Humanity’s quest to push boundaries and probe the edges of what is possible is nothing new. For years, works of science fiction have speculated about artificial intelligence. Some of the outcomes have been positive, others less so…I don’t know about you, but after watching Ex Machina, I’m definitely a little wary.
Either way, this kind of technology is no longer limited to the realms of make-believe. In this OpenAI competitors analysis, I will look closely at the inner workings of the artificial intelligence industry and its key players to determine which companies come out on top.
AI has been around for a while in various forms. Still, only recently, through OpenAI’s most successful product, ChatGPT, has a fully-functioning version of it been made available to the public.
For companies like the ones I consult, this is a revolutionary development.
OpenAI is a non-profit research company with a big mission: to ensure AI “benefits all of humanity”. It is one of the most successful players in an industry growing rapidly, expected to hit $1,591.03 billion by 2030.
Needless to say, there is a lot of money in artificial intelligence. But, as with all lucrative industries, there is also high competition.
Bottom Line Up Front
OpenAI is a leading artificial intelligence and deployment company. Much of its achievements have laid the groundwork for the whole industry.
You’ve probably heard of one of OpenAI’s best products, ChatGPT, a game-changer for AI and one of the most epic developments to date. As a business consultant, my clients constantly ask how to streamline business processes using this new technology.
However, artificial intelligence has been on people’s minds for a long time, so naturally, OpenAI has several competitors, including OneAI and DeepMind. Thanks to its commitment to research and development, OpenAI is the clear industry leader – but it might not stay that way for long.
List of OpenAI’s Main Competitors
- One AI
- Hugging Face
- Google AI
OpenAI Business Strategy
OpenAI is an artificial intelligence research laboratory based in San Francisco, California. It consists of the non-profit OpenAI Inc. and its for-profit subsidiary OpenAI Limited Partnership. The company was founded in 2015.
OpenAI’s research prioritizes reinforcement learning (RL), a subset of machine learning that focuses on trial and error to acquire new knowledge. It’s all pretty exciting (and to some people, the possibilities are also a little terrifying, but we’ll come back to that later).
The main products and applications of OpenAI are:
- Gym – a general-intelligence benchmark hoping to determine how environments are defined in AI research.
- RoboSumo – a virtual world where humanoid meta-learning robots are given the goals of learning to move and pushing their opponent out of the ring.
- Video game bots – OpenAI Five and Gym Retro.
- Debates Game
- Dactyl – uses machine learning to train a human-like robot hand.
- Generative models – includes GPT, GPT-2, GPT-3, Codex, Whisper, and GPT-4.
- User interfaces – MuseNet, Jukebox, Microscope, DALL-E, CLIP, ChatGPT, and ChatGPT Plus.
This is a significant part of the company’s business strategy – developing innovative technology that pushes the boundaries of what is possible.
But OpenAI isn’t just pushing boundaries regarding AI technologies; it’s also proving that such technology can be used to turn a very healthy profit. One of the most significant changes the company implemented to boost its cash flow is using artificial intelligence to generate revenue through advertising. And as much as we all hate advertising (tell me about it), this is a smart move.
OpenAI’s strategy also focuses on forming close partnerships with other companies, leveraging its expertise to create customized business solutions. So far, it has created custom algorithms for huge tech businesses, including Google and Microsoft, and smaller startups.
For me, this is the joy of OpenAI’s tech – it can help all kinds of companies improve in various areas, including efficiency and productivity.
Two key revenue models in OpenAI’s business strategy are licensing and subscription. For some services, companies pay a subscription fee for access and the ability to integrate their algorithms and data. Other services require users to pay a licensing fee, so new AI technologies can be implemented into existing systems.
Due to the nature of artificial intelligence and its potential to do good in the world, OpenAI has also received several grants and donations from companies, including Amazon Web Services and Microsoft.
