OpenAI achieves 10x Cost Reduction

And it's pouring cash for GenAI

Author

The Alignment
March 01, 2023

A new day for AI Economics has dawned as OpenAI makes a massive announcement about its pricing strategy. Today could be the day a thousand new startups are born.

Here’s what we have lined up -

  1. OpenAI achieves 10x cost reduction for ChatGPT and announces public API.

  2. Typeface AI comes out of stealth with a whopping $65 million.

  3. Are things adding up ?

OpenAI achieves 10x cost reduction for ChatGPT

OpenAI has announced that they have reduced the cost for ChatGPT by over 10x since December and released the ChatGPT API to the public along with the Whisper API (OpenAI’s speech recognition model). ChatGPT runs the GPT 3.5 turbo model and is already powering apps like

  1. Snap’s My AI

  2. Quizlet, a global learning platform with more than 60 million users

  3. Instacart that delivers fresh groceries from over 75000+ retailers

  4. Shop, Shopify’s consumer app

  5. Speak, an English language learning app for Korean speakers

The cost of gpt-3.5-turbo is $0.002 per 1k token, 10x cheaper than their previous offering.

With this announcement it’s clear that beyond just technical prowess, unit economics modelling is going to play a huge part in who uses these models and the sort of applications that are built on top of them. Expect a breakdown of how OpenAI are operating on a cost basis and competitors following suit with their pricing strategies.

Today’s pricing announcement is going to be an inflection point for an entire generation of startups who will now be able to justify building LLM applications. Exciting times ahead !

Typeface AI comes out of stealth with a whopping $65 million

When it rains, it pours. And right now it’s pouring cash for startups building Generative AI. Founded by former Adobe CTO, Typeface has come out of stealth and announced a whopping $65 million investment led by the who’s who of Silicon Valley.

Typeface’s premise is simple: help enterprises build personalised corporate content using Generative AI. Spanning various forms of content like communication, blogs and advertisement, Typeface claims that it can help its users personalise their content to their specific style and identity without having to invest heavily on external agencies and consultants. The goal is to boost the productivity and quality of marketing and communications teams to communicate the company’s message with its customers and audience directly.

It must be noted that this isn't something new. Startups using GenAI for marketing and copywriting have been around for the past 2 years with copywriting startup Jasper most recently being valued at over 1 billion dollars. But we are still in the very early days without the emergence of a clear frontrunner in this space. Expect more of such announcements to become commonplace.

Product Watch Typeface AI -

$65 million raised right out the gates and a premium enterprise offering, this product better be impressive. The demo looks promising (click below) !

Around the industry -

Do things add up ?

Have things been going to plan ever since Sam Altman (OpenAI CEO) had this conversation with Linkedin founder Reid Hoffman 5 months ago. Faster ? Slower ? What do you think ?