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Sam Altman is seen on a mobile device screen next to an OpenAI logo in this illustration.
Can OpenAI reach 1 billion users?
How will it woo them? The startup is set to develop AI “agents” that can complete tasks for users rather than simply chat with them and launch its own search engine while further integrating ChatGPT with Apple products.
OpenAI, which Microsoft backs to the tune of $13 billion, wants to secure its financial future. (Microsoft has been building up its own internal AI capabilities and now considers OpenAI a “competitor.”) One way for OpenAI to grow is by adjusting its subscription revenue model. The company is reportedly considering expanding into advertising as a potential revenue model and hiring ad execs from top tech companies. The AI search engine Perplexity has already integrated ads into its business.
But it is also considering lowering its long-term costs by building data centers across the United States, something cofounder and CEO Sam Altman reportedly discussed with President Joe Biden at the White House in September. Chris Lehane, head of global policy at OpenAI, told the Financial Times that the company needs “chips, data and energy” to meet its expansion goals. Altman has previously expressed interest in raising trillions of dollars for a chip startup, though that hasn’t yet amounted to anything. Altman has, however, invested in Oklo, a nuclear power startup, that could power energy-intensive data centers.
Infrastructure investments could be key to a sustainable future as it grows — the company is reportedly losing billions a year training and deploying its models. But as Silicon Valley startups often go, profitability — or breaking even — could come long after achieving a user base in the billions.
An illustration of the ChatGPT logo on a phone screen, along with the US flag and court gavel.
OpenAI scores a copyright win in court
A federal judge in Manhattan last Thursday threw out a lawsuit filed by the news outlets Raw Story and AlterNet against OpenAI, alleging that the artificial intelligence startup behind ChatGPT used its articles improperly to train large language models.
Colleen McMahon, a Clinton-appointed judge in the Southern District of New York, said the plaintiffs weren’t able to demonstrate harm, though she dismissed the case without prejudice, meaning they could file a new suit in the future and try once again to establish legal standing.
The lawsuit, filed in February, didn’t allege that OpenAI engaged in copyright infringement. That was the allegation made by other news organizations including the New York Times, which sued OpenAI in December 2023 in an ongoing suit. Instead, it claimed that OpenAI violated the Digital Millennium Copyright Act by removing authors’ names and other identifying information.
It’s a small win for OpenAI as it faces a litany of copyright lawsuits from people and companies eager to prove in court that one of the richest and buzziest companies in the world got rich by stealing other people’s copyrighted work.
A heart is shown on a computer screen
Hard Numbers: Deepfakes and pig butchering, Murati starts fundraising, Checking students’ work, The nuclear option, Perplexity’s money moves
100 million: Former OpenAI CTO Mira Murati, one of the biggest names in artificial intelligence, is expected to raise $100 million for a new AI startup with few public details. Murati, who briefly served as interim CEO of OpenAI last year following Sam Altman’s short-lived ouster, resigned from OpenAI last month. Murati said she wanted to start her own “exploration” of AI when she resigned and will reportedly serve as CEO of the new venture trying to do just that.
68%: About 68% of middle and high school teachers report using an AI checker for students’ work, according to a survey from March 2024. But Bloomberg, pointing to a rising number of students who claim to have been falsely accused of writing with AI, reports that popular AI checkers have a 1-2% error rate, calling into question their reliability.
99: Nuclear energy stocks are surging because of increased demand for power by AI companies in search of new energy sources. Oklo, a US-based small modular reactor developer – which counts OpenAI CEO Sam Altman as an investor – saw its share price pop 99% last week. Nuclear energy is considered a “clean” energy source because it has no carbon emissions.
8 billion: The AI search engine Perplexity is seeking to raise $500 million in a new funding round that would value it at $8 billion. Perplexity has positioned itself not only as a rival to OpenAI and Anthropic — leading AI chatbot companies — but also to Google, the longtime leader in the search industry.Professor Ellen Moons, Secretary General at the Swedish Academy of Sciences Hans Ellegren, and Professor Anders Irback announce that John J. Hopfield and Geoffrey E. Hinton are the winners of this year's Nobel Prize winners in Physics in Stockholm, Sweden, on Oct. 8, 2024.
Hard Numbers: Nobels awarded, OpenAI’s soaring valuation, Gemini is getting fluent, Grindr’s wingmen, Supermicro’s macro sales
2: Two AI researchers, Geoffrey Hinton and John Hopfield, were awarded the Nobel Prize in Physics on Oct. 8. The pair were credited as pioneers of artificial neural networks, the machine learning technique that has powered the artificial intelligence revolution. Neural networks help computers learn by mimicking the activities of the human brain. “Thanks to their work humanity now has a new item in its toolbox, which we can choose to use for good purposes,” the Nobel committee wrote on X.
157 billion: OpenAI raised $6.6 billion last week in a new funding round led by Thrive Capital, including other investors such as Microsoft, SoftBank, and Nvidia. The company behind ChatGPT is now the second-most-valuable private company in the world, worth $157 billion, behind ByteDance ($220 billion) and just ahead of China’s Ant Group ($150 billion) and SpaceX ($125 billion).
9: Google is expanding its Gemini AI services in India. Since 40% of users there rely on voice interactions with the chatbot, the company says it will soon support not just Hindi, but nine total Indian languages — Bengali, Gujarati, Kannada, Malayalam, Marathi, Telugu, Tamil, and Urdu.
14 million: The gay dating app Grindr wants its 14 million users to have AI “wingmen.” These agents will help people find the most meaningful connections, plan dates, and — eventually — book reservations so you don’t have to lift a finger. Grindr says these features will be fully up and running by 2027 at the latest. Will your next date have to make any effort at all?
