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OpenAI’s Strategic Chaos: How Recent Moves Signal a New Era for AI-Driven Businesses
The past week at OpenAI has been described internally as a “chaotic roller coaster,” packed with pivots that are set to reshape the AI landscape for business leaders. In just seven days, OpenAI made more impactful decisions than most technology companies achieve in a year, with direct implications for enterprise consumers, technology partners, and the broader competitive environment.
This article breaks down the episode’s insights, giving business owners and decision makers clear, actionable perspectives on the seismic changes underway at OpenAI.
AI Product Strategy: Killing Side Projects to Sharpen Core Business Value
OpenAI shut down its standalone Sora app after six months, citing excessive compute demands and limited real-world impact. Sora had launched with ambitions—the platform even garnered a billion-dollar Disney licensing agreement, but no funds ever exchanged hands. The move to scrap Sora was based on founder promises that if it failed to meaningfully improve lives within six months, OpenAI would adjust course. The company responded decisively, not only shuttering Sora but eliminating supplementary deals and features tied to it.
This episode reveals that OpenAI is methodically abandoning “side quests”—including the failed instant checkout shopping feature (with major partners like Walmart, Shopify, and Etsy withdrawing support after seeing substantially lower conversion rates inside ChatGPT). The company is now pivoting from checkout integration to visual product discovery and routing, marking a fundamental change from owning the transaction to facilitating discovery and comparison.
For business leaders, this signals a deliberate refocus: expect fewer splashy, viral consumer tools and more depth in enterprise and knowledge work applications, as OpenAI zeroes in on sectors with higher marginal value and less resource strain.
AI Market Positioning: Preparing for a $1 Trillion IPO and Enterprise Focus
OpenAI’s actions are best understood as pre-IPO maneuvering. Data shows the firm is raising substantial capital—a recent $10 billion round pushed its valuation to $850 billion—and doubling its workforce, targeting 8,000 employees by year-end despite earlier signals of slowed hiring. This positions OpenAI as the potentially eleventh largest US company by market cap, and the most valuable private tech firm currently.
Strategic office moves—such as a half-million square foot campus “in Google’s backyard”—suggest intent to deepen access to talent and resources. Key hires from Meta to lead ChatGPT ads further reinforce a pivot toward monetizing massive user bases. With about 900 million weekly active users and minimum ad buy-ins set at $200,000, OpenAI is laying the groundwork for robust advertising revenue.
Finance executives at OpenAI have articulated a need for lean operations heading into public markets, trimming away projects that don’t align with profitability, compute efficiency, or enterprise lock-in.
Competitive Dynamics: Anthropic, Claude, and the Changing AI Race
In contrast to prior years dominated by model innovation alone, this week’s developments indicate that infrastructure, tool harnessing, and sector-specific functionality are rising in prominence. Rival Anthropic and its Claude platform have briefly seized momentum in 2026, especially with advanced coding and agentic workflows. However, OpenAI isn’t losing; rather, there’s a strategic recalibration mirroring Anthropic’s approach, now prioritizing depth over breadth.
The competitive stakes are high, particularly given OpenAI’s role underpinning enterprise workflows through integrations like Microsoft 365 Copilot. With Microsoft reportedly inserting Claude into its productivity suite, OpenAI’s models face direct challenges in the tools business leaders rely on daily.
AI Infrastructure: Compute, Capital, and the Future of Enterprise AI
Infrastructure bottlenecks were front and center this week. OpenAI’s need to allocate compute more efficiently led to the shutdown of Sora and the reconsideration of major data center expansions. Notable events included dropped Texas data center deals with Oracle, Microsoft stepping in, and a possible fusion energy agreement tied to executive board movements.
This signals clear business value for decision makers: as AI services become more compute-intensive and costly, the companies that control electricity, chips, and data centers—while maintaining capital flexibility—will be best positioned to enjoy sustainable growth and enterprise adoption.
Platform Consolidation: The Launch of an AI Super App
Reports confirm OpenAI is merging ChatGPT, Codex, and Atlas Browser into a unified desktop “super app.” This consolidation responds directly to user confusion and competitive pressures, as Anthropic’s single-app desktop platform gained traction. Centralizing chat, coding, and browsing, OpenAI will create deeper, more integrated workflows—facilitating enterprise lock-in and richer data for advertising and monetization.
