The European tech community is buzzing with anticipation as the OpenAI drama unfolds across the pond. It’s like watching a thrilling series on television, with events resembling a Greek tragedy playing out before our eyes. While Europe may not have as many large-scale AI startups as the US, there are still a few contenders like Germany’s Aleph Alpha and France’s Mistral that have caught our attention.
Drama and Fallout
The OpenAI saga has sparked fear and uncertainty among European investors, who are anxiously awaiting the latest updates. Many tech observers, particularly venture capitalists, are hesitant to go on the record, fearing the wrath of the AI gods in Silicon Valley. However, some industry insiders believe that this drama could have positive effects on Europe’s nascent AI sector.
Opportunities for European Startups
One UK-based investor suggests that the OpenAI drama could benefit startups like Mistral, as they may have the opportunity to poach talented employees and catch up with OpenAI. While this may not bring major changes in the short term for AI companies built on OpenAI, it could lead to market homogenization, especially if OpenAI loses direction and focus.
Another investor compares OpenAI’s downfall to the infamous WeWork debacle, but notes that at least no proper venture capitalists are involved in this particular drama. The mix of nonprofit and for-profit elements in OpenAI’s structure has left many confused about how the organization operates.
Impact on Term-Sheet Negotiations
A European VC predicts that the events at OpenAI will have implications for all term-sheet negotiations. Founders may become more resistant to board control over CEO replacements and other similar terms, questioning why they should assume they won’t face the same fate as Sam Altman. This could lead to a shift in power dynamics and more autonomy for startup founders.
Reliance on OpenAI
Many European applied AI startups heavily rely on OpenAI’s platform, which is considered superior to most alternatives. However, the turmoil at OpenAI is pushing the business closer to Microsoft, potentially causing significant implications for companies outside the Microsoft ecosystem that depend on OpenAI. The situation is likened to the disruptive API changes experienced by platforms such as Facebook and Twitter.
European Regulation and AI Champions
Some express frustration with heavy-handed European regulation and call for the development of more local AI champions. They believe that relying on government intervention is not the solution and emphasize the need for Europe to produce its own AI leaders. The clock is ticking, and the time to act is uncertain.
Time to Breathe and Re-calibrate
Amidst the chaos, some see a silver lining for European startups. The turmoil provides them with a much-needed breathing space and an opportunity to recalibrate before the next shockwave hits. This brief respite could be invaluable for European gen AI startups.
Concerns about Access and Fair Pricing
DN Capital co-founder and managing partner Steve Schlenker raises concerns about access to the world’s most successful Language Models (LLMs). He fears that startups outside the US, including those in Europe, may lose access to these LLMs as screening processes are established by organizations like OpenAI. Additionally, if top talent from OpenAI becomes full-time employees of mega-companies like Microsoft, the accessibility and affordability of AI technology could decline rapidly.
The Drama Unfolds on Social Media
One Warsaw-based VC finds excitement in the fact that much of this “shit show” is happening publicly on social media, particularly Twitter. They highlight the stark contrast between Europe and the US in terms of transparency and openness in discussing such matters.