OpenAI Asks Investors Not To Back Rival Startups Such as Elon Musk's xAI (ft.com) 52
Financial Times has more details on the new fundraise closed by OpenAI. From the report: OpenAI has asked investors to avoid backing rival start-ups such as Anthropic and Elon Musk's xAI, as it secures $6.6bn in new funding and seeks to shut out challengers to its early lead in generative artificial intelligence. [...] During the negotiations, the company made clear that it expected an exclusive funding arrangement, according to three people with knowledge of the discussions. Seeking exclusive relationships with investors restricts rivals' access to capital and strategic partnerships. The move by the maker of ChatGPT risks inflaming existing tensions with competitors, especially Musk, who is suing OpenAI. Venture firms are party to sensitive information about the companies they invest in, and close relationships with one company can make it difficult or contentious to also back a rival. But exclusivity is rarely insisted on, according to VCs, and many leading firms have spread their bets in certain sectors. Sequoia Capital and Andreessen Horowitz, for instance, have backed multiple AI start-ups, including both OpenAI and Musk's xAI.
Wut? (Score:4, Interesting)
I'll let you give me your money, if you agree to my terms?
Is that a thing with VC nowadays?
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It's a question of supply and demand. There's an overabundance of money fleeing most IT sectors and into generative AI. And OpenAI has a significant advantage in proven tech, proven teams and proven track record as a successful trail blazer in the field. So supply of suitable investment targets is constrained on the top, demand to invest in such companies is abundant. So supplier gets to set terms.
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I don't think Altman's dick is long enough for there to be any left for me, considering all the investors lining up with money to do it first.
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If it's required, it's probably illegal. If it's merely a strong suggestion, it's probably legal by itself, but could be a court problem if combined with other anti-competitive moves.
May those with the best funding win (Score:5, Insightful)
Seeking exclusive relationships with investors restricts rivals' access to capital and strategic partnerships. The move by the maker of ChatGPT risks inflaming existing tensions with competitors, especially Musk, who is suing OpenAI.
In other words they'd like to compete based on the patience of their investors and not the merits of their tech.
the free market at work (Score:2)
Apparently having the self-declared most brilliant minds in the world is not enough, Altman needs to monopolize funding as well. Does Sam Altman fear a free market?
Re:the free market at work (Score:5, Insightful)
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Surely an explicit call for monopolistic lending will raise an eyebrow <somewhere>
Re:the free market at work (Score:4, Insightful)
If OpenAI were a monopoly, then such a call would likely raise eyebrows.
If OpenAI were not, then it wouldn't at all. Exclusivity is normal in a functioning market. It's however illegal in a monopolized one.
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Between OpenAI and Microsoft (OpenAI bedfellow), they control 70% of the market in foundational generative LLM paid services.
https colon slash slash iot-analytics.com/wp/wp-content/uploads/2023/12/Generative-AI-models-and-platforms-market-share-2023.png
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If they were to collude to control the marketplace, that would be flat out illegal.
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Lawyers fucking everyone (*) from all sides. Woohoo!
(*) not themselves of course
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"a lot" is a subjective qualifier that is utterly meaningless.
I'd try harder not to let certain popular CEOs influence your opinion with their self-marketing.
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Apparently having the self-declared most brilliant minds in the world is not enough, Altman needs to monopolize funding as well. Does Sam Altman fear a free market?
Sam Altman wants all of everything. He wants all the funding. He wants all the data. He wants all the Earth's resources poured into his little attempt at computer god, because his computer god is going to save the universe from all the bad shit we've done to it. Or some such nonsense.
Sam is the posterboy for greed today. And OpenAI is the manifestation of that greed. Suck up everything into one system and it's bound to pay off. Right? RIGHT?
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Pin-apathy, that means you!
For once... (Score:2)
.. I hope they sue each other and the only people to profit are the lawyers.
Re:For once... (Score:5, Funny)
Do you want to invest in my AI lawyer startup?
War of entrenchment (Score:3)
That sounds criminal... (Score:1)
No surprise though.
JUST a bit outside, Bob Uecker. (Score:5, Funny)
"OpenAI Asks Investors Not To Back Rival Startups Such as Elon Musk's xAI "
I agree with them halfway. Now if their investors would just not fund OpenAI either."
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"OpenAI Asks Investors Not To Back Rival Startups Such as Elon Musk's xAI "
I agree with them halfway. Now if their investors would just not fund OpenAI either."
That's not going to happen, AI isn't going away. What I hope happens is that we get as many damn competitors for OpenAI that they lose count of them because however much assholes like Sam Altman harp on about how they thrive on competition they actually hate the crap out of it, what they dream of is a monopoly.
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I'll take my meds if you also take yours.
Real? (Score:2)
"...Elon Musk's..." Because the man is just so damn rotten to the core. That's the only real issue I have with him and his companies.
Your definition of "real" needs adjustment.
Good luck with that ... (Score:2)
First off it smacks of desperation and an admission that the closest thing to a moat is the money needed (at least if following in the footsteps of OpenAI).
Secondly, it seems their main competitor may well be Anthropic, who are continuing to raise money successfully, including from the likes of deep pocketed Google and Amazon to who they are a strategic partner.
Thirdly, most of their competition at the end of the day is going to be the giants like Meta, Google and Microsoft who don't need external funding,
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If available, OpenAI could then have run their decision to publicise their anti-competitiveness via the model :-)
Ask the LLMs \o/ (Score:1)
ChatGPT:
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ChatGPT:
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Which LLM provides the most balanced and informative response to your eyes?
Isn't that a massive antitrust violation? (Score:4, Insightful)
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"...the land of the free(*)..."
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(*) Terms and conditions apply
Illegalville (Score:4, Insightful)
Let's see first they converted a non profit into a for-profit .. now they blatantly ask (force?) people not to invest in xAI.
Do these guys have lawyers or what? Can't they use that AI lawyer? Ask chatgpt?
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How ironic (something else?) it will be when another AI company destroys them with orders of magnitude less investment.
Uhhhhh (Score:2)
Each day sheds a little more light... (Score:1)
Re: Each day sheds a little more light... (Score:2)
Bad financial advice (Score:2)
Please invest all in us and not across our competitors, says no sane CFP ever!
Anti-competitive? (Score:2)
Isn't this illegal on some level? Seems blatantly anti-competitive.
Non-profit shouldn't be allowed to own for-profit. (Score:2)
Our non profit status requirements for corporations needs a major fix, and by that I mean a complete overhaul.
All your money are belong to us (Score:2)
Investors 5 years from now :
Sam set us up the bomb!
is there a monopolistic practices rule for funding (Score:2)
If a business tries to tell its customers that they can't shop elsewhere or they'll cut them off, that's absolutely grounds for antitrust prosecution.
I get that's it's obviously a different context, but is there something like that for the funding side? I mean, a company is technically 'selling' those shares in investment, no?