OpenAI is currently one of the leading players in the global artificial intelligence industry, which since 2015 has gone from being one of the Silicon Valley startups with only a name and a very ambitious goal to perhaps the main source of transformation of the technological environment, now striving to scale its activities.
Currently, the world as literally material, digital, and filled with certain deep meanings concerning the understanding of the being in its broad cosmological dimension, the space of existence of human civilization, is experiencing the so-called boom of machine intelligence. The mentioned process actually began after the debut of OpenAI’s ChatGPT in November 2022. This chatbot powered by artificial intelligence has demonstrated impressive abilities to a consumer audience. In the relevant context, it refers to the abilities associated with processing huge amounts of information and generating original content. ChatGPT continues to be one of the most popular artificial intelligence-powered chatbots in the world. At the same time, OpenAI continues to be at the forefront of moving the global machine intelligence industry forward.
The mentioned startup has ambitious plans for the future. Last month, OpenAI chief executive officer Sam Altman, along with United States President Donald Trump, SoftBank CEO Masayoshi Son, and Oracle Chairman Larry Ellison announced the $500 billion Stargate project. This project provides for the construction of artificial intelligence data centers and other infrastructure. It is expected that the relevant initiative will contribute to the development of the US machine intelligence industry and strengthen its position at the global level. In this case, OpenAI is one of the sources of movement towards the relevant goals.
A startup led by Sam Altman, which is based in San Francisco, has recently stepped up its international expansion and scaling activities within the United States. OpenAI already has offices in Paris, Singapore, London, Brussels, Tokyo, Dublin, Seattle and New York. Moreover, the startup has diversified its activities into several industries. In this case, it means government contracts, the defense industry, and business automation in various sectors. Also in the current month, the startup entered into a joint venture with SoftBank. In this case, the goal is to integrate artificial intelligence agents into the business workflows of enterprise clients.
It is worth noting that everything that has been mentioned is not the only content of OpenAI’s activities, which is probably heading for a gradual transformation into a multifunctional technology giant. The startup is also diving into hardware. OpenAI is developing its own custom artificial intelligence chip. In this case, the goal is to reduce dependence on Nvidia products, which account for 80% of the AI microcircuits market. It is worth noting that the mentioned company is one of the main beneficiaries of the artificial intelligence boom. Last year, Nvidia’s market capitalization crossed the historical mark of $3 trillion. Chips are necessary for training and ensuring the process of subsequent functioning of artificial intelligence systems.
Sam Altman also collaborates with former Apple design chief Jony Ive. The goal of the mentioned collaboration is to develop a device powered by artificial intelligence. It is currently known that a mobile phone is not meant in this case.
Sam Altman’s meetings with heads of state around the world are also a characteristic feature. This practice is not typical for chief executive officers of startups.
At the same time, large-scale ambitions and intensive activities in various areas that are clearly promising in the context of the development of the global technology sector do not mean and do not guarantee strictly positive prospects and do not signal that OpenAI has unshakeable opportunities to implement its plans. In the context of the relevant statement, it is worth mentioning that the startup has lost several co-founders and key members of the original staff such as chief scientist Ilya Sutskever, who was part of Nobel laureate Geoffrey Hinton’s select AI team at the University of Toronto. They were replaced by corporate types.
Also, OpenAI has so far demonstrated financial performance, which is difficult to characterize as the dynamic of moving towards an economically trouble-free future. At the same time, the financial component of activities in the technology industry is a critically important resource, without which the implementation of any plans is impossible. As noted by the media, the startup is bleeding money. At the same time, it’s worth noting that OpenAI’s initial plans did not envisage the ChatGPT developer becoming profitable by 2025. As of today, the startup has raised $21.9 billion. OpenAI is expected to lose a total of $44 billion. The startup plans to become profitable in 2029. Revenue is projected to reach $100 billion by the mentioned year. The relevant information is contained in financial documents that were published by the media in October last year.