New features, such as the library for cross-tool file management, set the stage for this super app to serve as a future hub for knowledge work, coding, and discovery.
The New Playbook for AI Platform Wars
OpenAI’s new strategy is clear:
Eliminate peripheral consumer tools and side projects.
Consolidate into a single super app optimized for enterprise, knowledge work, and high-value sectors.
Aggressively raise capital and expand headcount to prepare for IPO.
Build out infrastructure and ad capability to monetize both free and paid users.
Secure enterprise customers and lock in critical partnerships.
Platform wars are entering the enterprise phase, meaning businesses must think carefully about their AI ecosystem choices, as the integration and lock-in will affect workflows and productivity at scale.
Conclusion: Why This Chaotic Week Matters for AI-Driven Businesses
OpenAI’s rapid pivot—sharpening product focus, killing underperforming initiatives, and doubling down on enterprise infrastructure—gives business leaders a preview of how AI platform strategies are maturing. Expect more capable, focused tools, deeper integration with knowledge and productivity workflows, and expanding commercial features and advertising in mainstream platforms.
Rather than signaling weakness, strategic retreat from viral but compute-heavy experiments positions OpenAI for sustained dominance in enterprise AI. The implications for business owners are clear: anticipate faster consolidation, greater monetization of free users, and heightened competition in enterprise feature sets. Now is the moment to evaluate AI ecosystem alignment, as platform choices will shape efficiency, security, and long-term competitiveness.
Topics Covered in This Episode:
- OpenAI Sora Shutdown Six Months Post-Launch
- Disney $1 Billion Licensing Deal Canceled
- ChatGPT Shopping Feature Retired, Pivot to Discovery
- OpenAI Workforce Doubling, Hiring Meta Execs
- ChatGPT Codex and Atlas Merged Into Super App
- OpenAI Raises $10 Billion, Prepares for IPO
- Microsoft-Amazon Cloud Deal Sparks Legal Threats
- New OpenAI Model "Spud" Announced
- OpenAI Enterprise Strategy: Focused Product Line
- Anthropic Claude Popularity and Market Impact
Episode Transcript
Jordan Wilson [00:00:15]:
The past week has been a chaotic roller coaster ride for OpenAI. And if you've been following, you may have gotten whiplash. So the company with plans to go public has grabbed just about every headline, good and bad over the past seven days. And as a former journalist and someone that's been covering AI daily for three years, this was not a normal week for OpenAI or any big tech company, really. I mean, the amount of moves they're making is head spinning, and I see this as the chaos before the calm, before the storm. And the main headline that most people will be talking about this week is that OpenAI killed its once viral AI video platform, Sora, or maybe that their biggest investor in Microsoft may reportedly sue them for a deal they did with Amazon, or maybe that the Chad GPT in app shopping experience failed and didn't go as planned. So doubters will see those things, and the OpenAI naysayers will say that these are the latest signs that OpenAI is bound to fail. Personally, I see it a different way.
Jordan Wilson [00:01:27]:
I see a company that threw the proverbial spaghetti at the wall throughout 2025 to see what stuck in is finally clearing all that mass and is honing its focus in on its core products as it prepares to potentially go public at a more than $1,000,000,000,000 valuation. So whatever your viewpoint is on OpenAI, this week alone had, like, a year's worth of developments. And even if you're a casual chat GBT user or novice in the AI space, you absolutely need to understand the past week of developments at OpenAI because it will undoubtedly be talked about in a decade as a moment that started to either make or break the company. Alright. We're gonna be getting into it on today's episode of everyday AI. But before we tell you about that, here's the big picture. Ready? Here's what's going on. OpenAI made more moves in seven days than most companies make in a year.
Jordan Wilson [00:02:22]:
But essentially, they're just killing what isn't working, and they're going in all in on Chad GPT in its new super app platform. And like I said, this week, I think it's gonna be remembered as the make or break point when we look back in three, five, ten years on where OpenAI is or maybe isn't as a company. And I think you will be able to wind back in time and look at this week and OpenAI's response to this specific week as that moment in time. So on today's show, we're gonna be talking about what OpenAI's retreats and pivots reveal about where the entire AI industry is actually headed, why I think OpenAI squashing side projects like Sora and shopping isn't a weakness. It's actually a strength and why OpenAI's chaotic week is actually a very calculated strategy to prepare for a potential trillion dollar IPO. Alright. If you're new here, welcome to Everyday AI. My name is Jordan, and, well, we do this every day.
