OpenAI is done with Shipmas, faces daunting challenges for 2025

OpenAI’s “12 Days of Shipmas,” which wrapped up on Friday, introduced a way of levity to finish the yr. The advertising and marketing blitz served as a means for the high-profile and controversial AI startup to indicate it may launch an in depth roster of recent options and instruments whereas additionally having some enjoyable.

However when the calendar turns, the corporate faces some severe challenges. Most notably, there’s co-founder Elon Musk, who now runs rival startup xAI, and is within the midst of a heated legal battle with OpenAI CEO Sam Altman that would have a big effect on the corporate’s future.

The menace Musk poses to OpenAI is much more vital contemplating the hefty quantity of affect the world’s richest particular person is poised to imagine as a part of the incoming Trump administration.

In latest months, Musk has sued Microsoft-backed OpenAI and asked a court to cease the corporate from changing to a for-profit company from a nonprofit. In posts on X, he described that effort as a “whole rip-off” and claimed that “OpenAI is evil.” At The New York Occasions’ DealBook Summit earlier this month, Altman said he views xAI as a “fierce competitor.”

The stress on OpenAI is tied largely to its $157 billion valuation, achieved within the two years for the reason that firm launched its viral chatbot, ChatGPT, and kicked off the increase in generative AI. OpenAI closed its latest $6.6 billion round in October, gearing as much as aggressively compete with xAI in addition to Microsoft, Google, Amazon and Anthropic in a market that is predicted to top $1 trillion in income inside a decade.

Alongside the drama swirling round OpenAI and Altman, the Shipmas shtick served as a means for the corporate to shift the main target to its expertise and generate buzz for its merchandise.

Essentially the most vital launch over the 12 days was the general public launch of Sora, OpenAI’s much-hyped video-generation device, on Dec. 9.

Utilizing Sora, which OpenAI first introduced in February, is comparatively easy: A consumer varieties out a desired scene, and the engine will return a high-definition video clip. Sora may create clips impressed by nonetheless pictures and lengthen present movies or fill in lacking frames. Whereas different AI video instruments can be found, Sora has been by far probably the most anticipated due to the facility of OpenAI’s giant language fashions.

On Wednesday, OpenAI gave customers a new way to talk to its viral chatbot: 1-800-CHATGPT. These within the U.S. can dial the quantity (1-800-242-8478) for quarter-hour free per 30 days, OpenAI mentioned, and WhatsApp customers globally can message the chatbot on the similar quantity.

Different bulletins included the complete launch of OpenAI’s new o1 AI mannequin targeted on reasoning, a demo of video and screen-sharing choices in ChatGPT’s Superior Voice Mode, the flexibility to prepare work into “Tasks” inside ChatGPT, a wider rollout of ChatGPT Search and new developer instruments. The corporate additionally used the advertising and marketing push to speak about its integration with Apple for the iPhone, iPad and macOS.

OpenAI closed out its 12-day run of releases on Friday by saying its latest frontier mannequin, o3, in addition to o3 mini. On a livestream, Altman mentioned the corporate wouldn’t publicly launch the fashions Friday however would make them instantly accessible for public security testing.

The corporate launched o1 in September, and in skipping straight to o3, Altman mentioned he is persevering with “the grand custom of OpenAI being actually, actually dangerous at names.”

The marketing campaign was celebrated in some corners for the corporate’s potential to make a powerful year-end push, and criticized by others as considerably extra hype than substance. Both means, OpenAI is effectively conscious that competitors is heating up — and rapidly.

One among its chief rivals, Amazon-backed Anthropic, was based by early OpenAI researchers and has been attracting high expertise. In Might, OpenAI security chief Jan Leike left OpenAI for Anthropic, and in August, OpenAI co-founder John Schulman introduced he was leaving to affix the rival startup. They have been a part of a wave of exits that culminated in September, when three top leaders, most notably expertise chief Mira Murati, introduced their exits on the identical day.

A latest report by Anthropic investor Menlo Ventures discovered that OpenAI ceded market share this yr in enterprise AI, declining from 50% to 34%, whereas Anthropic doubled its market share from 12% to 24%. The outcomes got here from a survey of 600 enterprise IT decision-makers from firms with 50 or extra staff, in response to the report.

One key space the place the 2 firms seem poised to go head-to-head is in protection, as AI firms stroll again earlier bans on army use of their merchandise and enter into partnerships with large gamers within the trade and the U.S. Division of Protection.

The day earlier than OpenAI’s Shipmas occasion started, the corporate announced a partnership with Anduril, permitting the protection tech supplier to deploy superior AI techniques for “nationwide safety missions.” Final month, Anthropic and protection software program vendor Palantir introduced a partnership with Amazon Net Providers to “present U.S. intelligence and protection companies entry” to Anthropic’s AI techniques.

The first battle, although, continues to be for customers. Altman said publicly earlier this month that OpenAI now has 300 million weekly lively customers. Over the subsequent yr, the corporate is reportedly targeting 1 billion.

That degree of development will seemingly require an expensive advertising and marketing push and fast-tracked characteristic launches, as the corporate advances in its two-year timeline for transitioning from a nonprofit into a completely for-profit firm. Earlier this month, OpenAI introduced it had employed its first chief marketing officer, nabbing Kate Rouch from crypto firm Coinbase.

Then there’s the more and more difficult relationship with Microsoft, OpenAI’s lead investor and key cloud supplier. Whereas each firms proceed to tout the worth of their shut partnership, there are rising indicators of rigidity.

Following Altman’s abrupt however short-lived ouster from OpenAI late final yr, experiences surfaced that Microsoft CEO Satya Nadella was not briefed beforehand. After Altman was rapidly reinstated, OpenAI gave Microsoft a non-voting board seat. Microsoft relinquished the place in July.

In March, Nadella brought on Mustafa Suleyman, who had co-founded AI analysis firm DeepMind and offered it to Google in 2014. Suleyman, later co-founded and led startup Inflection AI, and was successfully acquihired by Microsoft.

In its annual report revealed in July, Microsoft named OpenAI as a competitor, including the corporate to a roster that for years has included megacap friends Amazon, Apple, Google and Meta. And in October, OpenAI debuted a search feature within ChatGPT that positions it to raised compete with serps like Google and Microsoft‘s Bing.

However the thorniest difficulty heading into the brand new yr seemingly entails Musk, who has been a fixture at President-elect Donald Trump’s Mar-a-Lago resort in Florida for the reason that election.

Trump has mentioned prior to now that he would repeal President Joe Biden’s AI govt order, issued in October 2023, which launched new security assessments, fairness and civil rights steerage and analysis on AI’s impression on the labor market.

Musk is ready to to guide the Trump administration’s Division of Authorities Effectivity (DOGE), which is anticipated to operate as an advisory workplace, alongside onetime Republican presidential candidate Vivek Ramaswamy. His new function might give Musk, who additionally runs Tesla and SpaceX and owns social media firm X, affect over federal companies’ budgets, staffing and laws in ways in which favor his firms.

“Beginning to really feel like The @DOGE has actual potential,” Musk posted on X final month.

OpenAI didn’t present a remark for the story, and Musk did not reply to a request for remark.

WATCH: OpenAI begins ‘Shipmas’