OpenAI plans to spend over $200 billion by the end of the current decade. From 60% to 80% of this amount will be used for training or running artificial intelligence models. It is worth noting that the mentioned figures exclude stock compensation costs. Employee compensation exceeded $700 million last year. The corresponding figure is expected to grow as OpenAI plans to increase hiring.
Currently, the relevant question is whether the startup, led by Sam Altman, will follow the path of Amazon in e-commerce, which began with book sales but did not make a profit for almost a decade, even after it went public. However, Amazon is currently an e-commerce giant and one of the largest players in the global technology sector. At the same time, there is a risk that OpenAI will repeat the experience of a provider of coworking spaces, WeWork, which in its heyday had a valuation of $47 billion, but eventually declared bankruptcy.
It is worth noting that there is no consensus among experts about the prospects of a startup led by Sam Altman. Akash Nigam, chief executive officer of Genies, said during a conversation with media representatives that the trajectory of OpenAI’s development resembles the early years of Google’s existence. In this case, it is implied that the mentioned Internet search giant at the initial stage of its history operated at a loss, aggressively expanding infrastructure and research to dominate the area of transformative technologies. Akash Nigam also noted that Google has made significant financial injections into data centers, search algorithms, and global expansion. According to him, OpenAI is doing the same in the area of artificial intelligence. He noted that the machine intelligence industry could become as foundational as internet search in the early 2000s, if not already.
Akash Nigam stated that the question at present is not only profitability but also positioning for long-term market dominance. According to him, with growing adoption, enterprise partnerships, and diversified revenue streams, OpenAI is well on its way.
Mithilesh Ramaswamy, an AI and security engineer at Microsoft, is optimistic about the prospects of a startup led by Sam Altman. The relevant statements were made during communication with media representatives. According to him, as he watches the trajectory of OpenAI, he can’t help but think about SpaceX, which was also spending cash at an alarming rate, pushing the boundaries of what was considered possible and facing constant skepticism. Mithilesh Ramaswamy said that the startup, led by Sam Altman, is seminally building the infrastructure for a new kind of intelligence, and it’s not cheap. He noted that in this case, the losses are eye-watering, like the first failures with SpaceX rockets, but in the long run they will be successful.
At the same time, not everyone is optimistic about the prospects of OpenAI. Andy Cwik, co-founder, and chief executive officer of Hubub, said during a conversation with media representatives that the startup, led by Sam Altman, will have to compete with equally powerful open-source artificial intelligence models such as Llama from Meta, which are available for free. It was also noted that the real value appears to be in whatever apps are built on top of the models, for example, a digital assistant, not the underlying foundation model, which is what OpenAI develops. Andy Cwik suggests that Sam Altman has not a record of building great apps. According to the chief executive officer of Hubub, OpenAI is likely to fail, especially considering the enormous amount of money that the startup has raised and the requisite returns those raises require.
Nathan Brunner, chief executive officer of Boterview, was very pessimistic about the prospects of the ChatGPT developer during a conversation with media representatives. In this context, it was noted that there is no secret sauce in the artificial intelligence models elaborated by OpenAI. Nathan Brunner stated that open-source competitors such as DeepSeek and Mistral AI are closing the gap. It was also noted that as AI models become commoditized, the value will eventually shift to the app layer.
Nathan Brunner does not think that OpenAI is well-positioned to win the product war. In this context, it was noted that the startup does not have a powerful distribution system like Alphabet, Meta, or Microsoft. Alphabet can distribute artificial intelligence with Google, Chrome, Android, and YouTube. Microsoft can do this via Windows, Bing, Edge, and LinkedIn. Meta can distribute artificial intelligence via Facebook, Instagram, WhatsApp and Quest. Nathan Brunner stated that this simply looks like a losing battle for OpenAI.
The ChatGPT developer continues to be on track to achieve its more than ambitious goals. For this reason, it is too early to draw any conclusions about the successes or failures of the startup, which activities in 2022 have become a source of a sharp acceleration in the movement of the artificial intelligence industry forward in what can be called a fundamental evolution.
As we have reported earlier, Elon Musk-Led Group Makes $97.4 Billion Bid for Control of OpenAI.
