\n<\/p>\n
With the OpenAI saga playing out across the pond, the European tech community has been waiting for the latest updates as if a new series of \u201cSuccession\u201d was about to drop. Indeed, events have at times resembled some Greek tragedy about the Gods fighting it out, atop Mount Olympus, while us mere mortals watch on. With only a handful of large-scale AI startups such as Germany\u2019s Aleph Alpha<\/a> and France\u2019s Mistral<\/a> to get any drama from (London\u2019s DeepMind was absorbed into the Google Borg long ago), we\u2019ve been grabbing the popcorn and watching this unexpected episode of Silicon Valley.<\/p>\n I probed a few keen tech observers, many of them venture capitalists, but almost none would go on the record, perhaps for fear of drawing the attention of some Valley AI God in full battle-mode.<\/p>\n A U.K.-based investor posited that the drama will have positive effects on Europe\u2019s nascent AI sector.<\/p>\n \u201cThis is great news for startups like Mistral, who can probably poach some good employees and catchup with OpenAI. For the AI companies built on OpenAI this will make no major changes in the short term, but will mean the market homogenizes, especially if they lose direction and focus.\u201d<\/p>\n Another pointed out that after OpenAI\u2019s much lauded Demo Day, it was seen as \u201cthe most extraordinary kind of business,\u201d but now looks like \u201can absolute shit show.\u201d They likened it to the debacle that was WeWork, \u201cbut at least no proper VCs are in this one, as it\u2019s a mix of nonprofit and for-profit and no one understands how that works.\u201d<\/p>\n One European VC predicted that the events will have an impact on all term-sheet negotiations: \u201cI would expect founders to become more resistant to board control over CEO replacement and other similar terms. They will clearly ask \u2018if this can happen to Sam Altman, why should I assume it won\u2019t happen to me?\u2019\u201d<\/p>\n At an even more practical level, a lot of European applied AI startups are very reliant on OpenAI, which is (whatever anyone says) head and shoulders above most alternatives. The turmoil at OpenAI seems to be pushing the business more into the hands of Microsoft and that could have quite major implications for companies reliant on OpenAI\u2019s platform\u2026 \u201cespecially if that company is competitive with or outside the Microsoft ecosystem,\u201d they pointed out.<\/p>\n \u201cFrom a platform POV, it is a disaster,\u201d said another investor. \u201cSo many companies are already working with OpenAI, this is like the Facebook, Twitter, etc. API changes all over again and possibly worse.\u201d<\/p>\n There was also grumbling about European regulation: \u201cAs we have seen with the heavy-handed regulation coming down from EU-level, government won\u2019t save us. We need to have more AI champions locally. There is still time, but unclear how much.\u201d<\/p>\n Others were more upbeat about the turmoil buying useful time for European startups: \u201cWhich is a good thing for European gen AI startups as it gives them time to breathe and re-calibrate before the next shockwave.\u201d<\/p>\n