Key Takeaways
- Sam Altman stated in a recent article that it’s probably the best moment in history to launch a new company, citing the fact that AI has “shook the earth.”
- Companies who want to succeed need to develop a solid strategy of defensibility and work in small groups with the best AI tools Altman also spoke about the future of AI, and how human robots that have AI capabilities could be the next big thing.
In a new Sam Altmanthe man behind OpenAI sharedhis wisdom on business and startups in an interview with Y Combinator. Altman’s belief that this is the right time to start a business is the biggest talking point.
Altman spoke at length about the importance of building defensibility for a company and how small teams could reduce coordination costs and gain an advantage as a first mover. This article is for you if you are an AI enthusiast, or aspiring entrepreneur. We will dive into all of this, and much more, as well as the future AI.
Now is the best time to start a business in the history and technology. Sam Altman
Altman believes that if you’re an entrepreneur, this is the perfect time to launch a new business because ‘the ground is shaking’. Sam Altman chooses to see the brighter side. While AI has displaced redundant tasks and eaten up many jobs, Sam is adamant that it’s not all bad.
First of all, AI-driven change is happening to everyone. No one is exempt. Herein lies the opportunity for startups.
Startups are more successful because they can iterate quicker and more economically than larger companies. Large corporations are slow to adapt because they have many moving parts. When the cost advantage fades, so do their economies of scale. Take Tesla as an example. Tesla was the first to build EVs that were powered by Internal Combustion Engines (ICEs) when other auto giants such as Ford, GM and Toyota were hesitant. They took risks and were quick to assess the potential of the future. Tesla developed their own battery infrastructure, autonomous driving technology, and software. Almost all auto manufacturers want to offer EVs.
Defense
Today, a key part of building a successful start-up is identifying the right defensibility strategies. Defensibility allows companies to protect themselves against competitors. This is the USP of a company, its differential. It is extremely difficult for competitors copy.
- Defence strategies can include technology or intellectual properties rights, as in the case of OpenAI’s GPT model.
- If you have access a large volume of data, this can also be considered as a solid and defendable strategy. Google is an excellent example.
- There are also large companies, like Amazon, that use economies of scale to differentiate themselves.
- Apple and Nike, for example, build their defensibility around their brand moat and the trust they have built. Altman believes that defensibility is necessary to survive in today’s startup world. This could be achieved through innovation. You can focus more on your own products when you do something no one else has done.
It’s hard to build something that is defensible when everyone is chasing the same goal. The most successful companies are usually not those that follow the crowd.
Coordination costs
Altman also touched on the increasing cost of coordination across companies. When companies work in large groups, employees spend around Instead of being productive, 30% to 50% of your time is spent on coordination . Small teams have a lot of leverage in this situation.
It’s interesting that during Amazon’s early years, Jeff Bezos created a ‘Team’. two-pizza rule‘. This means that two pizzas cannot feed a whole team. Bezos thought smaller teams were more efficient at communicating and getting things done, because they didn’t have to deal the corporate hierarchy. Altman attributed the reduction in coordination costs to AI advancements. He says that smaller teams are able to accomplish many tasks in a short time thanks to the new AI tools. This gives them an edge over large corporate teams.
According to him, when people have better tools and resources at their disposal, they do not just see a marginal increase in productivity. The quality of the work has improved dramatically.
OpenAI provides a good example. It began as a small group of researchers, with only a few founders in charge, which allowed the team to move quickly, and surpass other, more resource rich firms.
While traditional VFX studios need a team of 50-200 people to do VFX, a Runway ML team only needs 10 designers and engineers who can complete weeks of VFX in just a few short hours. Altman’s claim that small teams are capable of outperforming larger teams with the right tools is reinforced by this.
OpenAI and Energy.
Altman spoke extensively about energy costs in the interview. He said AI and energy were two of his obsessions, although he viewed them as orthogonal vectors prior to 2015.