Jordan Wilson [00:03:24]:
Everyday AI, it's for you. It's your daily livestream podcast, free daily newsletter, helping everyday business leaders like you and me keep up with the roller coaster of AI. I tell you what's important, what's not. You take that information and be the smartest person in AI at your company to grow that company and your career. So this thing's unedited, unscripted, just coming with the, the the real takes for you here. But if you want all the AI news for today, aside from what we're going over, make sure to check out our newsletter at youreverydayai.com. So here's the most recent big headline as we jump into it, because, this is what I think most people are gonna be talking about, for well, at least a week or so and maybe longer. And it's that Sora is dead.
Jordan Wilson [00:04:14]:
So OpenAI just announced that the standalone Sora app is shutting down, and this happened just six months after launch. So, reports say it's consuming too much compute, and I absolutely agree with that. So as of, like, two weeks ago, we saw reports that the plan was to fold Sora ultimately into chat g p t. And we actually saw some coded leaks, that showed that they were, working on this. But, you know, two weeks after that, this thing is killed entirely. And it's not just the Sora app. Right? It was also everything that it had along with it. You know, importantly, that billion dollar, Disney deal.
Jordan Wilson [00:04:57]:
Right? There was a certain, licensing agreement that OpenAI and Disney worked out for, you know, users to use Disney characters. And and as part of that, Disney provided a $1,000,000,000 capital infusion. So, yeah, that's gone now, but reportedly, no money ever changed hands. But what's important to remember here is what Sam Altman said when Sora was first released. He essentially said that if Sora didn't improve people's lives in six months, that they'd readjust. And here we are less than six months later, and, well, it's gone. And I'll say what, I said then now if you didn't hear, after Sora came out. I very much called it brain rot.
Jordan Wilson [00:05:46]:
Right? I think a lot of people, for whatever reason, accuse me of being an open AI, you know, shilling for them. That's not my thing. They've never paid me a dollar. Well, their competitors have, which is interesting. No. I I I say that because I think that OpenAI, top to bottom, is the best and the easiest AI platform. If you're trying to bring your day to day, you know, knowledge work into an AI operating system, I think JWG is still the one, best platform for that top to bottom for most enterprises. But doesn't mean I blindly think that everything they do is amazing when it came out even though it was viral.
Jordan Wilson [00:06:25]:
And I said, yeah. There's some good use cases, and you can get some utility out of this, especially if you're in charge of creative at your company. But I said for the most part, Sora is brain rot. Yeah. It's cool. It's fun. You know? But you had to sign up for a specific app to use it, and the app was essentially just AI videos on repeat. I'll say the same thing about Meta's new vibes platform.
Jordan Wilson [00:06:46]:
It's it's brain rot. Right? I'm not someone that is scrolling, you know, social media shorts, reels, TikToks. Right? That's that's not me. I think that's, you know, it's my opinion. Right? But I don't think that really helps anyone. So, actually, gotta tip the cap here to Sam Altman for following through. Right? Reportedly, there's other reasons that it maybe just wasn't bringing in enough money, and OpenAI needed to essentially, reallocate the massive compute that they needed to keep up with the Sora demand even though it wasn't as viral as it was. I think that there was still a lot of, you know, heavy power users that were eating up a lot of, compute.
Jordan Wilson [00:07:26]:
And instead, you know, OpenAI has said that they're gonna kind of reallocate that to other, areas of the business. But I think people are gonna look at this as well. Nope. Sora failed. Right? It didn't bring in enough money. I don't think that. But Sora going down is just the latest in a absolutely wild week for OpenAI. Ready? I'm gonna read you the timeline of the last, couple of days, the last week or so here.
Jordan Wilson [00:07:53]:
This is a week. Right? Not, a year, not a quarter, not a month. This is the week. Alright. So March 18, we saw reports that OpenAI's biggest investor, Microsoft, is considering suing the company over its cloud deal with Amazon. March 19, we finally got reports that OpenAI was going to merge chat g p t codecs in their browser atlas into a single desktop super app. That's some market moving news. Then the next day on March 20, we got these, story that OpenAI was abandoning their instant checkout shopping feature.
