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

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

But when the calendar turns, the corporate faces some critical 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 huge impact on the corporate’s future.

The risk Musk poses to OpenAI is much more important contemplating the hefty quantity of affect the world’s richest individual 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 Times’ DealBook Summit earlier this month, Altman said he views xAI as a “fierce competitor.”

The strain 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 approach for the corporate to shift the main target to its expertise and generate buzz for its merchandise.

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

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

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

Other bulletins included the total launch of OpenAI’s new o1 AI mannequin targeted on reasoning, a demo of video and screen-sharing choices in ChatGPT’s Advanced Voice Mode, the flexibility to prepare work into “Projects” inside ChatGPT, a wider rollout of ChatGPT Search and new developer instruments. The firm 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 obtainable for public security testing.

The firm 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 means to make a robust year-end push, and criticized by others as considerably extra hype than substance. Either approach, OpenAI is effectively conscious that competitors is heating up — and shortly.

One of its chief rivals, Amazon-backed Anthropic, was based by early OpenAI researchers and has been attracting high expertise. In May, OpenAI security chief Jan Leike left OpenAI for Anthropic, and in August, OpenAI co-founder John Schulman introduced he was leaving to hitch 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 12 months 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 corporations with 50 or extra staff, in response to the report.

One key space the place the 2 corporations seem poised to go head-to-head is in protection, as AI corporations stroll again earlier bans on navy use of their merchandise and enter into partnerships with large gamers within the business and the U.S. Department of Defense.

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 methods for “nationwide safety missions.” Last month, Anthropic and protection software program vendor Palantir introduced a partnership with Amazon Web Services to “present U.S. intelligence and protection companies entry” to Anthropic’s AI methods.

The major battle, although, continues to be for customers. Altman said publicly earlier this month that OpenAI now has 300 million weekly energetic customers. Over the following 12 months, the corporate is reportedly targeting 1 billion.

That degree of development will seemingly require an expensive advertising and marketing push and fast-tracked function 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 sophisticated relationship with Microsoft, OpenAI’s lead investor and key cloud supplier. While each corporations 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 12 months, stories surfaced that Microsoft CEO Satya Nadella was not briefed beforehand. After Altman was shortly 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 printed 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 higher compete with engines like google like Google and Microsoft‘s Bing.

But the thorniest situation heading into the brand new 12 months seemingly includes 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 previously 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 affect on the labor market.

Musk is about to to guide the Trump administration’s Department of Government Efficiency (DOGE), which is predicted to operate as an advisory workplace, alongside onetime Republican presidential candidate Vivek Ramaswamy. His new position may give Musk, who additionally runs Tesla and SpaceX and owns social media firm X, affect over federal companies’ budgets, staffing and rules in ways in which favor his corporations.

“Starting 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’