Sam Altman on the Paul Graham advice that saved Open AI: “Always make an API”

Four years into OpenAI, Sam Altman and the team realized that they would have to build a really big company to fund the development of their increasingly capital-intensive foundation models.

“We had this model called GPT-3,” Sam recalls. “I was turning up the urgency on the company to try and figure out a product, and we just couldn’t. It was cool, but it wasn’t good enough to make something that worked.”

Then Sam remembered a piece of advice from Y Combinator founder Paul Graham that stuck with him: “You should always make an API. No matter what, you should make an API. Good stuff will happen.”

Out of ideas for a product, the OpenAI team decided to make GPT-3 available as an API.

“Maybe somebody will figure out something to do with it,” Sam thought.

A few copywriting applications like Jasper and Copy AI did take off using the GPT-3 API, but OpenAI also noticed interesting behavior that eventually became a sleeper hit:

“Some people — not a lot — would just chat with that thing all day,” Sam explains. “It wasn’t very good but there was clear user signal that people wanted to talk to the models. And given that that was the only thing besides copywriting that had real traction, we said, ‘Maybe this is just he product we should build.’”

On November 30, 2022, ChatGPT was released to the public as a “research preview” using a model from the GPT-3.5 series. It reached over a million users in five days.

Full video: Khosla Ventures “Where is AI Taking Us? | Sam Altman & Vinod Khosla“ (Sep 2025)