In early 2023, Microsoft announced it would invest $10 billion in OpenAI – no small amount! – resulting in a valuation after the funding round of $29 billion.
OpenAI’s mission is, according to its website, “to ensure that artificial intelligence – AI systems that are generally smarter than humans – benefits all of humanity”.
Currently, OpenAI supports over 150 countries and regions.
Sources say OpenAI generated only $35 million in revenue in 2022, but its projections suggest it will be closer to $200 million in 2023.
OpenAI Competitors Analysis
OpenAI competes against companies like DeepAI in the artificial intelligence industry.
DeepMind is an artificial intelligence laboratory founded in 2010 and headquartered in London, UK. In 2014, it was acquired by Google, and today, it is a full subsidiary of Alphabet, Inc.
The company’s focus is on researching the following areas:
- Deep learning
- Control and robotics
- Reinforcement learning
- Theory and foundations
- Unsupervised models and generative learning
DeepMind offers some open-source services which are available for free, which has a positive impact on both the company and the industry as a whole. For example, doing so lowers the adoption barrier for entry, so products get better traction (think about how big ChatGPT is and how much attention it has garnered). It also creates a competitive advantage by allowing better data collection.
Unlike OpenAI, DeepMind does not directly sell products or services to companies and consumers; its revenue is generated through Alphabet, which invests money in research. This is an unusual revenue model, though it is more common in this industry.
Between 2019 and 2020, the company saw a threefold increase in turnover, from £265 million to £826 million. However, some experts have criticized Alphabet for “creative accounting” – since it is DeepMind’s only client, it could make arbitrary changes to pricing to create the impression of greater profitability.
One of the problems DeepMind faces is that its main area of research – deep reinforcement learning – is costly, and its commercial applications are relatively limited. In 2020, nearly two-thirds of the company’s expenses – £467 million – went on staff costs, which is staggering considering that it only has about 1000 employees.
OneAI’s mission is “to bring human-level language AI to everyday life”. It is a privately held company headquartered in San Francisco and Tel Aviv. Unlike DeepMind, which focuses primarily on research, OneAI focuses on selling its generative AI products to other businesses; this is what its website is geared towards.
It allows businesses to integrate various language-based AI models into their existing workflow. Some of these models include:
- Language skills
- Custom skills (for example, in construction, you might automate the collection of hazard reports from employees)
OneAI also has the option of ChatGPT integration.
The company’s website has a wealth of resources about artificial intelligence and its potential applications. There is a how-to section aimed at helping customers get the most out of OneAI’s solutions, a blog, a learning section and a community area. When companies are committed to sharing knowledge, I often find that they have a much better relationship with their customers, who tend to be pretty loyal.
OneAI opts for a subscription revenue model. Customers can choose to pay annually (which saves them 10%) or monthly, and the plans are as follows:
- Lite – $29/month – includes core skills and speech-to-text.
- Start – $800/month – includes everything in Lite, plus language analytics and supports 97 languages.
- Pro – $2,500/month – has everything in Start, plus custom skills and a dedicated NLP expert.
- Scale – scale-friendly pricing for larger companies.
In 2022, OneAI raised $8 million in funding, some of which its founders said would be put toward expanding its team of 22. Unfortunately, since OneAI is privately owned, no information about its annual revenue is available.
Hugging Face, Inc. is an American artificial intelligence company that focuses on developing tools for building applications using machine learning. It is particularly well known for its natural language processing applications (making it a key competitor of OneAI) and its platform that encourages users to share machine learning datasets and models.
The company was founded in 2016, and its headquarters are in New York City.
Hugging Face has more than a few impressive customers, including Intel, Grammarly, Google AI, Microsoft, and SpeechBrain.
The critical solutions it provides are as follows:
- Expert Acceleration Program – expert advice to speed up your machine learning roadmap.
- Private Hub – the so-called GitHub of machine learning.
- Inference Endpoints – deploy Transfusers, Deformers or any model on a dedicated infrastructure.
