200 Million Dollar Lesson in Brand Trust
Earlier this month, when Anthropic refused the Pentagon’s demand to remove ethical guardrails from ClaudeAI, it lost a 200 million dollar contract overnight. Ouch!
Within hours, OpenAI, parent of ChatGPT, stepped in and took the deal.
Smart business move by ChatGPT’s Sam Altman? Not really.
- ChatGPT uninstalls surged 295%
- Social media was alight with calls to “cancel ChatGPT”
- Key staff quit Open AI
- Claude hit number one on the App Store for the first time ever
- Claude installs rose by 51%
- 36% increase in revenue for Anthropic in just two weeks
Trust Vs Profit
This is not a new story for brand equity watchers. At huge cost, Johnson & Johnson recalled 31 million bottles of Tylenol, and gained an invaluable long term reputation as the guardian of America’s public health. Patagonia told customers not to buy its products during Black Friday sales. Nike put Colin Kaepernick on its billboards while the stock was falling. In each case, the short-term loss was visible and measurable. The long-term gain was something ultimately more valuable. You can’t put a number on consumer trust.
This is the brand loyalty that comes from watching a company absorb a hard financial hit and hold its line anyway.
Consumers have become sophisticated readers of corporate behaviour. They know the difference between a brand that talks about values and one that walks them.
In the face of overwhelming consumer backlash, Altman publicly admitted his move “looked opportunistic and sloppy” and has rolled back back his Pentagon support. The damage to the ChatGPT brand may be harder to recover.
Integrity is not the enemy of growth. It is the foundation of it.
Designhouse has partnered with FTSE 250 companies and global enterprises for over 50 years. We create brand identities that are authentic and long lasting. If you’d like to discuss your brand challenges, we’d be glad to talk.
