OpenAI is done with Shipmas, and 2025 faces daunting challenges

“OpenAI”12 Days Shipmas”, which ended on Friday, provided a sense of ease to end the year. The marketing blitz has allowed this high-profile and controversial AI startup to show that it can deliver a wide range of new features and tools while having a little fun at the same time.

But when the calendar changes, the company faces serious challenges. First of all, there is the co-founder Elon Muskwho currently runs a competing startup xAI and is in the process of doing so fierce legal battle with OpenAI CEO Sam Altman, which could have a major impact on the company's future.

The threat Musk poses to OpenAI is even more significant given the enormous influence the world's richest person will be able to assume under a future Trump administration.

Musk has sued in recent months Microsoft-OpenAI and supported asked the court to stop the company from converting from a not-for-profit company to a for-profit company. In posts on X he described this effort as a “total fraud” and he claimed that “OpenAI is evil.” At the New York Times DealBook Summit earlier this month, Altman he said sees xAI as a “fierce competitor.”

Much of the pressure on OpenAI stems from its $157 billion valuation, achieved in the two years since the company launched its viral ChatGPT chatbot and ignited the generative artificial intelligence boom. OpenAI closed its latest $6.6 billion round in Octoberpreparing for aggressive competition with xAI and Microsoft, Google, Amazon and anthropic in the market it is expected to exceed $1 trillion revenues within a decade.

In addition to the drama surrounding OpenAI and Altman, the Shipmas shtick was a way for the company to focus on technology and generate buzz for its products.

The most significant publication within 12 days was the public premiere SoraOpenAI's hugely popular video generation tool, December 9.

Using Sora, which OpenAI first announced in February, is relatively simple: the user types in the desired scene and the engine returns a high-resolution video clip. Sora can also create clips inspired by still images and extend existing videos or fill in missing frames. While there are other video AI tools available, Sora is by far the most anticipated solution due to the capabilities of OpenAI's large language models.

On Wednesday, OpenAI made available to users, among others: a new way to talk to a viral chatbot: 1-800-CHATGPT. According to OpenAI, people in the US can dial (1-800-242-8478) for 15 minutes free per month, and WhatsApp users around the world can send messages to the chatbot on the same number.

Other announcements included the full release of OpenAI's new reasoning-focused AI o1 model, a demonstration of video and screen sharing options in ChatGPT's advanced voice mode, the ability to organize work into “Projects” within ChatGPT, broader rollout ChatGPT Search and new development tools. The company also used a marketing push to talk about it integration with Apple for iPhone, iPad and macOS.

OpenAI ended its 12-day release cycle on Friday, announcing its latest models, the o3 and o3 mini. On live broadcastAltman said the company would not publicly release the models on Friday, but would make them available immediately for public safety testing.

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

In some corners, the campaign was praised for the company's ability to make a strong year-end push, while in others it was criticized as far more hype than substance. Either way, OpenAI is well aware that competition is growing – and fast.

One of its main rivals, Amazon-backed Anthropic, was founded by early OpenAI researchers and is attracting top talent. In May, OpenAI security leader Jan Leike left OpenAI for Anthropic, and in August OpenAI co-founder John Schulman announced that departure join a competitive startup. They were part of a wave of departures that culminated in September, when three top leadersin particular, chief technology officer Mira Murati, announced their departure on the same day.

A recent report from investor Anthropic Menlo Ventures found that OpenAI transferred market share this year, enterprise AI dropped from 50% to 34%, while Anthropic doubled its market share from 12% to 24%. According to the report, the results come from a survey of 600 IT decision-makers at enterprises with 50 or more employees.

One key area where the two companies appear poised to go head-to-head is defense, as AI companies roll back previous bans on the military use of their products and forge partnerships with big industry players and US Department of Defense.

The day before the start of the Shipmas OpenAI event, the company announced cooperation with Andurilenabling a defense technology provider to deploy advanced artificial intelligence systems for “national security missions.” Last month, an anthropic and defense software provider Palantir announced a partnership with Amazon Web Services to “provide U.S. intelligence and defense agencies with access” to Anthropic's artificial intelligence systems.

However, the main battle is still on the user side. Altman he said publicly earlier this month, OpenAI now has 300 million weekly active users. According to reports, the company is planning to do this within the next year is aiming for 1 billion.

This level of growth will likely require expensive marketing efforts and the rapid rollout of new features as the company progresses on its two-year timeline to transition from a nonprofit to a fully for-profit company. Earlier this month, OpenAI announced it was hiring first director of marketinggrabbing Kate Rouch from a crypto company Coinbase.

In addition, there is an increasingly complicated relationship with Microsoft, the main investor of OpenAI and a key provider of cloud solutions. While both companies continue to tout the value of their close partnership, there are growing signs of tension.

Following Altman's abrupt but short-lived ouster from OpenAI late last year, reports emerged that the Microsoft CEO Satya Nadella was not informed in advance. After quickly reinstating Altman, OpenAI gave Microsoft a non-voting seat on its board. Microsoft he resigned position in July.

In March, Nadella brought on Mustafa Suleyman, who co-founded the artificial intelligence research firm DeepMind and sold it to Google in 2014. Suleyman, who later co-founded and headed the startup Inflection AI, was effectively acquired by Microsoft.

In its annual report published in July, Microsoft listed OpenAI as a competitor, adding the company to a list that has for years included megacap companies: Amazon, Apple, Google and Meta. And in October OpenAI debuted the search feature in ChatGPT this allows it to better compete with search engines such as Google AND Microsoftwith Bing.

But the toughest issue in the new year likely concerns Musk, who is a permanent member of the president-elect's office Donald Trump Mar-a-Lago resort in Florida since the election.

Trump has said in the past that he would impeach the president Joe Biden AI executive order, released in October 2023, which introduced new security assessments, equality and civil rights guidelines, and research on the impact of artificial intelligence on the labor market.

Musk is expected to lead the Trump administration's Department of Government Effectiveness (DOGE), which will serve as an advisory office, along with former Republican presidential candidate Vivek Ramaswamy. His new role could be given to Musk, who is also running Tesla and SpaceX, and owns social media company X, influences the budgets, staffing, and regulations of federal agencies in a way that favors his companies.

“I'm starting to feel like @DOGE has real potential” – Musk sent last month

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

TO WATCH: OpenAI launches “Shipmas”