OpenAI and Other AI Developers Begin Implementing New Approaches Threatening Startups

Creators of AI models no longer want to just sell access to them: they are starting to create their own applications and take market share from their clients. This was noted by investor Chamath Palihapitiya, founder of the Social Capital fund, on social network X.

Why selling access has become unprofitable

Palihapitiya pointed out how quickly OpenAI and other labs are adding new features to their chatbots. Previously, such companies mainly sold access to models via API, and others built applications based on them. Now, labs are themselves expanding the functions within their products.

The investor sees the reason in economics. Processing each new token is becoming cheaper and brings almost nothing, so earning from selling access to the model is no longer feasible: the money is now where the finished product is. A token is a piece of text that the model reads or writes, and companies pay for tokens when they connect AI to their services. When the fee becomes negligible, it's easier for labs to create the application themselves and receive all the revenue.

Who will suffer first

The biggest risk is not for large SaaS companies, but for young AI startups: they spend large amounts on lab models and are completely dependent on them. Palihapitiya identified three areas that will suffer before others: legal services, sales tools, and customer support. Labs see how startups use their models, and this data suggests which products are in demand – replicating them is not difficult.

Next in line, according to the investor, are intermediary services that connect models with everyday work programs – documents, cloud storage, email. But labs are already doing this themselves. Palihapitiya gave two examples: editing Google Docs directly in OpenAI products and connecting Google Drive and Google Docs to chats. Both solutions, he said, turned out very well.

For investors, this is a worrying sign: a startup built entirely on someone else's model may at any moment face competition from its own supplier.