How SEA’s edtech firms are taking on ChatGPT

IN FOCUS

In today’s newsletter, we look at:

• ChatGPT threatens edtech startups, but founders are unfazed
• Why Indonesia trails in AI investment in Southeast Asia
• High compute costs of genAI brings ROI into question

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Hi there,

The divide between reality and fiction seems to diminish day by day. I find it remarkable that humans are able to turn science fiction ideas into reality, whether it’s venturing into space, creating flying cars, and more recently, developing artificial intelligence that gives machines human-like speech.

In May, OpenAI unveiled its voice assistant product GPT-4o, with co-founder and CEO Sam Altman referring to the fictional AI Sky in the movie Her. It seemed clear to me where the inspiration for GPT-4o came from.

While AI voice assistants such as Siri and Alexa have been around for a while, what captivated everyone’s attention was GPT-4o’s ability to display human-like emotions through the tone of voice.

One of the applications OpenAI showcased for GPT-4o was for the edtech sector, where the AI can teach a child various concepts. This raises the issue of whether edtech startups that have developed their own AI voice assistants might be disrupted.

This brings us to our Big Story for today, where my colleague Elyssa speaks to edtech founders in Southeast Asia to find out how big a threat ChatGPT poses to their products. Some founders remain unfazed about the generative AI giant’s capabilities, as they believe they offer a differentiated product.

But other players such as CoLearn aren’t jumping to create new AI-enabled services, as a co-founder says it’s “not cheap to run an AI model.”

Meanwhile, in the Hot Take, I look at a contrarian view that genAI isn’t reducing costs for companies but, in fact, increasing them. Last week, a Gartner analyst stated that 30% of genAI projects will be abandoned at the proof-of-concept (PoC) stage by the end of 2025, mainly due to significant compute costs.

Already, global IT companies working on genAI projects for clients have stalled from scaling their PoCs to products that can go out to customers. I take a closer look at how the cost factor might hinder genAI development.

But first, the Big Story!

— Collin

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THE BIG STORY

ChatGPT threatens edtech startups, but founders are unfazed

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THE HOT TAKE

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DEEP READS

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SYNC is back, and this time, the dial’s going to eleven

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FYI

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