OpenAI is done with Shipmas, faces daunting challenges for 2025

OpenAI”12 Days of Shipmas“That ended on Friday, brought a sense of lightness to end the year. The marketing blitz served as a way for the high-profile and controversial AI startup to show that it can release a wide list of new features and tools while still having some fun.

But when the calendar turns, the company faces some serious challenges. In particular, there is a co-founder Elon Muskwhich now runs rival startup xAI, and is in the middle of a heated legal battle with OpenAI CEO Sam Altman that could have a big impact on the future of the company.

The threat Musk poses to OpenAI is even more significant considering the sheer amount of influence the world’s richest person is poised to assume as part of the incoming Trump administration.

In recent months, Musk has sued Microsoft– supported OpenAI and asked a court to prevent the company from converting into a for-profit corporation from a non-profit. In the places on X, he described that effort as a “total scam” and claimed that “OpenAI is evil”. At the New York Times’ DealBook Summit earlier this month, Altman he said he sees xAI as a “fierce competitor”.

The pressure on OpenAI is largely related to its $157 billion valuation, achieved in the two years since the company launched its viral chatbot, ChatGPT, and started the boom in generative AI. OpenAI closed its last round of $6.6 billion in Octoberpreparing to compete aggressively with xAI and Microsoft, Google, Amazon and Anthropic in a market that is expected to exceed $1 trillion in revenue over a decade.

Alongside the drama swirling around OpenAI and Altman, the Shipmas shtick served as a way for the company to shift attention to its technology and generate buzz for its products.

The most significant release in the 12 days was the public launch of SoraOpenAI’s video generation tool, on December 9.

Using Sora, which OpenAI first announced in February, is relatively simple: A user types in a desired scene, and the engine will return a high-definition video clip. Sora can also create clips inspired by still images and extend existing videos or fill in missing frames. While other AI video tools are available, Sora has been the most anticipated due to the power of OpenAI’s large language models.

On Wednesday, OpenAI gave users a new way to talk with their viral chatbot: 1-800-CHATGPT. Those in the United States can dial the number (1-800-242-8478) for 15 free minutes a month, OpenAI said, and WhatsApp users around the world can message the chatbot at the same number.

Other announcements include the full release of OpenAI’s new AI model o1 focused on reasoning, a video demo and screen sharing options in ChatGPT’s Advanced Voice Mode, the ability to organize work in “Projects ” in ChatGPT, a wider launch of Search ChatGPT and new developer tools. The company also used the marketing push to talk about its integration with Apple for iPhone, iPad and macOS.

OpenAI closed its 12-day series on Friday by announcing its new flagship model, the o3, as well as the o3 mini. To a livestreamAltman said the company will not publicly launch the models on Friday, but will immediately make them available for public safety testing.

The company launched o1 in September, and by jumping straight to o3, Altman said it continues “the great tradition of OpenAI being really, really bad at names.”

The campaign was celebrated in some quarters for the company’s ability to make a strong push at the end of the year, and criticized by others as significantly more hype than substance. Either way, OpenAI is well aware that the competition is heating up — and quickly.

One of its main rivals, Amazon-backed Anthropic, was founded by the first OpenAI researchers and attracted the most talented. In May, OpenAI security chief Jan Leike left OpenAI for Anthropic, and in August, OpenAI co-founder John Schulman announced that he was leaving to join the rival startup. They were part of a wave of departures that culminated in September, when three leadersmost notably head of technology Mira Murati, announced his exit the same day.

A recent report from investor Anthropic Menlo Ventures found that OpenAI ceded market share this year in enterprise artificial intelligence, decreasing from 50% to 34%, while Anthropic doubled its market share from 12% to 24%. The results came from a survey of 600 IT business decision-makers from companies with 50 or more employees, according to the report.

One key area where the two companies seem poised to go head-to-head is in defense, as AI companies push back against earlier bans on military use of their products and enter into partnerships with major players in the industry and the United States Department of Defense.

The day before OpenAI’s Shipmas event started, the company announced a partnership with Andurilwhich allows the defense technology provider to deploy advanced AI systems for “national security missions.” Last month, anthropogenic and defense software vendor Palantir announced a partnership with Amazon Web Services to “provide US intelligence and defense access” to Anthropic’s AI systems.

The primary battle, however, is still for the user. Altman he said publicly Earlier this month OpenAI now has 300 million weekly active users. In the following year, the company is informed targeted at 1 billion.

That level of growth will likely require an expensive marketing push and quick feature launches as the company moves forward on its two-year schedule to transition from a non-profit to a fully for-profit company. Earlier this month, OpenAI announced that it had hired its first marketing managerNabbing Kate Rouch from the crypto company Coinbase.

Then there’s the increasingly complicated relationship with Microsoft, OpenAI’s main investor and key cloud provider. While the two companies continue to affirm the value of their close collaboration, there are growing signs of tension.

After Altman’s sudden but short-lived exit from OpenAI late last year, reports emerged that the Microsoft CEO Satya Nadella was not informed in advance. After Altman was quickly reinstated, OpenAI gave Microsoft a non-voting seat. Microsoft given up the position in July.

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

In its annual report published in July, Microsoft named OpenAI as a competitor, adding the company to a list that for years has included megacap peers Amazon, Apple, Google and Meta. And in October, OpenAI has debuted a search feature in ChatGPT that positions it to compete better with search engines like Google and Microsoftby Bing.

But the thorniest issue for the new year probably involves Musk, who has been an appointment in the president-elect. By Donald Trump Mar-a-Lago resort in Florida since the election.

Trump has said in the past that he would repeal the president by Joe Biden By executive order, issued in October 2023, which introduced new safety assessments, equity and civil rights guidance and research on the impact of AI on the labor market.

Musk will lead the Trump administration’s Department of Government Efficiency (DOGE), which is expected to function as an advisory office, alongside Republican presidential candidate Vivek Ramaswamy. His new role could give Musk, who also runs Tesla and SpaceX and owns the social media company X, influences the budgets of federal agencies, staffing and regulations in a way that favors their companies.

“We’re starting to feel that @DOGE has real potential,” Musk published on X last month.

OpenAI did not provide a comment for the story, and Musk did not respond to a request for comment.

WATCH: OpenAI starts “Shipmas”