- AutoTrain – create AI models without code.
- Hardware – a partnership with leading AI hardware accelerators.
Similarly to OpenAI, Hugging Face opts for a subscription revenue model for most services. However, some tools and services are paid for by the hour, rather than a subscription.
- HF Hub – free
- Spaces Hardware – between $0/hour and $4.13/hour.
- Inference Endpoints – between $0.06/hour and $4.50/hour.
- Pro Account – $9/month – includes a Pro profile badge, early access to new features, higher tiers for Inference API and AutoTrain.
The past few years have been crucial regarding the development and expansion of Hugging Face. In March 2021, the company raised $40 million in Series B funding. Then, in December of the same year, it acquired a software library called Gradio.
Following a Series C funding round in 2022 led by Sequoia and Coatue, Hugging Face received a valuation of $2 billion. And the company isn’t just doing well in terms of money; it also introduced a Student Ambassador program in 2022 to fulfil its mission of teaching 5 million people machine learning by 2023.
Hugging Face does not publicly disclose revenue figures; however, Forbes confirmed that the company generated $10 million in income in 2021.
Whereas Hugging Face and OneAI are about commercial productivity, DeepAI provides artificial intelligence tools for creativity. It is a private company founded in 2017, and its headquarters are in San Francisco.
DeepAI’s suite of APIs is free for the general public to access (up to a point) and includes the following:
- Image generator
- Image editor
- Text generator
- Image colorizer
- Stable diffusion
- Fantasy world generator
- Image similarity
- Nudity detection
- Deep dream
While researching for this article, I tried out a few of these APIs, and let me tell you – they’re great! The image generator, in particular, seems to have captured many people’s imaginations.
You may be wondering since anyone can go on the DeepAI website and generate an AI image how the company makes money. Well, that’s the clever bit. Remember I said earlier that the company’s APIs were free up to a point? If you want to use them extensively, you’ll have to pay.
DeepAI’s pricing is simple:
- Standard – Image APIs $5/100 requests – Text APIs $5/100 requests.
- Enterprise – custom value pricing – includes SLA & NDA, guaranteed throughput, dedicated resources, and 24/7 support.
The company’s most recent funding round was in 2019, though the amount is undisclosed. Similarly, since DeepAI is a private company, its annual revenue is not public knowledge; it is expected by experts to be less than $5 million.
Although DeepAI is probably less of a threat to OpenAI than some of the other companies I’ve discussed so far based on revenue, if you consider brand awareness, then it is a worthy rival.
DeepAI is very much on the public’s mind now, with many people using it for fun.
Its popularity gained an additional boost when an image of the Pope dressed in a white puffer jacket, generated using DeepAI, went viral.
Google AI is a division of Google – as you might have guessed – dedicated to artificial intelligence that CEO Sundar Pichai announced in 2017. Its tagline is “advancing AI for everyone” – a common theme among almost all the companies I’ve analyzed in this article.
Since Google is an information and technology company, being ahead of the game in AI is vital, if not for revenue, then certainly for upholding its global reputation as a leader in all things tech.
Google AI’s key projects are as follows:
- Developing TensorFlow, an open-source software library for machine learning and AI.
- LaMDA – a family of conversational large language models.
- Magenta – a research team dedicated to deep learning, exploring how machine learning can aid the creative process.
- Sycamore – a 54-qubit quantum processor that is programmable.
- Tensor Processing Unit (TPU) research cloud for machine learning researchers.
- Serving cloud-based TPUs to develop machine-learning software.
Google relies heavily on technology from Alphabet – its parent company – for most of these projects, which means it is closely aligned with Deep Mind.
For example, the Google Cloud Text-to-Speech application interface, which uses DeepMind’s artificial male and female voices, costs $16 for every million characters of text it processes.
Given that Google has many subsidiaries and divisions, it is nearly impossible to extrapolate how much revenue is generated through AI.
