OpenAI CEO Sam Altman made a small change to ChatGPT that warned many founders that they’re on shaky ground.
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OpenAI updated ChatGPT so it can ‘read’ PDFs for you.That threatens a bunch of startups that sprang up to do exactly this.One founder building ChatGPT add-ons says he’s “bracing” for other changes from OpenAI.
It’s a rule most tech founders and developers know: Building on another company’s tech can make your life easier. It’s also super risky.
Little-guy developers building complementary services to OpenAI’s ChatGPT chatbot have just found this out the hard way.
As of this week, OpenAI allows paying ChatGPT users to upload PDFs to the chatbot and get it to do the hard work of unearthing the most important bits of the files.
As several techies noticed, that’s pretty much killed off a bunch of startups that build “ChatGPT wrapper” apps that did precisely that.
They’re not alone. Since the launch of ChatGPT, enterprising developers have built add-ons for the chatbot using OpenAI’s APIs. Other wrapper apps can create ad copy, sales materials, and social media posts.
OpenAI CEO Sam Altman.
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But OpenAI’s update poses a question: Is it worth it if the much bigger, better-funded company you’re building on just….takes your idea?
Dominik Lohle, senior investment manager at HTGF, understands the appeal of founders wanting to build businesses on top of the AI foundations of others.
A startup or developer can get a paid product out quickly by using someone else’s complex large language model.
“In the long term, however, they are threatened by this very fact, as it is to be expected that Open AI, Google and others will certainly align their own development roadmap of future features with the success of the respective wrapper apps,” he said.
The Sider.ai app is owned by Boston-registered company Vidline. It introduced a feature called ChatPDF in March that lets users upload PDFs to the chatbot for a basic fee of $10 a month.
When contacted by Insider, Vidline CEO Joel Liu said his company is “not looking to point fingers,” but “had a hunch” a few months back that OpenAI might follow suit with a PDF update to ChatGPT.
“As a small startup among other Chat PDF service providers, we understand that chatting with files like PDFs is a natural progression for their chat experience,” Liu told Insider, referring to the OpenAI update.
“Despite a solid growth trajectory, we’re bracing for the impact of OpenAI’s updates,” he added.
Like any founder worth his salt, he is exploring other ideas — adding other, innovative options and the ability to work with different AI models such as Anthropic’s Claude. He also plans to integrate ChatGPT into Sider.ai’s web browser extension, which he says has been downloaded by 2 million users.
Damon Chen, founder of PDF.ai, wrote on X after OpenAI’s update to say that he was “optimistic” about the future of his company, which launched in May. He believes OpenAI won’t implement more niche PDF-related add-ons.
Still, Nvidia’s senior AI scientist Jin Fan thinks it isn’t worth the effort.
“Before your adrenaline rush for a shiny startup idea, ask yourself this: Can OpenAI/Anthropic/Microsoft add this feature with 3 engineers in a hackathon?” he wrote. “The number of “yes” to the above is astounding. Happy Halloween in the thin wrapper graveyard.”
It’s likely OpenAI will add more features to ChatGPT, weeding out more add-on apps that can’t differentiate themselves.
As one anonymous venture capitalist, who has backed a ChatGPT wrapper startup put it to Insider: “Just wait until ChatGPT has an outage and see which emperors have no clothes.”