Tuesday, December 24

OpenAI is done with Shipmas and staring down daunting challenges for 2025

OpenAI’s 12 Days of Shipmas, which concluded on Friday, provided a lighthearted way to close out the year. The well-known and contentious AI startup used the marketing campaign to demonstrate that it could deliver a wide range of new tools and capabilities while still having a good time.

However, as the year progresses, the business encounters some significant obstacles. Most notably, co-founder Elon Musk, who currently leads competing startup xAI, is embroiled in a contentious legal dispute with OpenAI CEO Sam Altman that may significantly affect the company’s future.

Given how much power the richest person in the world is expected to wield as a member of the future Trump government, Musk’s threat to OpenAI is much more serious.

Musk has filed a lawsuit against Microsoft-backed OpenAI in recent months, requesting that a judge prevent the nonprofit from becoming a for-profit business. He called that endeavor a complete fraud and asserted that OpenAI is malevolent in posts on X. Altman stated earlier this month at The New York Times DealBook Summit that he sees xAI as a serious rival.

The $157 billion valuation that OpenAI has attained in the two years since launching its popular chatbot, ChatGPT, and sparking the generative AI boom is largely responsible for the strain on the firm. With the closing of its most recent $6.6 billion round in October, OpenAI is prepared to take on xAI, Microsoft, Google, Amazon, and Anthropic in a market that is expected to reach $1 trillion in sales in ten years.

In addition to the turmoil surrounding Altman and OpenAI, the firm used the Shipmas prank to draw attention to its technology and create awareness about its goods.

The most important release during the 12-day period was the December 9 public debut of OpenAI’s much anticipated video-generation tool, Sora.

It’s quite easy to use Sora, which OpenAI initially revealed in February: A user inputs a scene they like, and the engine will produce a high-definition video clip. In addition, Sora can patch in the gaps in videos or make clips based on still photos. Because of the strength of OpenAI’s massive language models, Sora has been the most anticipated of the various AI video tools available.

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On Wednesday, OpenAI introduced 1-800-CHATGPT, a new method for people to communicate with its popular chatbot. According to OpenAI, WhatsApp users worldwide can message the chatbot at the same number, and those in the United States can call the number (1-800-242-8478) for 15 minutes for free each month.

A demonstration of the video and screen-sharing features in ChatGPT’s Advanced Voice Mode, the ability to group work into Projects within ChatGPT, a broader rollout of ChatGPT Search, new developer tools, and the full release of OpenAI’s new o1 AI model centered on reasoning were among the other announcements. The company also discussed its connection with Apple for the iPhone, iPad, and macOS during the marketing campaign.

On Friday, OpenAI announced the o3 and o3 small, its newest frontier models, capping off its 12-day release schedule. Altman stated on alivestream that although the models would not be formally unveiled on Friday, they would be made accessible right away for public safety testing.

Altman claimed that by jumping directly to o3, he is carrying on the illustrious legacy of OpenAI being incredibly awful at naming. The business debuted o1 in September.

Others condemned the campaign as being far more hype than substance, while others praised it for the company’s ability to make a big year-end push. In any case, OpenAI is well aware that the rivalry is rapidly intensifying.

Founded by early OpenAI researchers, Anthropic, a major competitor supported by Amazon, has been drawing elite talent. OpenAI co-founder John Schulman revealed in August that he was going to join the competing startup, and in May, Jan Leike, the company’s safety head, left OpenAI for Anthropic. They were a part of a wave of departures that reached a peak in September when three senior executives, including Mira Murati, the chief of technology, announced their departures on the same day.

Microsoft tension

According to a recent analysis by Anthropic investor Menlo Ventures, Anthropic increased its market share from 12% to 24% in enterprise AI this year, while OpenAIced’s market share decreased from 50% to 34%. According to the paper, the findings were derived on a survey of 600 enterprise IT decision-makers from businesses with 50 or more workers.

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Defense is one crucial area where the two businesses seem ready to compete, as AI firms reverse previous prohibitions on military use of their technologies and form alliances with major industrial participants and the US Department of Defense.

OpenAI announced a collaboration with Anduril the day before its Shipmas event kicked off, enabling the defense tech business to use cutting-edge AI systems for national security operations. Anthropic and defense software provider Palantiran revealed last month that they have partnered with Amazon Web Services to make Anthropic’s AI technologies available to U.S. intelligence and defense agencies.

However, users continue to face the biggest challenge. Earlier this month, Altman stated in public that OpenAI currently boasts 300 million active users each week. The corporation is apparently aiming for 1 billion over the course of the following year.

This kind of expansion will probably necessitate a costly marketing campaign and accelerated feature releases as the business moves on with its two-year plan to become a completely for-profit organization. Kate Rouch from cryptocurrency startup Coinbase was appointed as OpenAI’s first chief marketing officer, the business said earlier this month.

The relationship with Microsoft, OpenAI’s primary cloud provider and largest investor, is also becoming more complex. Even though both businesses still emphasize the benefits of their close collaboration, tensions are growing.

There were rumors that Microsoft CEO Satya Nadella was not notified before to Altman’s sudden but brief dismissal from OpenAI late last year. Microsoft was granted a non-voting board position by OpenAI after Altman was promptly reinstated. In July, Microsoft resigned the role.

Nadellabroughton Mustafa Suleyman, who co-founded DeepMind, an AI research firm that Google purchased in 2014, spoke in March. Suleyman was successfully acquired by Microsoft after co-founding and leading the startup Inflection AI.

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Microsoft listed OpenAI as a rival in its July annual report, joining a list that has long included megacap rivals Amazon, Apple, Google, and Meta. Additionally, OpenAI launched a search function in ChatGPT in October that puts it in a better position to compete with search engines like Microsoft’s Bing and Google.

However, Musk, who has been a regular visitor to President-elect Donald Trump’s Mar-a-Lago resort in Florida since the election, is probably the most contentious subject going into the new year.

Trump has previously declared his intention to revoke President Joe Biden’s AI executive order, which was issued in October 2023 and included new safety assessments, guidelines on fairness and civil rights, and studies on the effects of AI on the labor market.

Alongside former Republican presidential candidate Vivek Ramaswamy, Musk will head the Trump administration’s Department of Government Efficiency (DOGE), which is anticipated to serve as an advice office. Musk, who also owns the social networking platform X and operates Tesla and SpaceX, may be able to influence federal agency staffing, finances, and laws in ways that benefit his businesses in his new position.

Musk blogged on X last month, and it’s beginning to seem like The @DOGE has genuine promise.

Musk didn’t reply to a request for comment, and OpenAI didn’t comment on the article.

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