OpenAI’s dominance is unlike anything Silicon Valley has ever seen

Virtually every successful tech startup throughout history has faced the reality that it could get swallowed up or run over by a large incumbent at any moment. It’s part of daily life for an entrepreneur.

But the company at the center of the current boom is a different kind of beast.

Unlike industry giants of past eras, OpenAI is privately held. Its financials are mostly secretive and its ability and willingness to spend other people’s money is unrivaled.

And as OpenAI has proven recently, through a dizzying array of mammoth deals and product rollouts, the artificial intelligence lab is investing up and down the stack — from the picks and shovels of data center development to consumer applications, coding tools, and even devices. Its flagship ChatGPT chatbot has reached 800 million weekly users.

“If you’re an entrepreneur, you have to ask yourself, ‘Where is the white space?'” said Nina Achadjian, a partner at Index Ventures who focuses on AI.

Not that Achadjian is staying out of the market.

In a transaction announced on Wednesday, Achadjian and Index led a $25 million investment in Quilter, which uses AI to develop software for printed circuit boards (PCBs). The company was founded in 2019 by former SpaceX engineer Sergiy Nesterenko.

Achadjian described Quilter as “pretty niche” and “not built on top of any model.” She said it’s unlikely that OpenAI will compete in a space where companies like Cadence Design and Synopsys have long developed technology for chip design, adding that a PCB is in every consumer device, light bulb, car tire, and virtually all electronics.

Still, “there is no predictability,” she said. Relative to past cycles, “it’s more opaque and hard to predict which direction those guys are going to go.”