Securing ChatGPT: Defending Against Low-Cost Open Source LLM Risks

In its pursuit of business defensibility beyond the confines of its infrastructure moat, OpenAI has strategically implemented initiatives to fortify its position in the competitive landscape. The focus extends beyond mere product development to fostering network effects around ChatGPT, its flagship offering, and introducing innovations that elevate its standing in the market. A pivotal element of this strategic plan is the introduction of GPT Store, an AI counterpart to Apple’s App Store, unveiled by OpenAI in November.

Recently launched, GPT Store empowers users and developers to share their tailored versions of the Language Model (LLM) with others. While many GPTs serve whimsical purposes, some prove exceptionally useful, enhancing productivity. OpenAI plans to augment this by offering enterprise features, allowing organizations subscribing to the ChatGPT Team plan to establish their private GPT Store.

ChatGPT Store Builders’ Incentive

To incentivize user engagement and promote the stickiness of the product, OpenAI has introduced a monetization model. Starting Q1 2024, U.S. builders will be compensated based on user engagement with their GPTs. This move aims to create a critical mass, encouraging users to stick with ChatGPT and enticing more to join the ChatGPT Plus plan for exclusive access to the GPT Store. However, this strategy, while promoting engagement, raises concerns about potential drawbacks akin to those witnessed in social media platforms.

OpenAI is also leveraging data network effects to enhance its products continually. Users on the free plan contribute data for model training, while those on the Plus plan can choose to opt out of the data collection program. This dual-tiered approach seeks to strike a balance between user privacy and data-driven model improvement.

Addressing the need to increase switching costs, OpenAI is working towards minimizing the operational expenses associated with running ChatGPT. CEO Sam Altman highlighted a remarkable 40-fold reduction in the costs of running LLMs in a recent interview with Bill Gates. This cost reduction not only allows OpenAI to offer more features to both free and paid users but also serves as a countermeasure against the growing competition from low-cost open-source LLMs.

What Else Beside ChatGPT Store?

Looking ahead, OpenAI is positioning itself for the future by exploring the development of its hardware, potentially centered around its LLM. This move mirrors Apple’s vertical integration strategy with the iOS ecosystem, indicating OpenAI’s preparedness for potential paradigm shifts in computing. As the landscape evolves, OpenAI is poised to unveil its vertical stack, further solidifying its standing in the rapidly changing world of AI and language models.