The End of Basic RAG Business Models?
This week, OpenAI released the ability to build custom GPT models that can ingest documents and connect to APIs. This effectively kills the basic business model for startups building Retrieval Augmented Generation (RAG) apps, as users can now easily create custom AI agents themselves. Startups need to pivot to find viable niches or provide services around these new OpenAI capabilities.
OpenAI’s Content Backdoor
The custom GPT feature allows OpenAI to access the documents and conversations users upload. This backdoor lets OpenAI bypass legal and technical barriers to ingest otherwise hard-to-reach content. It’s similar to how Amazon leverages its Marketplace sellers to identify popular products to sell directly.
Tapping into Data Silos
Many companies have valuable data trapped in legacy systems or siloed tools. While integrating these into ChatGPT is challenging, the hype around AI could push companies to connect internal data anyway. OpenAI is already offering private enterprise GPT models. If OpenAI can build easy-to-use integration and process design tools, many applications could end up powered by OpenAI.
Risk of Monopoly and Ensh_ttification
If OpenAI becomes the default LLM platform, it may be difficult for competitors to differentiate. By capturing app developers and users, OpenAI could create high switching costs and network effects. This could allow them to extract more value through pricing, ads, etc. However, tech giants like Microsoft and Amazon could still disrupt OpenAI’s ambitions. The AI landscape is evolving rapidly, so OpenAI’s dominance is far from certain.
Source: bolddata.org
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