European investors grab the popcorn for the new ‘series’ of OpenAI, but are fearful of the fallout

With nan OpenAI saga playing retired crossed nan pond, nan European tech organization has been waiting for nan latest updates arsenic if a caller bid of “Succession” was astir to drop. Indeed, events person astatine times resembled immoderate Greek calamity astir nan Gods fighting it out, atop Mount Olympus, while america specified mortals watch on. With only a fistful of large-scale AI startups specified arsenic Germany’s Aleph Alpha and France’s Mistral to get immoderate play from (London’s DeepMind was absorbed into nan Google Borg agelong ago), we’ve been grabbing nan popcorn and watching this unexpected section of Silicon Valley.

I probed a fewer keen tech observers, galore of them task capitalists, but almost nary would spell connected nan record, possibly for fearfulness of drafting nan attraction of immoderate Valley AI God successful afloat battle-mode.

A U.K.-based investor posited that nan play will person affirmative effects connected Europe’s nascent AI sector.

“This is awesome news for startups for illustration Mistral, who tin astir apt poach immoderate bully labor and catchup pinch OpenAI. For nan AI companies built connected OpenAI this will make nary awesome changes successful nan short term, but will mean nan marketplace homogenizes, particularly if they suffer guidance and focus.”

Another pointed retired that aft OpenAI’s overmuch lauded Demo Day, it was seen arsenic “the astir bonzer benignant of business,” but now looks for illustration “an absolute crap show.” They likened it to nan debacle that was WeWork, “but astatine slightest nary due VCs are successful this one, arsenic it’s a operation of nonprofit and for-profit and nary 1 understands really that works.”

One European VC predicted that nan events will person an effect connected each term-sheet negotiations: “I would expect founders to go much resistant to committee power complete CEO replacement and different akin terms. They will intelligibly inquire ‘if this tin hap to Sam Altman, why should I presume it won’t hap to me?’”

At an moreover much applicable level, a batch of European applied AI startups are very reliant connected OpenAI, which is (whatever anyone says) caput and shoulders supra astir alternatives. The turmoil astatine OpenAI seems to beryllium pushing nan business much into nan hands of Microsoft and that could person rather awesome implications for companies reliant connected OpenAI’s platform… “especially if that institution is competitory pinch aliases extracurricular nan Microsoft ecosystem,” they pointed out.

“From a level POV, it is simply a disaster,” said different investor. “So galore companies are already moving pinch OpenAI, this is for illustration nan Facebook, Twitter, etc. API changes each complete again and perchance worse.”

There was besides grumbling astir European regulation: “As we person seen pinch nan heavy-handed regularisation coming down from EU-level, authorities won’t prevention us. We request to person much AI champions locally. There is still time, but unclear really much.”

Others were much upbeat astir nan turmoil buying useful clip for European startups: “Which is simply a bully point for European gen AI startups arsenic it gives them clip to respire and re-calibrate earlier nan adjacent shockwave.”

Finally, 1 brave psyche successful nan style of DN Capital co-founder and managing partner Steve Schlenker did spell connected nan record.

One of his concerns is that entree to nan world’s astir successful LLMs will move distant from nan mean startup — “such arsenic those successful Europe” — and toward startups and researchers, mostly section to nan U.S., which walk immoderate caller yet-to-be-defined “screening” process, specified arsenic that defined by nan arguable committee astatine OpenAI.

Furthermore, if nan champion and brightest from OpenAI spell connected to beryllium full-time labor of a paid U.S. mega-company for illustration MSFT, “the expertise of nan AI activity to stay unfastened to each astatine a adjacent value will diminution rapidly.”

Meanwhile, nan upside of each this chaos is that it is playing retired successful nationalist connected societal media, mostly connected Twitter/X. As a Warsaw-based VC put it to me: “It’s beautiful breathtaking and unsocial that a batch of this crap show is happening publically connected Twitter. Not imaginable successful Europe!”