It’s clear that the launch of ChatGPT was the iPhone moment of the 2020s. I am very very bullish on OpenAI and I believe it will be a company that creates multi-trillion dollars of value. Its ownership structure is a bit complicated as it was structured as a capped-profit company. Namely, if it does generate trillions of dollars of profits, most of the profits will be shared with the public. It’s yet to be seen how this will play out but I appreciate OpenAI’s intention. (I have zero financial interest in OpenAI except I will be a recipient of the shared wealth as a member of the public.) I hope OpenAI will be the next Vanguard, whose member owned business model turns out to be the best non-profit/capped-profit I have ever encountered. OpenAI has a fairly small team with ~300(?) people but the people I know who work there are mission driven people. It feels a bit like the early days of Facebook and I am so excited with what they will build in the coming decades.
As an early stage investor, I have also been thinking about how to invest in AI in the current landscape. I am not too keen on startups who try to build large models like GPT-4. Even if they have the right talent, it will be very expensive to do that. But I think there are areas where startups can leverage GPT-4 to make killer applications. Two areas I am particularly interested in are:
Proprietary Datasets: companies that possess proprietary datasets and expertise can align the GPT-4 to particular objectives. It appears that GPT-4 uses similar ideas described in this InstructGPT paper to optimize for particular goals. I believe OpenAI also offers its enterprise clients a custom reward model and a custom reinforcement learning policy. Companies can load in their specialized datasets and train models for powerful specialized applications. For example, a specialty model that can summarize, highlight important information and raise red flags from SEC filings and in turn measure risks of public companies effectively. In fact, I have invested in a company that does that exactly that: Bedrock AI
Action Loop: OpenAI recently launched the ChatGPT plugins that can trigger actions directly. There are many applications for these. For example, someone can build an AWS bot to do DevOps work that we all hate to do. I can ask the AWS bot to set up a Lambda function on AWS. The bot will write the function and test it with a few examples. Once the code is bug free, it then launches it on AWS. If it encounters any IAM permission errors or has other dependencies, it will figure out the right permissions or setup, ask you to approve and make it work on the spot. There are tons of opportunities in this area and ChatGPT plugins are basically AppStore for the 2020s. I am so excited about it.
If you are a startup founder and you are working on the above, please DM me. I would love to chat more and see if there’s any way to collaborate through investments or/and mentorship.