OpenAI’s existential questions | JS

OpenAI has been prominently featured in recent news, whether related to its acquisitions, competition with Anthropic, or larger discussions about AI’s societal impact.

In the latest JS Equity podcast episode, Kirsten Korosec, Sean O’Kane, and I recapped the recent developments at OpenAI. While the company’s recent acquisitions appear to be classic acqui-hires, Sean proposed that they also address “two big existential problems that OpenAI is trying to solve right now.”

OpenAI’s acquisition of the personal finance startup Hiro suggests that the company might be looking to develop a product with “more hooks than just a chatbot, and maybe something worth paying more for.” Additionally, the acquisition of new media startup TBPN could be an effort to “better shape its image in the public eye, which lately has not been great.”

Below is a preview of our conversation, edited for length and clarity.

Anthony: There are two notable deals: OpenAI has acquired Hiro, a personal finance startup. This follows another recent announcement during our last Equity episode recording: OpenAI also acquired TBPN, a business talk show and new media company.

Both of these deals are relatively small compared to OpenAI’s scale. They aren’t expected to significantly alter the company’s business course, but they indicate an ongoing willingness to “try out different things.”

The TBPN deal is particularly notable as it comes at a time when OpenAI seems to be focusing on making ChatGPT and its GPT models highly competitive in an enterprise setting for programmers.

Should a tech talk show be a priority on their to-do list?

Kirsten: No, it shouldn’t be a priority. That’s all.

I’d like to highlight Hiro because it’s intriguing. Julie Bort, our talented venture editor, was the first to report on it. Her investigation suggests this is an acqui-hire. The company is shutting down, indicating that by a certain date, access will no longer be available.

This startup, Hiro, is focused on personal finance and was launched only two years ago. This acquisition seems to be about acquiring talent. I’m curious if OpenAI will just integrate them into the organization or if they have plans for a personal finance product. It’s not clear to me.

Sean: I view both acquisitions as acqui-hires to some extent. TBPN’s acquisition allegedly involves retaining editorial independence for the daily show. Kudos to the team for establishing and expanding it so rapidly.

However, media-savvy individuals should be cautious about the claim of “editorial independence.” When media entities are acquired and placed under the umbrella of public policy or marketing within a larger organization, merely stating “editorial independence” doesn’t guarantee it.

Both acquisitions, while similar in nature, highlight two major challenges OpenAI is addressing.

Hiro’s acquisition relates to OpenAI’s successful ChatGPT product. A significant question is whether it can generate enough revenue to become a sustainable business without relying on massive private funding rounds. OpenAI also seems to be struggling to maintain its edge in the enterprise sector, where the real financial opportunities lie. Hiring this team could be an attempt to explore new possibilities.

The founder of Hiro has a history of creating consumer apps, suggesting a bet on their ability to develop something beyond a chatbot with more value.

The TBPN acquisition appears to be an effort to better communicate the company’s mission and improve its public image, which has been problematic. This comes amid increased scrutiny following Ronan Farrow’s report in The New Yorker, which coincided with these and other OpenAI announcements.

These acquisitions reflect two significant issues OpenAI is currently addressing.

Kirsten: What hasn’t been mentioned is Anthropic’s growing presence. They’re highly successful in the enterprise sector.

These companies are competitors, but they have distinct identities. Anthony, do you see them as direct competitors to OpenAI, or are they carving out their own niche in the enterprise market, allowing both to coexist without directly competing, aside from talent acquisition?

Anthony: I believe they are in direct competition. If the AI industry achieves the success its advocates envision, both companies could thrive as the leading players. One’s success doesn’t necessarily mean the other will disappear.

Although unofficial, reports suggest OpenAI is particularly concerned about Anthropic’s rise.

Our reporter Lucas [Ropek] covered the HumanX conference, where attendees acknowledged ChatGPT but were more focused on Claude Code. This is a concern for OpenAI.

There are many potential opportunities for generative AI, but the primary growth area, where significant revenue is possible, lies in enterprise and coding tools.