What does OpenAI do?

ML model vendor? Or the most interesting company in the world?

The TL;DR

OpenAI researches and builds Machine Learning models, and sells access to them.

• Building ML models yourself to use day in and day out is really hard for companies without specialized expertise

• For years, big companies (Google, AWS, etc.), and smaller startups too, have built businesses on selling access to their home grown models

• OpenAI does the same: researches, builds, and sells access to powerful ML models like GPT and DALL-E

• The company is a bit strange: they’re a combination of a non-profit and for-profit corporation

OpenAI has obviously been all over the news over the past year, and is probably one of the most important companies in the world right now – so let’s dig in.

The business of wheeling and dealing ML models

While OpenAI is a unique case study of a company, what most people forget (or don’t know) is that their business model is not particularly novel. Companies have been selling access to ML models for a while (probably 5+ years?), ranging from your typical big company stuff to smaller, more specialized startups.

Imagine you’re a software engineer at an e-commerce company, and you want to build a basic recommendation engine to recommend relevant products after someone buys something. What are your options?

• You can do it manually for each product. This can work early on, but doesn’t really scale.

• You could try and build it yourself, but you don’t have a Data Science background. You could probably pick it up in a few weeks? But then you wouldn’t be doing other work your team needs.

• You could hire a Data Scientist, but how much would that cost? How long would it take? You’re probably looking at at least 6 months before you’d see anything ready to test.

Many teams do opt for one of these options. But your most straightforward bet is to buy a model from someone instead of building it yourself. Even for something as specific as a recommendation system, you’ve got a few options in the market: