in costs and take advantage of the specialization of different models.

OpenAI shot to household-name status after its ChatGPT chatbot stunned many with its ability to answer complex questions in clear, grammatically correct language that appears human. It has attracted a $10 billion in investment from Microsoft, as big rivals including Alphabet Inc's Google as well as smaller firms are rushing to create new models.

OpenAI's newly launched GPT-4 model is still the most powerful by many standards.

OpenAI alternatives

The market for generative AI is expected to grow to $98.1 billion by 2026, according to PitchBook. As the infrastructural layer of AI applications, foundation models have attracted the most investment from venture capitalists and strategic investors.

OpenAI has projected $200 million in revenue this year. As an example of how it makes money, it charges 6 cents to process 1,000 tokens of prompts in its latest GPT-4 model and has a subscription tier of ChatGPT that charges users $20 per month.

Startups also worry that Microsoft could compete with its AI customers as the tech giant incorporates OpenAI models into products from search to Office Suites, as per Reuters reported. 

Mike Volpi, partner at Index Ventures, which backs OpenAI competitor Cohere said, “Some of these applications will use sensitive company data, and the foundation models will see these companies' interactions with their own customers.”

“Many of these companies will feel uncomfortable being dependent on Microsoft or a company generally controlled by Microsoft,” Volpi said. 

(With Reuters inputs)