March 23, 2023

Running into a Fire: OpenAI Has No SLA

The frenzied pace by which technology providers are developing new copilot applications like OpenAI is nothing short of stunning. However, to be clear nearly every service that has been announced is still in the pilot phase. Along the way, OpenAI discloses that it’s still working on its service level agreement. This blog discusses this risk to enterprises and that’s why we call this running into the fire.

Open AI SLAs Missing in Action

Aragon held a webinar this past Wednesday and during the transfer to a presentation on DBT, I discussed the SLA offerings from Google, Microsoft, and OpenAI. Google and Microsoft both have SLAs however, OpenAI does not.

The Risk to Enterprises

Generally, inside the software, a technology provider has to offer a service agreement that discusses the service and the guaranteed availability of that service. Today OpenAI’s service has seen high demand and lots of interrupts in the availability of the service. That’s probably one of the reasons why they don’t have an SLA.

Run Away from the Fire

To us, this is a red flag that there’s still no service level agreement. It also means that enterprises that I’ve developed services based on what I may end up changing the back and language model before they ship a commercial product.

Don’t Sign Contracts Yet for Services that use OpenAI

This may seem like strong and overly protective advice, but if you’re going to sign up and pay for a service, you should at least know what the availability of the service is.

Aragon suggests that enterprises strongly temperature the excitement for OpenAI CoPilot capabilities with the risk of signing up for a service that might not work when you need it to.

Understand Pricing

The top of the service level agreement and prizes need to understand all the models they plan to leverage and the cost of using the algorithms as well as the cost for hosting. They should be calculated carefully and included in the pricing models offered to customers.

Talk to Aragon

We have been having a significant number of calls with clients to discuss all the opportunities and risks associated with large language, models, including the services and API offerings from OpenAI. It is clearly a buyer-beware environment right now, but let’s be clear, most of the offerings, except for OpenAI and Azure OpenAI service are not yet commercially available.

Bottom Line

Technology provider executive teams need to discuss the zeal for getting a product or service at the door with the risk of maybe not Meeting customer expectations. Finance, legal, and operational teams should be very clear about what they can offer and what levels of service can be guaranteed. Otherwise, customers may be unhappy. With all that said, we do expect most of the generative AI cloud offerings to be stabilized as they add additional infrastructure.