Jordan Wilson [00:08:31]:
So, you know, the headline said that it failed and that they were, instead pivoting to visual product discovery. Then on March 21, yeah. So that was, yeah. On the weekend, we saw a story that said that OpenAI was planning to double their workforce. That does not happen. Right? So I think right now their headcount was roughly 4,500, and reports say that they're going to try to hit 8,000 by the end of the year, so nearly doubling their workforce. Even though in January, they said that they were going to slow down hiring. Then also over the weekend, we saw OpenAI hiring a meta exec to lead their advertising push.
Jordan Wilson [00:09:14]:
They launched a library feature, a small thing, but I think it actually has larger implications than we think. Then also over the weekend, we saw some pre IPO. Right? So, yeah, OpenAI reportedly preparing for its initial public offering this year. So we saw some, pre IPO docs flag Microsoft reportedly as a major risk for OpenAI. We also saw the potential Helion Fusion energy deal mounting with Sam Altman, stepping down from the Helion board, and then the Mountain View campus lease. My gosh. They a nearly half million square foot building that they are now planting in Google's backyard. Right? And then, oh, Sora killed.
Jordan Wilson [00:09:59]:
Oh, and not only that, you know, earlier this week on Tuesday that we got the news that Sora was killed and Disney walking away from the 1,000,000,000 other deal, but also that they raised another $10,000,000,000 as part of a $120,000,000,000 round and that they have their newest model. That's a completely new pretrained model, so not a, you know, a slightly step up from a 5.4. They have a whole new model that's been, pretrained from scratch, ready to go, and they just had a $1,000,000,000 nonprofit pledge. This is all in seven days. Right. It's been an absolutely chaotic week for open AI. So let's dig in a little bit more. And I think this kind of goes into a couple of phases, right? Because ultimately, I think they're number one, sharpening the core.
Jordan Wilson [00:10:56]:
Number two, they're shedding the side quests. And number three, they're fueling the AI engine with capital. Four, they're running into some infrastructure problems. And five, I think all of this ultimately sets up for the the new playbook. So the the the shedding of the side quests was a lot more than just Sora. So we also said that the instant checkout that OpenAI was demoing, inside of ChatGPT, well, it wasn't really going well. And it seems like some of their biggest partners, like Walmart, Shopify, and Etsy, all pulled away. And, reportedly, Walmart had a three times lower conversion rate inside of Chechi BT than on Walmart's own website.
Jordan Wilson [00:11:38]:
So instead, OpenAI is now pivoting from kind of owning the checkout to instead owning the discovery. So one thing that they're gonna be pushing more instead of, you know, bringing all this different, you know, merchant checkout inside of the Chad GPT, you know, new super app, whatever that may be, or in current days, Chad GPT app. Instead, bringing in a more, owning the discovery. So comparisons, reviews, and then routing them to the retailer. And those aren't the only side quests that died. Right? That's just what died this week. Right? But before this week, we saw reports that their, highly anticipated adult mode was delayed. Their AI hardware, was delayed, you know, maybe until 2027.
Jordan Wilson [00:12:22]:
The Stargate extension was canceled. And then you have other, you know, big splashy features from 2025. Right? All the spaghetti that got thrown on the wall, these lot of things just haven't been touched. Right? Advanced voice mode, barely touched or updated. Agent mode, made a huge splash, barely touched or updated. So it does seem like this combination of OpenAI sharpening the core in shedding side quests just to really focus on what matters. But that's not what the narrative is saying. Right? There's been this recent I think the the the the rest of the world is finally start a very small sliver.
Jordan Wilson [00:13:02]:
Right, is starting to, like, understand who anthropic is. Right? If you listen to this podcast all the time, you obviously know who Anthropic is. But I think the rest of the world is like, oh, what's this Claude thing? Right? It's it's funny. I actually got a group text, you you know, from a a friend group. Right? Someone had just discovered Claude for the first time. But that's that's the reality. Right? Outside of our, you know, AI bubble that many of us live in, most people have never heard of Anthropic. They don't know what Claude is.
Jordan Wilson [00:13:30]:
So I think that there's been this recent, you know, kind of surge where the rest of the, you know, non AI bubble world is figuring out about Claude. And so you have that, coincidentally coinciding with OpenAI's most chaotic week ever. So this, you know, narrative that's bubbling to the surface is, well, oh, OpenAI is gonna fail. They're gonna go bankrupt. It's all anthropic. It's Claude. No. That's absolute nonsense.