He only realized that the two were deeply interconnected after he created OpenAI. He stressed the importance of maximising energy generation to run GPUs.
The conversation pointed out an interesting chart that shows a correlation between GDP per capita and energy consumption. Notably, countries that had higher energy consumption per capita were higher on the list of GDP. This means that the more energy a country consumes, the better it will do.
300M+ users on ChatGPT punch in a total of around 1B queries every day. OpenAI consumes 0.0029 kilowatt-hours of electricity per query, or around 2.9 million kilowatt hours per day
That’s a hundred thousand more kilowatt-hours than the average US household consumes each day. The annual consumption is 1,058.5 GWh and costs $139.72M, which is equal to the consumption for a small country such as Barbados.
Energy costs will be a major bottleneck for OpenAI on the long term. Altman knows this and has invested heavily to make OpenAI self-sufficient. Just stop saying please, thank you.
For example, the The $500B Stargate Project plays a vital role in the wheel. The project explores a variety of energy sources and technologies including solar power integration, battery storage systems and other technologies.
Small Modular Reactors are also a part of the picture. SMRs are compact nuclear reactors that can produce around 300 MW (e) per unit. This is one-third the power of a conventional nuclear power plant.
Because SMRScan be shipped and installed on site.
The Future of AI
Altman kept his upcoming OpenAI projects a secret. He did mention a multimodel AI assistant and an all-in one version of various products including image and video creators, Deep Research and more.
As expected, Altman acknowledged that Artificial General Intelligence is the next big thing for the AI domain. He also hinted that human robots could have AI capabilities.
Until now, robotics and AI are growing in parallel with little convergence. Altman believes that this will change within the next five year, when we may see AI-driven robotics. This would essentially eliminate the concept of an interface, which means we wouldn’t need to sit in front of a screen anymore to harness the power AI.
Open AI announced a partnership with Figure AI, an AI start-up that builds human robots to perform jobs in logistics, manufacturing and warehouse. The deal fell through. The OpenAI founder, however, has been vocal in his belief that humanoids will revolutionize the world.
The humanoid robots haven’t really taken off yet
Sam Altman
Product Overhang
Altman said in the interview that society and the economy will figure out how to create a value from a discovery.
He says, for example, that while ChatGPT currently is only used as a bot, in the future, more advanced LLM models may be developed. ChatGPT-3, a barely-good amateur product, was launched five years ago. It now boasts an intelligence that is almost PhD-level.
Altman thinks we’re in a ‘product overhang’, where there is a huge gap between the models’ capabilities and what people are able to extract from them. Even if models don’t improve (which is inevitable), there are still plenty of new products to be created.
It’s clear that now is the best time to start a business. You have the best AI tool to help small teams, an overhanging product gap, and a ‘unfathomable’ ongoing tech shift. These moments are rare and only come around every few decades. Make the most of them. Carpe diem!
Krishi is a seasoned tech journalist with over four years of experience writing about PC hardware, consumer technology, and artificial intelligence. Clarity and accessibility are at the core of Krishi’s writing style. He believes technology writing should empower readers—not confuse them—and he’s committed to ensuring his content is always easy to understand without sacrificing accuracy or depth. Over the years, Krishi has contributed to some of the most reputable names in the industry, including Techopedia, TechRadar, and Tom’s Guide. A man of many talents, Krishi has also proven his mettle as a crypto writer, tackling complex topics with both ease and zeal. His work spans various formats—from in-depth explainers and news coverage to feature pieces and buying guides. Behind the scenes, Krishi operates from a dual-monitor setup (including a 29-inch LG UltraWide) that’s always buzzing with news feeds, technical documentation, and research notes, as well as the occasional gaming sessions that keep him fresh. Krishi thrives on staying current, always ready to dive into the latest announcements, industry shifts, and their far-reaching impacts. When he’s not deep into research on the latest PC hardware news, Krishi would love to chat with you about day trading and the financial markets—oh! And cricket, as well.
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