OpenAI Debacle Triggers Support for Open Source AI Rivals

The recent leadership saga at OpenAI may be the publicity that other existing Artificial Intelligence (AI) technology companies need to boost their adoption and sales.

Open Source AI Startups Gaining Recognition

Following Sam Altman’s short exit from OpenAI as the CEO of the AI powerhouse, many technology firms like Salesforce, Qualcomm, Nvidia, and former Google CEO Eric Schmidt have started redirecting their investment to some alternative open-source AI startups.

Hugging Face, a New York-based company that develops tools for building applications using machine learning, and Mistral AI are two companies that have benefited from the unfortunate debacle at OpenAI. Before this time, HuggingFace had recorded up to $4.5 billion in valuation right after a $235 million venture deal in August.

The French-American open-source tech firm has seen a surge worth over $400 million from up to 30 tech investors that cut across several fields including Qualcomm, IBM, Google, Nvidia, Intel, and Sequoia Capital.

A few weeks before the OpenAI debacle, Thomas Wolf, co-founder and CEO of Hugging Face pointed out that his company is “not following the Silicon Valley playbook.”

“AI builders are growing superfast, raising and burning money. We are not in that mindset. We’ve been around for seven years, and didn’t need to raise money. We can make plans for the long run without a problem.”

On the other hand, Alphabet-linked Mistral AI has received support from Schmidt and other industry giants. Even after raising up to $113 million from Lightspeed Venture Partners with other Silicon Valley heavyweights, the AI company is still looking to pull in an additional $400 million at a $1 billion valuation.

Poolside AI is another open-source rival that has recently been able to secure $126 million, jointly led by French telecom and internet billionaire Xavier Niel and U.S. VC firm Felicis Ventures.

Sam Altman Returns as OpenAI CEO

All of these open-source AI platforms have gained reasonable traction in less than one week during which the OpenAI saga spanned.

The future in the AI venture scene remains volatile considering the return of Sam Altman as the CEO of OpenAI. His return comes days after Microsoft CEO Satya Nadella announced that Altman will be leading the AI research team at his company.

However, the initial OpenAI leadership shuffle has shaken the market and caused many to reconsider their dependence on a single generative AI service provider. Despite the potential dominance of OpenAI, the viable rivals Mistral AI and Hugging Face are bound to gain more traction moving forward.

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