100,000: Supermicro, a company that makes servers for data centers, said it is shipping 100,000 graphics processors per quarter. The announcement sent its stock soaring more than 15% on Oct. 7, a day when the Dow Jones fell 400 points.EDMONTON, CANADA - APRIL 20: An image of a woman holding a cell phone in front of a OpenAI logo displayed on a computer screen, on April 20, 2024, in Edmonton, Canada.
OpenAI’s nonprofit days are behind it
Big changes are coming to OpenAI.
The company behind ChatGPT started as a nonprofit research lab, but its success has led to an identity crisis of late. Does it want to make money or serve a purpose beyond its bottom line?
Until now, the answer was seemingly the latter. But following a series of top executive exits — including chief technology officer Mira Murati — OpenAI is preparing to become a completely for-profit company. That change also coincides with the startup’s plans to raise more money to reach a target valuation of $150 billion.
Sam Altman, the co-founder and CEO who was booted from OpenAI by its nonprofit board of directors in 2023, regained control of the company after OpenAI employees revolted and lead investor Microsoft expressed discontent. The nonprofit board largely resigned afterward and was replaced with one friendlier to Altman. It now looks like Atlman’s reign will be as firm as ever. The executive denied reports that he’s set to receive a 7% stake in OpenAI, worth upwards of $10 billion, but the switch to for-profit might mean less beating around the bush about its money-making ambitions.
OpenAI has been running a for-profit arm since 2019 so it could get billions in investment from venture capitalists and tech investors, who reportedly prefer if OpenAI is a public-benefit corporation, a type of for-profit with a social mission, rather than a nonprofit. Now, it’s seemingly taking that decision to its natural conclusion, putting its focus on creating a sustainable business ahead of its lofty societal promises about protecting humanity from AI.Ilya Sutskever, co-Founder and Chief Scientist of OpenAI speaks during a talk at Tel Aviv University in Tel Aviv, Israel June 5, 2023.
Hard Numbers: Sutskever’s easy billion, OpenAI gets expensive, Getting AI out of the immigration system, Voice actors strike a deal
1 billion: OpenAI cofounder Ilya Sutskever has raised $1 billion for his new AI startup Safe Superintelligence, which has promised to deliver a highly advanced AI model without the distraction of short- or medium-term product launches. The company only has 10 employees so far, but it has already raised that sum from eager investors, including Andreessen Horowitz and Sequoia Capital.
2,000: OpenAI is reportedly considering a $2,000 per month subscription for its forthcoming large language models, Strawberry and Orion. Its current top model, GPT-4, is free for limited usage and $20 per month for increased usage and extra features. It’s still unclear what the new models will cost when they’re released later this fall — or, if they’re costly, whether consumers will be willing to spend that much.
141: A group of 141 organizations, including the Electronic Frontier Foundation, sent a letter to the Department of Homeland Security urging it to stop using AI tools in the immigration system and to comply with federal rules around protecting civil rights and avoiding algorithmic errors. The groups requested transparency around how the department uses AI to make immigration and asylum decisions, as well as biometric surveillance of migrants at the border.
80: Voice actors reached an agreement with the producers of 80 video games last week, after striking for two months. SAG-AFTRA, the actor’s union, won new protections against “exploitative uses” of AI. That said, it’s still striking against most of the larger video game studios, including Electronic Arts, as well as Walt Disney and Warner Bros.’s game studios.In this photo illustration, the OpenAI logo is displayed on a smartphone screen with the text artificial intelligence in the background.
OpenAI’s getting richer
OpenAI is in talks for a new funding round that could value the company over $100 billion. That would cement it as the fourth-most-valuable privately held company in the world, only behind ByteDance ($220 billion), Ant Group ($150 billion), and SpaceX ($125 billion).
Thrive Capital is leading the venture round, but Microsoft is expected to add to its existing $13 billion stake in the company. Apple and Nvidia, are also discussing investing in the ChatGPT maker. Nvidia supplies chips that OpenAI uses to train and run its models while Apple is integrating ChatGPT in its forthcoming Apple Intelligence system that'll feature on new iPhones.
OpenAI was last valued at around $80 billion in 2023 following a funding round that allowed employees to sell their existing shares. It’s unclear whether the company is currently considering an initial public offering, but if it needs tons of capital for the very costly process of developing increasingly powerful AI models, that might be a necessary step in the not-so-distant future.Tesla, X, and SpaceX's CEO Elon Musk speaks with members of the media during the AI Safety Summit at Bletchley Park in Bletchley, Britain, on Nov. 1, 2023.
Elon Musk refiles his OpenAI lawsuit
Billionaire Elon Musk is reviving a lawsuit in California federal court against OpenAI, the company he co-founded, and its CEO, Sam Altman. The lawsuit accuses OpenAI of fraud and breach of contract, among other allegations. The lawsuit casts Musk, one of the world’s richest people, as a victim of a complex scam whereby he agreed to donate $44 million of his own money, after which OpenAI, he claims, violated its non-profit mission. Musk left OpenAI in 2018 after attempting to take over the company.
In June, Musk withdrew this suit against Altman for unknown reasons, but the new filing includes federal racketeering allegations against Altman and co-founder Greg Brockman. OpenAI said that Musk has understood OpenAI’s mission and direction from the beginning, and that his donation was not coerced.
Musk now runs xAI, a company he hopes will rival OpenAI, and has AI interests with his automotive company Tesla. So, some may question whether Musk truly feels wronged or just wants to stick it to his former colleagues.