Story of the month
This month, we take a look at the radical evolution that OpenAI is currently undergoing. As the creator of the ChatGPT language model, OpenAI sparked the general public’s interest in AI. It is now at the heart of one of the world’s largest ecosystems. What started out as a non-profit organization is now evolving into a classic company, even though its governance underwent a huge storm a year ago. This turbulence and evolution requires detailed explanation and perspective, as OpenAI is sure to be one of the major players shaping the future of Artificial Intelligence.
OPENAI: AN EVENTFUL HISTORY WORTHY OF A HOLLYWOOD MOVIE SCRIPT
When it was founded at the end of 2015, OpenAI was a non-profit organization dedicated to the research and development of Artificial Intelligence technologies, for the benefit of all humankind. Its founding partners included Amazon and Microsoft, as well as leading Silicon Valley figures such as Peter Thiel (founder of PayPal and Palantir, and investor of Facebook and LinkedIn in their start-up stage) and Elon Musk (who subsequently exited OpenAI in 2018, due to conflicts of interest and strategic disagreements). Unsurprisingly, these heavyweight backers enabled OpenAI to start with a very comfortable cash position, estimated at $1bn. Co-founder Sam Altman took over as CEO in 2019. The same year, OpenAI adopted a hybrid status (part of the group aiming to become a commercial company), a transition that enabled Microsoft to take a stake in return for a $1bn investment.
OpenAI came into the spotlight in November 2022, at the time of the public launch of ChatGPT. From that moment on, it became possible to interact with an AI without being a computer scientist, since the questions ChatGPT asks (and the answers this “large language model” provides) are in natural language. OpenAI, as the parent company behind ChatGPT, can therefore be seen as the trigger for the general AI frenzy, which can even be described as a hype. ChatGPT registered 1 million users in just 5 days. This is a real record: it took Instagram two and a half months and Netflix three and a half years respectively to reach this threshold. Today, ChatGPT boasts over 250 million weekly active users (a rapidly rising figure, compared to the 200 million reached just at the end of last August).
Despite this undeniable success, OpenAI experienced a serious governance crisis in November 2023. The Board of Directors abruptly ejected Sam Altman, before a general outcry, both internal (among employees) and external (Microsoft intervened), led within days to his reinstallation and a wide-ranging reorganization of the Board of Directors, in which Microsoft now participates, in return for an additional injection of funds to the tune of $7bn.
Today, OpenAI is going through another major phase: its transformation into a commercial for-profit company. To this end, according to media reports, the group is in the process of enlarging its capital base, bringing in new investors (e.g. Nvidia, Softbank) alongside existing investors (e.g. Microsoft). This is a key step, as it marks two new turning points for AI:
- A new level of maturity: The financially strong investors who participated in this financing round are likely to be primarily aiming to make a lot of money with AI;
- A new objective: with its new profit-making goal, OpenAI seems to be relegating its initial objective of benefiting the whole of humanity to the background. Ethical considerations aside, this could have consequences for the development priorities of OpenAI’s AI models and projects, against which its competitors will have to fight back. It is therefore the general direction in which AI is heading that is potentially under review.
