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Lessons Small Business Owners Can Learn from the OpenAI Meltdown

posted by Michael Epps Utley Michael Epps Utley
Lessons Small Business Owners Can Learn from the Open AI Meltdown

At the end of 2023, the extraordinary drama at OpenAI topped the news.

OpenAI — the well-funded startup and creator of ChatGPT — experienced tremendous upheaval. Its board fired the CEO, Sam Altman, known for his mercurial personality. Then, he accepted a job at Microsoft only to return to OpenAI a day later.

This chaos left many small business owners and marketers who use artificial intelligence (AI) backed technology as a part of their promotional efforts questioning how a similar future event could impact them.

This article offers perspectives on sensibly leveraging AI in your marketing during these changing — and challenging — times.

Lessons to Take Away From the OpenAI Meltdown

Structure and Governance Matters

OpenAI’s business structure is central to the drama that happened late last year. It has a convoluted corporate governance framework. Its board controls a nonprofit known as OpenAI. The nonprofit then created a capped for-profit subsidiary called OpenAI GP LLC. The majority owner of the for-profit is OpenAI Global LLC, another for-profit company.

Bottom line: The nonprofit is positioned to work for the benefit of society through a for-profit organization.

To many, it may seem like an earnest approach when you take into account the enormous and disruptive power of tech backed by artificial intelligence.

The issue: The structure comes with many challenging governance problems. The biggest of these is that the nonprofit board, which has control over everything, is not obligated to maximize profit.

This issue is central to what blew up OpenAI late last year and could impact it and other organizations in the future.

That’s why business owners and marketers must take the time to learn about the organizations behind the generative AI tools they depend on.

Providers of AI-backed software and services are all struggling with organizational governance issues. Established companies like Microsoft, Google, and Anthropic (Apple is also entering the AI game) will likely not have their internal debates go public in a big way like OpenAI. Still, the discussion about governance versus profits is a big topic for them. It’s wise to research how they and other tech providers approach these issues before you license solutions from them.

Use of Generative AI Solutions Isn’t a Tech Challenge

It’s critical to acknowledge the effective use of AI is a strategic and governance issue, not a simple technology challenge. If you don’t address the governance and functional uses of the AI technology you buy, you could find yourself dependent on solutions that disappear overnight.

Big and popular solutions aren’t unbreakable because they’re big and popular.

The best governed and most useful software won’t just withstand a shock in the tech sector. It will evolve and improve because of it.

It’s hard to imagine a company the size of OpenAI could merely self-correct or disappear tomorrow. But things like that happen. Too many tech businesses set their foundations on shaky ground.

In OpenAI’s case, the for-profit part of the company won out, allowing the organization to fight another day. However, the company and its solution won’t be stronger because of the public debacle.

And other companies, viewing the experience and learning from it, will likely become more wary. They now realize the fragility of their solutions because they depend on OpenAI’s survival and willingness to provide access to the software. Imagine the impact if the OpenAI board had won the fight. If they had, they could have eliminated paid access to the API or the ability to build business models on it, all in the name of safety, forcing everything to come tumbling down.

The Future of AI in Small Business Marketing

The time since the OpenAI debacle late last year hasn’t made it easier for companies to decide whether — and how — to integrate generative AI solutions into their marketing efforts.

What’s critical is that you consider potential issues and risks. Research how the vendor’s infrastructure is housed and identify the risks involved. Always consider issues like organizational governance, company strength, and structure. Also, think about whether you need AI-backed solutions or if traditional tech could be as effective and less risky.

Ultimately, AI will play a bigger and bigger role in marketing. However, the OpenAI debacle revealed the world of artificial intelligence might not be as “blue sky” as people thought it would be. The bottom line? Look out for clouds on the horizon before you become dependent on any AI-powered solution.

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