In a striking parallel to Visa's dominance of payment processing, OpenAI appears to be following a similar playbook to maintain its leading position in artificial intelligence, raising concerns about monopolistic practices in the rapidly evolving AI industry.
With projected revenues of $100 billion by 2029, OpenAI faces mounting pressure from tech giants like Google, Meta, and Amazon, who are rapidly developing their own AI models. The company's CEO Sam Altman has acknowledged that AI models will become widely available and commoditized, much like payment processing technology did for Visa.
In response, OpenAI seems to be fortifying its position through strategic moves reminiscent of Visa's approach. The AI company has actively engaged with Washington lawmakers, advocating for increased regulation of the industry. In a notable development, OpenAI's recent funding round included conditions preventing investors from backing competitors like Anthropic and SSI, or even application-layer companies such as Glean and Perplexity.
The company's market dominance is already evident, with 92% of Fortune 500 companies reportedly using OpenAI's services. However, this position faces challenges from open-source alternatives like Meta's Llama and Mistral's 7B, which are freely available for commercial use.
OpenAI's strategy appears focused on creating barriers through exclusive partnerships, government contracts, and licensing requirements for advanced AI models. This approach mirrors Visa's tactics, which recently led to a Justice Department lawsuit over the payment processor's aggressive methods to maintain market control.
The AI leader's efforts to secure its position face potential hurdles, particularly with Elon Musk emerging as a prominent rival and wielding influence in regulatory circles. As the AI landscape becomes increasingly democratized, OpenAI's ability to maintain its competitive edge may depend more on these strategic barriers than technological superiority.
The parallels between OpenAI and Visa's approaches raise important questions about competition and innovation in the AI sector, as both companies seem to prioritize market dominance over open competition.