OpenAI completed at Shipmas, faces tough challenges towards 2025

OpenAI’s 12 Days of Shipmas, which concluded on Friday, was a refreshing end to the year. The marketing blitz served as a way for the high-profile and controversial AI startup to show that it can have fun and release a wide range of new features and tools.

But as the calendar changes, the company faces some serious challenges. Most notably, co-founder Elon Musk, who currently runs rival startup xAI, is in the midst of a bitter legal battle with OpenAI CEO Sam Altman, and is currently in the midst of a bitter legal battle with OpenAI CEO Sam Altman. This could have a major impact on the future.

The threat Mr. Musk poses to OpenAI is even more significant given the enormous influence that the world’s richest man will assume as a member of the incoming Trump administration.

In recent months, Musk has filed lawsuits. microsoft-Supported OpenAI and asked the court to prevent the company from transitioning from a nonprofit to a for-profit corporation. In a post on X, he described the effort as a “complete scam” and claimed that “OpenAI is evil.” At the New York Times’ Dealbook Summit earlier this month, Altman said he views xAI as a “strong competitor.”

The pressure on OpenAI is primarily related to the $157 billion valuation the company has achieved in the two years since it launched its viral chatbot ChatGPT, sparking a generative AI boom. OpenAI closed its latest round of $6.6 billion in October and is poised to compete aggressively with xAI and Microsoft. google, Amazon and Anthropic, a market expected to exceed $1 trillion in revenue within 10 years.

Along with the drama swirling around OpenAI and Altman, the Shipmas furore served as a way for the company to shift focus to its technology and generate buzz for its products.

The most significant release of the 12 days was the public availability of Sora, OpenAI’s much-hyped video generation tool, on December 9th.

Sora, first announced by OpenAI in February, is relatively easy to use. The user inputs the desired scene and the engine returns a high-resolution video clip. Sora can also create clips inspired by still images, enhance existing videos, and fill in missing frames. Although other AI video tools are available, Sora is the most promising due to the power of OpenAI’s large language models.

On Wednesday, OpenAI gave users a new way to converse with the viral chatbot 1-800-CHATGPT. OpenAI says users in the United States can dial that number (1-800-242-8478) for free for 15 minutes each month, and WhatsApp users around the world can use the same number to send messages to the chatbot.

Other announcements include the full release of OpenAI’s new o1 AI model focused on inference, a demo of video and screen sharing options in ChatGPT’s advanced audio mode, and the ability to organize work into “projects” within ChatGPT. , extensive deployment of ChatGPT Search, and more. New developer tools. The company also used its marketing efforts to talk about its integration with Apple on the iPhone, iPad, and macOS.

OpenAI on Friday announced its latest Frontier models, the o3 and o3 mini, capping off a 12-day release. Altman said in a livestream that the company will not release these models to the general public on Friday, but will make them available immediately for public safety testing.

The company launched o1 in September, but in moving directly to o3, Altman said it continues “OpenAI’s grand tradition of being really, really bad with names.”

The campaign was praised by some as the company’s ability to make a strong push at the end of the year, but others criticized it for being significantly more hype than substance. In any case, OpenAI is well aware that competition is increasing rapidly.

One of its main competitors, Amazon-backed Anthropic, was founded by early OpenAI researchers and has attracted top talent. In May, OpenAI safety leader Jan Reich left OpenAI for Anthropic, and in August, OpenAI co-founder John Schulman announced he was leaving to join a rival startup. did. They are part of a wave of resignations that culminated in September, when three top leaders announced their resignations on the same day, most notably head of technology Mira Murati.

OpenAI has ceded market share in enterprise AI this year, dropping from 50% to 34%, while Anthropic has doubled its market share from 12% to 24%, according to a recent report by Anthropic investor Menlo Ventures. The findings came from a survey of 600 IT decision makers at companies with 50 or more employees, according to the report.

One key area where the two companies are poised to square off is defense, as AI companies reverse previous military bans on their products and forge partnerships with industry giants and the U.S. Department of Defense. is.

The day before OpenAI’s Shipmas event began, the company announced a partnership with Anduril to enable the defense technology provider to deploy advanced AI systems for “national security missions.” Last month, human and defense software vendors Palantir announced a partnership with Amazon Web Services to “provide access to U.S. intelligence and defense agencies” to Anthropic’s AI systems.

However, the main battle is still on the user side. Altman publicly stated earlier this month that OpenAI currently has 300 million weekly active users. The company is reportedly targeting 1 billion users in the next year.

This level of growth will likely require expensive marketing efforts and rapid feature releases as the company moves forward on a two-year timeline to transition from a nonprofit to a fully for-profit company. Earlier this month, OpenAI announced it had hired its first chief marketing officer, acquiring Kate Ruesch from cryptocurrency firm Coinbase.

Additionally, OpenAI’s relationship with Microsoft, its lead investor and major cloud provider, is becoming increasingly complex. Although both companies continue to tout the value of their close partnership, signs of tension are growing.

After Altman was abruptly but briefly expelled from OpenAI late last year, reports surfaced that Microsoft CEO Satya Nadella had not been briefed. After Altman’s quick return, OpenAI gave Microsoft a non-voting board seat. Microsoft relinquished the position in July.

In March, Nadella brought on Mustafa Suleiman, who co-founded the AI ​​research company DeepMind and sold it to Google in 2014. Suleiman later co-founded and led the startup Inflection AI, which was effectively acquired by Microsoft.

In its annual report published in July, Microsoft cited OpenAI as a competitor, citing long-time giant peers Amazon, Apple, Google, and others. meta. And in October, OpenAI introduced search functionality within ChatGPT, making it more competitive with search engines like Google and Microsoft’s Bing.

But the most troubling issue heading into the new year is likely to involve Mr. Musk, who has become a regular at President-elect Donald Trump’s Mar-a-Lago, Florida, resort since the election.

President Trump previously rescinded President Joe Biden’s AI Executive Order, issued in October 2023, which introduced new safety assessments, equity and civil rights guidance, and research on AI’s labor market impact. He said then.

Musk, along with former Republican presidential candidate Vivek Ramaswamy, will lead the Trump administration’s Department of Government Efficiency (DOGE), which is expected to function as an advisory body. His new role could go to Musk, who also serves as president. tesla It owns SpaceX and social media company

“I’m starting to feel like The @DOGE has real potential,” Musk posted on X last month.

OpenAI has not commented on the matter, and Musk did not respond to a request for comment.

Spotlight: OpenAI launches ‘Shipmas’