OpenAI SWOT Analysis
In this SWOT analysis, I will identify the key strengths, weaknesses, opportunities, and strengths of OpenAI to help situate it within the competitive landscape of the artificial intelligence industry.
- Accessibility – services like ChatGPT can be accessed and used by anyone, which has helped to bolster awareness of OpenAI as a brand.
- Scalability – the company provides online services, mainly without needing any hardware or logistics, making it quickly scalable.
- Exceptional talent pool – because OpenAI is one of the leading artificial intelligence companies, it can attract the best talent, leading to new and better products.
- Financial backing – reputable companies like Microsoft have invested heavily in OpenAI, putting the company in a very secure financial position.
- Research and development – OpenAI has a team of some of the best AI researchers and invests heavily in this area, allowing it to develop innovative products.
- Highly adaptable – the company is constantly looking for new ways to do things, which means it is also adjustable to positive or negative changes.
- High development costs – researching and developing AI technology is prohibitively expensive, and the financial returns aren’t always immediate or significant.
- Ethical implications – the company operates under a set of ethical guidelines, but it isn’t clear how well these are adhered to, and some products – such as ChatGPT – can be used for immoral purposes, such as cheating on school work and publishing books that AI wrote under a real person’s name.
- Reliance on external funding – OpenAI requires extensive financing due to the high costs associated with AI development and testing.
- Security and privacy issues – artificial intelligence comes with security issues, and many people are anxious about what it might be able to achieve with negative consequences for people’s everyday lives.
- New applications – almost unlimited possibilities regarding where artificial intelligence could be used.
- Continue prioritizing R&D – artificial intelligence is a rapidly evolving industry, so investing in research will help OpenAI stay ahead.
- Capitalize on the popularity of ChatGPT to spread brand awareness and knowledge of other company-led projects.
- Leverage data – data is one of the most important currencies of our modern lives.
- Government regulation – while the possibilities regarding AI are exciting, they are also limited by rules, some of which may hinder the progress of OpenAI.
- Security concerns – many people, including those developing AI, have concerns about the possibility of autonomous artificial intelligence.
- Increasing costs – R&D in the AI industry has never been cheap, but prices are constantly growing, and if OpenAI can’t secure enough funding and revenue to keep up, it will have to cease developing new products.
OpenAI Competitors Analysis FAQs
Question: Who is OpenAI’s biggest competitor?
Answer: All the companies discussed in this competitors analysis pose a threat to OpenAI because they are all largely successful and operating in the same industry. However, I believe Hugging Face is OpenAI’s biggest competitor due to its large customer base and the similarity of its products and services.
Question: What makes OpenAI different?
Answer: OpenAI has changed how many people think about artificial intelligence and its potential application, particularly through ChatGPT. Whereas before, the only people I regularly discussed AI with were business professionals, now I have several friends and family members who have experimented with ChatGPT and expressed a new interest in the tech behind it.
Other features that make OpenAI stand out are its commitment to creating powerful algorithms and its ongoing open-source approach.
Question: What is the potential of OpenAI?
Answer: Artificial intelligence will likely have a decisive role in shaping the future of learning, and OpenAI has already proved just how significant its impact might be. ChatGPT, for example, provides students with a way to quickly format, group, and analyze data and search for new information about a particular subject quickly.
However, it also has a negative potential. When autonomous AI becomes a reality, there will be a continuous cybersecurity threat from hackers. There have already been instances of people passing off AI-created art and fiction as their own.
OpenAI is one of the most exciting companies operating in the artificial intelligence industry, and its contribution to public discourse surrounding AI technologies cannot be overstated. However, startups are constantly emerging, and several significant competitors hope to achieve similar things.
In the future, OpenAI will have to commit a significant amount of time, money and thought to the security of its products because, while AI is exciting, it is also a source of apprehension for many. People must be convinced of its safety and benefits to get behind its ongoing development.
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