Is OpenAI on a downward trend?
Forced to chase profit, the pivotal AI startup is up against stiff competition and diminishing technological returns


If one company can be said to have walked away the winner of the generative AI boom of the past few years, it’s OpenAI. The startup, which was founded as a non-profit with a mission to drive progress toward artificial general intelligence – aka a conscious machine – has led the pack of generative AI developers since it launched ChatGPT in 2022 and quickly became a household name.
But in recent months, more and more questions have been raised about the viability of OpenAI in the long term. As some of the biggest companies in the world look to pin down AI return on investment, OpenAI is still laying out its exact profit model. Can it keep its AI crown? Or is it on a downward trajectory?
In this episode, Jane and Rory look at the inner workings of OpenAI to understand how the company is faring amid strong competition and how it could perform in the next year.
Highlights
“[OpenAI] plans to be a profitable company, but as any business person will know … actually achieving that takes more than goodwill, deep intentions, and serious amounts of wishing. You've got to actually do something – and as you said earlier, there's no sort of killer app for this yet, there's no clear use case. And this is going to prove, in my opinion, to be an increasing problem for OpenAI.”
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“Of course, OpenAI isn't the only AI player in the cloud. All of this has been happening against a backdrop of an industry that’s very interested in making money off generative AI. Listeners will be aware that all of the hyperscalers have invested a lot of money in this. So that's AWS, Microsoft Azure as we mentioned, and also Google Cloud have poured billions of dollars. Into developing their own models and releasing their own AI offerings.”
“I think the difficulty for OpenAI comes back to that same question of, ‘What am I using this for?’ Because a lot of the products and a lot of the companies that you've mentioned, they actually caught people's attention with a really killer product. So Google completely conquered the search engine, made the best search engine in the world, not even close in terms of its performance compared to some of the other search engines available at the time. And at least that's how it became to be seen in the eyes of the public.”
Footnotes
- OpenAI could go bankrupt in 12 months if it doesn’t raise some serious cash – but is the Microsoft-backed AI giant too big to fail?
- OpenAI seeks $6.5 billion investment as costs continue to mount
- OpenAI just raised $6.6bn in funding, but it drove a hard bargain – investors will be stopped from funding rivals
- Enterprises are ramping up investment in private AI systems
- OpenAI tool previously thought 'too dangerous' for the public goes generally available
- OpenAI launches $20 ChatGPT Plus in search of greater revenue
- AWS bet big on Anthropic in the race against Microsoft and OpenAI, now it’s doubling down
- Amazon’s $4 billion investment in Anthropic faces UK competition probe – here’s what it means
- Meta’s Llama 3.1 promises to compete with closed source competition
- OpenAI says ads aren't coming soon – if ever
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Rory Bathgate is Features and Multimedia Editor at ITPro, overseeing all in-depth content and case studies. He can also be found co-hosting the ITPro Podcast with Jane McCallion, swapping a keyboard for a microphone to discuss the latest learnings with thought leaders from across the tech sector.
In his free time, Rory enjoys photography, video editing, and good science fiction. After graduating from the University of Kent with a BA in English and American Literature, Rory undertook an MA in Eighteenth-Century Studies at King’s College London. He joined ITPro in 2022 as a graduate, following four years in student journalism. You can contact Rory at rory.bathgate@futurenet.com or on LinkedIn.
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