Jordan Wilson [00:13:58]:
Right? Full disclosure. I love Claude. I hate their limits. Their limits stink. I have a completely different business plan than OpenAI. A lot of their features aren't as good, but I pay 200 a month for Claude Max just like I pay $200 a month for Chargebee T Pro. Right? It's a great product, but they're not losing to Anthropic. That's just an a narrative that I think is, you know, popular to post about on social media, because Claude, has well, they've been winning 2026 so far.
Jordan Wilson [00:14:33]:
Right? I think hands down, Google won 2025. OpenAI won 2023, 2024. And so far, at least, it's very early. Anthropic may be winning 2026. But this doesn't mean that OpenAI is going bankrupt. And, yes, we know they're burning money, but guess what? We've talked about this on the show before. Some of the most profitable companies in the history of the American enterprise burn billions of dollars, tens of billions of dollars before ever becoming profitable. Right? And we've seen reports that OpenAI may not be profitable until 2030.
Jordan Wilson [00:15:09]:
I'm actually, would say maybe before that. I am even though the first round of advertising in Chat GPT didn't work as well as they thought, I think with OpenAI's recent hire, which we're gonna talk about here in a couple of minutes, Yeah. I think OpenAI is gonna be literally printing money with their ads business. Anyways, I actually think that killing all of these side projects, people only see the failure. I see that as a strength because essentially, what we're seeing in 2026 with Anthropic winning the year, They're not winning the race, not even close, but they're winning the year. I think that's because, well, Anthropic from the beginning said we don't care about users, the total number of users. We wanna own a domain. We wanna own coding.
Jordan Wilson [00:15:58]:
Because once you can own coding, you can start to own agentic workflows. You can own the harness. And then as coding becomes better and recursive perhaps, you know, then you can start to own different sectors of knowledge work. And I think that's where we see with anthropic right now. And maybe this might be the first time, maybe. Again, this could be coincidental, the timing of OpenAI preparing for an I, for for an IPO with anthropics, you know, kind of dominance in certain sectors. Right? High value knowledge work, legal, finance, etcetera. Right? But it seems now like OpenAI is taking a play, taking a page out of the anthropic playbook and saying, okay.
Jordan Wilson [00:16:39]:
Well, now we need to narrow our focus and start, you know, really doubling down in the areas that matter. You you know, Sora didn't stick, shopping didn't stick, so they scraped it off the wall and moved on. And that's a good thing. So what's it mean for you? Well, expect in the future, right, when we see a the the the new super app, you know, any any week, any month now. I think what we will see is more product updates, and I think we will see fewer, kind of distractions, so to speak, out of OpenAI. And I think we will see, at least for the 2026, a likely more focused product line, focus on the enterprise, focus on knowledge work, and focus on those high value sectors. So more depth, I think, to the tools that you actually use. And you can tell that's coming because the money hasn't stopped.
Jordan Wilson [00:17:43]:
Investors, for the most part, the big ones, writing the billion dollar checks, they're not dumb. Right? You you know, OpenAI just this week raised another $10,000,000,000 in their total latest round, now exceeds a $120,000,000,000 with a post money valuation of $850,000,000,000 as they prepare for their IPO. And let me just say this. Right? If you don't follow, things like I follow, right, so if you look at market caps of companies in The US right now with that post money valuation of $850,000,000,000, OpenAI would be the, eleventh largest company in The US by market cap. Right? They're, technically their post money valuation would be their market cap today. If they were a public company, they're a private company, but they're the most valuable private company out right now. And they will be by the time they IPO, especially if it hits the trillion dollars, they'll be either the ninth or the tenth biggest company in America by market cap. Right? Yes.
Jordan Wilson [00:18:48]:
They're not gonna make money for a couple of years, and that's very normal for a company like this. And I think that you just have to follow the money even through all this, even through the through all the reports, you know, oh, OpenAI is shutting down. They're going bankrupt. Guess what? They're still cashing $100,000,000,000 rounds, and I don't think that's gonna change. And their CFO, Sarah Friar, did recently just say this. She said, I need to make sure the company is healthy and ready to face the public markets. Kind of alluding to all of these kind of side quests, that are, you know, now dying or dead or dormant. And instead the core business is growing and improving.
