OpenAI's abrupt scaling back of its e-commerce operations earlier this month has not only raised questions about its decision-making but has also impacted several e-commerce and payment firms, including PayPal and Etsy. These companies had invested significant resources to assist the developer of ChatGPT in advancing this high-profile e-commerce initiative. They now find themselves in a difficult position as OpenAI has yet to outline a clear follow-up plan.

Taking PayPal as an example, the company had previously announced the procurement of OpenAI's technology as part of a collaboration to launch a payment settlement function within ChatGPT. An informed source revealed that although PayPal may not reap the initially anticipated benefits from the launch of this e-commerce project, its commitment as an OpenAI customer remains intact.

The shift in OpenAI's stance is just one of the risks the AI company faces as it evaluates its "non-core businesses." This ongoing assessment aims to refocus its strategic efforts more heavily on technology sales to enterprise clients. However, adjusting or abandoning projects already underway could potentially create distance between OpenAI and prospective core technology buyers.

The e-commerce business is just one instance. Multiple executives have recently indicated to staff that OpenAI is likely to halt or scale back further projects. Signs are already emerging that the company is trimming its video generation model Sora business—planning to integrate the feature into the main ChatGPT application. It remains unclear whether the company will maintain Sora as a standalone application in the long term.

Adjustments to the Sora business could affect partners linked to it. For instance, Walt Disney announced an agreement last December to license its cartoon characters for use in Sora-generated videos. As part of the deal, Walt Disney was termed a "significant customer" of OpenAI and committed to investing $1 billion in the company. Walt Disney has not responded to requests for comment.

Currently, the most directly affected parties are the e-commerce partners. As first reported by The Information, OpenAI has abandoned its original concept for a "one-click checkout" feature, which was designed to enable users to purchase goods directly within ChatGPT conversations.

Around the time the in-chat checkout plan was announced last autumn, OpenAI began collaborating with companies like PayPal, Etsy, Stripe, and Shopify. These partners provided technical support and integrated merchant products for consumer purchase. They dedicated engineering resources to build the "one-click checkout" integration system, helped organize merchant data for AI compatibility, and promoted the project to their own customers and merchants.

PayPal had planned to integrate its digital wallet as a payment option on the ChatGPT checkout page later this year and handle payment processing for in-chat transactions, thereby profiting from related activities.

According to a source familiar with the collaboration, under the agreement, PayPal had committed to increasing its investment in OpenAI, including purchasing its API services, subscribing to the enterprise version of ChatGPT, and providing access to OpenAI's code tool, Codex, for its over 24,000 employees. This part of the collaboration remains unchanged.

Another informed source stated that since OpenAI began adjusting its e-commerce features weeks ago, PayPal and OpenAI have been evaluating the best way to continue their partnership. PayPal declined to comment.

Meanwhile, Etsy has spent the past few months gradually integrating its marketplace products into ChatGPT for user purchases. The company informed investors last year that, to facilitate the launch of this e-commerce service, Etsy agreed to cover the transaction fees for sales generated through the ChatGPT channel instead of passing the cost on to its merchants.

OpenAI has indicated it still plans to retain its own checkout functionality, albeit in a more limited form than initially envisioned, offering the service only within specific retailer applications connected to ChatGPT. However, the pace of this plan's implementation is unclear, and its realization would require additional development work from e-commerce partners.

An Etsy spokesperson said the company plans to develop a dedicated application for ChatGPT but is still in discussions with OpenAI regarding the app's specific form. It is also uncertain whether OpenAI will charge merchants or e-commerce platforms various fees for sales generated through this application.

Amid OpenAI's e-commerce pullback, some partners are less affected. For example, while Stripe collaborated with OpenAI on developing the checkout feature, the company already provides payment processing services for OpenAI's individual subscription plans. This aspect of the partnership generates a substantial revenue stream for Stripe and is not directly tied to the e-commerce functionality.

Stripe intends to continue work on the "Smart Agent Commerce Agreement," a framework co-developed with OpenAI to standardize transactions completed by AI chatbots and intelligent agents.

Walmart announced a partnership with OpenAI in mid-October last year to integrate its website products into ChatGPT for user purchases. In its announcement, Walmart stated it was deploying the enterprise version of ChatGPT across its corporate teams. The previous month, OpenAI had identified Walmart as a partner in its employee AI training program. Earlier this month, Walmart announced plans to more directly integrate its own Sparky chatbot with AI conversational tools like ChatGPT.