Do AI startups really stand a chance against big-tech?

Although it might not look like it, most big companies today started off as startups competing against large businesses. When Netflix first started out, Blockbuster was dominating the video rental business before eventually filing for bankruptcy in 2010 as a result of Netflix’s success. The same goes for companies like Apple, Wayfair, and Atlassian. Like Netflix, their successes can be linked to the downfall of larger companies at the time. This David vs Goliath tension has been going on in the tech industry for as long as there has been a tech industry. 

In the artificial intelligence space, the spotlight is currently on larger companies who have captured the attention of the public with their products. There are the usual MAANG companies (Meta, Apple, Amazon, and Google) as well as standouts like OpenAI, Deepmind, and Stability AI. While there is no doubt that this is deserved (OpenAI’s ChatGPT was the breakout model of last year, setting the record for the fastest growing user base in history), there are also tons of startups doing amazing things in the space who don’t get the attention they deserve. In order for these startups to be able to compete with larger companies, they have to stand out, be better than other startups, and successfully attract the best talents. 

Since both types of companies are vastly different, choosing the right type to work at involves knowing the environment that you thrive in and making sure that your goals align with wherever you find yourself.

With so much attention on the every move of large AI companies, it is getting simpler for small startups to get lost in the fanfare. Since these large companies have the resources and funding to push into innovation and research, as well as the influence to publicize their innovations and research, startups are having to figure out the advantages they have over large companies, and use them. This requires understanding where being an underdog can give an upper hand especially in terms of standing out and adopting newer technologies. Startups are also able to take advantage of their fewer bureaucracy to build and ship innovations that might take longer to deploy in larger companies.

Earlier this year, a leaked Google memo revealed that the tech giant was worried that its size was rapidly becoming a disadvantage when it came to its large language models. According to the memo, an open source large language model developed by Google was leaked and acquired by the open source community and there is a lot of worry that Google cannot compete against open source models which are “faster, more customizable, more private, and pound-for-pound more capable.” Apparently, the open source community was able to do in a matter of days what took Google and other large AI companies years to build.

So while it may seem like larger companies have all the advantages when it comes to the tech industry, this leaked Google memo shows that that is not necessarily the case. 

Joining a startup or a larger corporation has the potential to shape your career for the rest of your life. Since the way they operate is so vastly different, it is important to know how to determine which one best aligns with your career goals and plans. There also has to be some thought into the current job market and future trends to determine the long-term implications of joining either of them. Like other important decisions, they both have their pros  and cons and so weighing the two alongside each other will help in making a more informed decision.

The pros of joining a more mature company are numerous and widely known. For one, the starting compensation at larger companies is almost always greater than startups. There are also a lot of learning and development opportunities as well as the financial ability to sponsor experimentation. The stability and security that these companies provide  means that it is possible to spend a long period of time at a large company working up the ladder. Even if a person is laid off, the prestige of having worked at a well known company makes the job search process a lot easier. On the other hand, by nature of being a large company there is a lot of bureaucracy that might limit innovation and individuality. This might lead to a cog-in-the-machine feeling since you are just one of thousands of employees. This also makes it harder to move up in the ranks because there are lots of equally talented employees.

Joining a startup also has its advantages including learning on the job as well as diversifying your existing skills since startups are often less rigid than larger companies. This means that it is easier to work up the ladder, speed up your career growth, and gain exposure to different aspects of your field. Since startups often have fewer employees, there is often not as much supervision meaning that working hours and environment are typically more flexible. It is also easy to get the attention of managers and C-level executives. Because startups do not have as much investments and funding as larger companies, they typically do not pay as well and don’t have as many benefits. They also don’t have as many resources as big corporations and so might not be able to invest in research and development. They are also unpredictable like any other growing company and are not the best option if looking for stability or security.

Large AI companies have a lot of advantages over smaller startups with the most important being money and resources to sponsor research as well as media attention to hype their products. Despite all these, startups are also pulling their own weight by leaning into the advantages that they have over larger companies. This is helping them to create cheaper, and faster solutions making them worthy competitors in the AI race. Since both large and small companies each have their pros and cons, it is important to make sure that your goals align when picking which one to work at.