Jordan Wilson [00:19:38]:
And a big part of that core business will be the new super app that we saw reports of earlier this week. So number one, I'm glad this is happening. Right? I've been shouting on this very, you know, podcast that I do know some OpenAI people, listen to, and I have reached out to them and said, like, hey. And I know I'm not the only one. Right? But I've been like, what Anthropic is doing with their desktop app is great in the Mac. Right? It's one app. It has Claude chat, Claude cowork, Claude code. Very easy, very simple.
Jordan Wilson [00:20:15]:
Right? Where right now, ChatGPT has a ChatGPT desktop app. They have a codex, and they have an Atlas browser. Right? I'm staring at three different, you you you know, icons on my dock right now. It's confusing. And what I still don't think people understand about codex as an example, right, as, Claude Code and Claude Cowork, you know, take off in a very viral way. Codex can do up until, Claude this past week, just kind of introduced the complete, computer use where, Claude can control your entire computer, which is cool to use. I love it. Eats through credits, you you know, or sorry, eats through tokens really quickly.
Jordan Wilson [00:21:01]:
But until that, you could do almost everything in codex that you could do in cowork or cloud code. And I don't think people realize that. And I think maybe that's a reason, why OpenAI is going away from this strategy of having the three different apps and bringing it all into one roof because codex is a freaking monster for knowledge work. Yeah. It's great for coding. I I I love you know, I kind of go back and forth, between Claude Code and, and codex, and I always use both on any project and sometimes anti gravity as well from Google. But codex for knowledge work is absolutely amazing. So the super app concept, is essentially they're bringing Chad GPT, codex, and Atlas, their browser all in one.
Jordan Wilson [00:21:48]:
And I think, you know, what this is setting up for is just straight dollar dollar bills y'all. Because when you bring all of that context, right, in this new library feature, right, it says a little feature that they introduced, and I saw that. And I'm like, this is actually big. Right? It's essentially a central location for any file that you've ever uploaded. But think of that across browser, across codex, and across chat g b t. So I think, you know, chat g b t and or sorry, OpenAI is starting to lay the foundations for the future of this super app. But I think, ultimately, what that leads to is the ability for them to make more money sooner and faster because, well, they'll be able to sell a lot of ads when they have all of that information on people. So aside, getting back to the money, right, and what their, CFO, Sarah Friar, said about essentially having to be lean before they go public.
Jordan Wilson [00:22:43]:
OpenAI, we've also saw reports this week that they're offering, private equity firms guaranteed 17 and a half, percentage point returns to deploy AI across their portfolio companies. So they're essentially trying to buy, PE lock in before they even go public. So that's what I say. I think this is the chaos before the calm, before the storm. Here's what I mean by this. It's been one of the most chaotic weeks ever for OpenAI or any tech company, probably, in recent memory since I've been doing this, at least with the number of just the sheer quantity of head turning moves, multiple a day that you're like, what the heck is going on? Right. That's the chaos. And I think that the brass at open AI want the calm.
Jordan Wilson [00:23:34]:
They need to get to the calm before the storm, which is the IPO, right? Because before any company goes IPO, that's when all the dirt comes out, that's when everyone comes out with their, you know, campaigns against them. So, you know, companies know it gets messy right before you, go public. It's a huge deal about, you know, what that IPO hits at in the initial reception. So they wanna have as much control on the company and its direction as possible from a comms perspective, from an identity, a a brand image, everything. They want that all under wraps. So this is the chaos. They wanna get to the calm, and then there will be the actual storm of going public. So to get there though, they have to deliver, you know, we don't know if they're going to go public in the second half, you know, third quarter.
Jordan Wilson [00:24:27]:
That's what I'm seeing from a lot of reporting, but they may not even have the compute that they need even after they shut down compute heavy projects like Sora. So, you know, Sam Altman did step down from the Helion Energy board this way to clear way to clear the way for OpenAI to potentially enter into a massive fusion power deal. And, well, maybe that's tied to the other piece of recent news that OpenAI and Oracle dropped a massive Texas data center extension, and Microsoft stepped in to rent it instead. So it is interesting that Microsoft had plans. Right? This is concept of, well, they need more and more compute, and then they have this, Stargate extension lined up for more compute, and they had to, well, say no to that extension, and then Microsoft came in. So a lot of people are saying, well, if they couldn't complete that, why? And maybe this fusion power deal has something to do with it, or maybe it's just about the, you know, access to capital in what waves. Right? Obviously, you know, with the different hardware plays. Right? We've seen OpenAI is potentially entering, entering into some custom silicon deals, you know, consumer hardware, a lot of different things they still have going on even after killing some of these side quests.
