open ai Flashcards
technological
advabacemnets in ai hardware
computational power access
rapid ai innovation
“ ai boom”
socio cultural
ethical ai demands
public perception
privacy expectations
increase in demand for computational resources
political / legal
ai satefy regulations
data usage restriticons
NYT lawsuit–> New York Times sued them for taking data without conscent
also was sued by elon musk bc they breached the benefits all of humnaiity statement
copyright infringement issues
data from public sources could cause issues
economic
funding competition
investor expectations
five forces
supplier
- high
- hardware dependency (nvidias GPU)
- cloud services dependence (microsoft azure)
- hard to get the chips
- hardware providers like google, Nvidia made the gpu and TPU
subtitues
- low level, no comparable technologies outside of the ai domain
- gpu are dofferienated and difficult to replace, the market is also very concentrated
threat of new entrants (moderate)
- high barriers to entry like capital requirements of needing a large investment to start off
- established competitors like microsoft google who are big tech companies
- need to have knowledge about the tech
- easy access to distrubtion channels
buyers
- high
- growing alternatives like anthropic , google bard
- limited differentiation
- low switching costs
rivarly
- high number of competitors (deep mind, gemini, microsoft, meta) who have deep investments
- some of the competitors have created ecosystems like google can be linked to google docs so creates switching costs
- moderate product differentiation (most competitors offer similiar funct9onailites )
- low switching costs which creates price competition
- technological advbacemnts (competition for ai model superiority)
key success factors
- strategic partnerships to get the funding necessary
- good technology
- talent acquisition and retention –> need to have people who are very knowledgeable in the field
- financial resources
- innovation
- compliance with regulations
strengths
innovation and tehcnologcual leadership
strategic partnerships–> Microsoft
talent pool–> top talent
global recognition
adapdabiltu–> they keep adapting their model to become better
first mover advantage
weaknesses
governance instability (their organizational structure is not good, fights over chips, employees wanted to leave because of what happened with Altman )
dependence on external infrastructure (depdnece on suppliers)
high costs and over reliance on their partnership
limited financial resources compared to competition
highoperation costs
maybe their mission statement bc they keep having to live up to it
opportunties
ai expansion into new domains
partnerships
vertical integration to create the gpu chips themselves (backward integration)
pursuing artificial general intellergance
threats
intensifying compeittion–> Claude 4 might surpass chat
regulatory challenges
ethical concerns–> ai might surpass human intelligence and pose risks
resource limitations
chip shortage (there was a shortage of GPU chips)
Nvidia was moving more downstream
human resources
open ai mission attracted top talent in the ai field
Ilya sutksever (ex google researcher), he turned down other places to work at open ai
sam altman
financial resources
capital investment from founders and investors (1 bn)
usd 13 bn investment from Microsoft
revenue streams from premium services
partnerships also need funding
began as non profit
organizational resources
flexible organizational design
they restructured from non profit tp a hybrid structure to raise more capital
limited capability to generate financial resources
couldnt make deicisons resulting sam altman
reputation resources
open ai foundational commitment to developing ai for the common good has enhanced its reputation
top talent wanted to come and work for ai
physical
infrastructure for large scale ai training through its partnership with microsoft
technological resources
chat gpt- innovate applications
advanced ai models and algorhtiksm
azure ai for Microsoft
competitive advantages
nonprofit mission : built open ai reputation as an ethical leader in the field
application: chat gpt became a massive success
first mover: develop and deploy tech well before most companies
strategic partnerships: gives open ai access to the infrastructure it needs for large scale training
competitive position
holds compteiieve avdnatges in the market but may lose them to due potential threats
in the long run
leadership changes can create uncertainty which could impact both the internal morale and external reputation
open ai has been gradually shifting away from its original non profit model toward more profit driven approaches
open ai first mover avdnatge could fade and it could struggle to differeinate
business level strategy
differeination through:
unique offering: chat focuses offerings acdbaced features like faster response times, priority access and plugins ‘
cutting edge tech: regular updates, voice regnotiion
monetization model: direct revenue approach
benefits to enterprises: greater flexibility, independence from ad based eco systems, ehcnaced control over ai solution s
competitive advantage throigh innovation
investment in r and d
market leadership
innovate features
corporate level strategy (horizontal diversification )
dall e: trasnforming the graphic design market–> can achieve synergy by attracting new user segments while retaining loyal develo[ers
sora: innovatong videgraphy throigh ai enables video generation and editing based on text prompts
- synergy bc it builds on all e image generation and complements static design from dall e with video solutions
corporate level strategy with synergies across business tools
copilot and integrated tools creates synergy bc developers can use copilot for coding, fostering loyalty to open ai suite of tools
chat gpt plus now integrates third party plugins chat gpt plus
- features added: browning with internet connectivity
- code interpreter
Synergy: OpenAI integrates its conversational AI tool (ChatGPT) with specialized products like Copilot for developers. Developers using Copilot for coding tasks can also use ChatGPT for debugging, brainstorming, and project planning. This seamless integration keeps users within the OpenAI ecosystem.
Benefit: It ensures consistent user experiences, simplifies workflows, and fosters adoption of multiple tools
Synergy: ChatGPT Plus integrates third-party plugins, internet browsing, and a code interpreter, allowing users to perform diverse tasks—from retrieving real-time information to analyzing complex data—all within one platform.
Benefit: Expands the tool’s utility, encouraging users to upgrade to premium plans and rely on OpenAI tools for a variety of need
cooperative strategy (strategic partnerships )
partnerships with companies like microsoft, integrating open ai models into azure
industry analysis
financially demanding, fast growing and contrversoail industry
have to follow regulations
innovate quickly to keep up
companies innovate very fast in the span of weeks (google announcing their gemini 1.5 pro in one week) or months
very regulated like google had to stop gemini from generating images of people
supply chain management
2 ,major suppliers gpu and gpu from Nvidia and google
GPU shortage
access tp azure and microsfots web shortage services
operations**
model development
open source/ closed source
intense computational precess
gpt training cost of 4 bn
distribution
open ai models are distributed through APIS and apps such as chat or DALL e
open ai distribution
marketing and sales
subscription service to chat gpt plus for 20 us a month
chat users reached 100 m within 2 months of launch
follow up
continuous update on chat gpt 4
intergation of new features showing commitment to customer needs
financing
non profit to capped porifut structure
investors can earn up to 100 x return
us 1 bn investment from microsfokt
human resource managemnt
talented individuals drive the organization foward
mission attracts top talent and favours employee retention
loyalty to leadership
information systems management
partnership with MS azure gave them access to cloud storage services
why did open ai have to switch from non profit to a hybrid model
really high operational costs and couldn’t just rely on donations
why did open ai get into a partnership with Microsoft
got the funding needed
can integrate open ai features into Microsoft
expanding open ai
microsoft is able to get into ai
how does ai work
design the structure of the model
train the model using data
then refined during an iretaed fine tuning process
anthropic
the people who had established it had left open ai
has a similar mission to ope n ai
created a partnership with google cloud and amazon
how was sam Altman fired
bc of the unusual governance structure it allowed the non profit board full governance rights through a simple majority vote
