Berber Jin

You have to remember that these businesses lose a lot of money.

It costs a lot to build next generation models and to also power chatbots like ChatGPT and Claude.

And there's going to be a limit to how much these companies can keep raising in the private market.

It's a typical Monday at OpenAI, and the company's employees get hit with this Slack message from Sam Altman, the CEO, where he declares a code red.

Kind of like a company-wide emergency, telling employees that they had been seeing this big problem kind of creep up and then kind of explode in recent weeks.

In many senses, it was a memo that you wouldn't expect from Sam Altman because Sam Altman, his leadership style is to dream big and to spin up products at a really rapid pace and ship them really fast and kind of look to the stars.

And this memo was the opposite.

It was like, we need to become more disciplined and we need to focus on making the basic features of ChatGPT better for users.

This is the first time in the company's history that it's faced such a big threat from one competitor, that competitor being Google.

Usage of their AI app called Gemini just skyrocketed.

I mean, they kind of dealt this blow to open AI in a way that they hadn't really before.

This is definitely a surprise to me because for the three years that I've been covering this company, their lead with ChatGPT has almost been a given.

If OpenAI can't figure out how to get over this bump, this blip, there's very high chance that OpenAI can't pay for those contracts or they just have trouble staying afloat financially.

But the one that changed everything for the company is, of course... ChatGPT, the most popular and fastest growing consumer app in internet history.

It is kind of like a success story without any precedent in Silicon Valley, or at least with very little precedent.

And their users grew from zero to over 800 million weekly users as of last month, which is an astonishing rate of growth.

And that story kind of powered its success within Silicon Valley.

The industry, people thought that for a long time that their lead was insurmountable.

And so it kind of turned OpenAI into this celebrity company in Silicon Valley that investors wanted to pour money into, big tech CEOs, you know, wanted to be associated with.

So in the spring of last year, OpenAI released a new model called 4.0, O standing for Omni, which means that the model can process not just text, but also audio and images.