Using third party APIs is a fun way to add additional features and complexity to software. Although there are obvious benefits, strategically for any business this path almost always has inherent platform risks. Pretty much any developer worth their salt has experienced a rug pull or price increase from a third party that either renders their application useless or, at the very least, requiring something of a rewrite to re-enable that missing function.
The recent changes at Twitter related to their API pricing is one such example, with Reddit very closely following suit - (apparently inspired by Musk). Both of these platforms right now have Network effects that mean they no longer need to provide comprehensive APIs to third parties. The data that the rest of us willingly provide for free is valuable, so why make it easy for others to grab that data and build on top of their service?
At their infancy APIs provide growth vehicles for many online businesses. Tweetdeck for example was born out of api provision for twitter, which was later acquired. A metric ton of other apps across the web have historically integrated with the generous offerings via their API. However not every app which provides a new interface to a service meets a similar fate.
Many of you will have read this week that the stand alone client app Apollo for Reddit did not share such a fairy tale acquisition ending.
The developer APIs for Facebook prior to the Cambridge Analytica scandal were extensive and designed to do also provide additional growth for the service and many developers optimistically built applications on top of all these public apis, before they got canned.
Fundamentally, if an API is free or low cost, developers need to remember that they are often just a marketing tool to help reach the market.
Since the dawn of time this trend has been apparent. Business provides a shiny API, developers get a hard-on and build on top or it. Tons of applications using that api in turn help introduce a new audience to the app. Company turns API off, keeps the audience.
Which takes us neatly to ChatGPT and OpenAI. Can we guess what their strategy looks like at the moment?
And here we all are, expecting those most deliciously simple APIs to exist until the end of time. Now maybe I'm wrong, maybe I'm old and jaded, but given the API is a loss leader currently given the cost, at the very least the pricing cog of pain at some point in the future is going to need turned. At its worst, it goes away completely having sucked the river of data dry in the process.
From their perspective the API is not only going to be a brand building exercise to reach the mass market but also one designed to ingest additional information and improve the underlying model. How many businesses are going to end up providing the keys to their Kingdom off the back of that? As the saying goes fool me once..
Thankfully many open source AI frameworks are out there providing alternatives and competition, which is undoubtedly helping at least for now to keep OpenAI on their toes, but for those blindly building on their platform without looking at the road ahead the great AI API reckoning is only a matter of time.