Jordan Wilson [00:25:44]:
But I think here's what this means for the larger AI race. The best model doesn't really matter as much anymore. Right? We talked about this on our start here series a couple of weeks ago. I think the harness and the tool use matters more, at least, versus just an actual next best model. Right? We saw reports on this new model code named spud that OpenAI is working on, but it's now about who has the compute. Right? Who is the electricity? Who is the chips? Who is the data centers to run it? And I think that's what we are starting to see here because a lot of the moves that OpenAI is making seemingly is to reduce the compute that they're spending on consumers and on projects that are maybe not in their long term vision to profitability or in their long term vision to an IPO. So it seems like if it's not something that's going to immediately make them, you know, riches in the niches of the enterprise, or something that's gonna set them up for an IPO, they're cutting it off, especially if it's compute heavy because they need to allocate those resources for other reasons. And then, yeah, the whole Microsoft problem.
Jordan Wilson [00:27:00]:
Can't ignore that. Right? That's another, kind of big check mark that OpenAI hopes to check off, in the chaos before the call and before the storm. So Microsoft is reportedly considering suing OpenAI over the $50,000,000,000 Amazon cloud deal that OpenAI and Amazon entered into, and Microsoft is saying that it violates their Azure, Azure exclusivity. So essentially OpenAI and Amazon reportedly built a technical workaround, to the Microsoft and OpenAI deal. And Microsoft says it kind of violates the spirit of the contract. Meanwhile, OpenAI's own pre IPO investor docs name Microsoft as a potential business risk. So, yeah, the partner that built open AI up is now maybe the partner that could potentially hold them back a little bit as they start to, you know, kind of, lean in, get leaner, and lean in, to longer term profitability. So that one is going to be, a relationship that is especially important to watch and not just for, you know, us, Us AI dorks to have something to talk about at the water cooler or the next conference.
Jordan Wilson [00:28:14]:
That's not what I'm talking about. This is going to impact how you work because you probably don't know this, but even if you, the majority of people out there are using Microsoft three sixty five copilot, right? You don't know it, but there's open AI models have historically run copilot top to bottom Over the past couple of quarters, Microsoft, especially inside of their apps inside of their three sixty five apps, like word, PowerPoint, Excel, etcetera, have started to put in Claude. So the very models that are powering your day to day work might get swapped out. We don't know. This could potentially lead to a major rift between open AI and Microsoft. So here is the new playbook for OpenAI as we close-up this episode. Kill the side quests, consolidate into one super app that's Chad GPT codex and Atlas, and then raise the money, lock in the enterprise, monetize the audience, secure the infrastructure, and prepare for IPO. It's a very simple playbook.
Jordan Wilson [00:29:26]:
And I think the other big thing that's gonna be happening in the interim, right, aside from killing all the side quests, getting the super app, you know, going after high value sectors is their recent hire. So Dave Duggan was hired from Meta to run chat gbt ads. So right now, OpenAI has 900,000,000 weekly active users, And their first kind of ad foray for their first advertisers in their better in in their beta round had to come in with a 200 k minimum ad buy. And some of the early, story so far said that they're, well, maybe wasn't as good as they thought. Right? There wasn't exactly a lot of reporting, a lot of attribution. They have advertisers spending a minimum 200 k might usually want. That's something to keep an eye on because I think OpenAI has had a couple of recent key hires from Meta, specifically to work on the ad side of the company. So as they rotate, and migrate into the super app, Yes.
Jordan Wilson [00:30:29]:
It is to make it easier for consumers, but it's to right? 90% of people are on the free plan. So that's, I don't know. I'm not great at math, but that's more than 800,000,000 free users that if they're using this super app, I know not all of them are gonna use it because, you know, a lot of people are just gonna use the web. But still, just the amount of advertising, having all of that information in there. Right? You've shared keywords with Google. You share your deepest, darkest, darkest secrets with chat GPTs and chatbots of the worlds. Right? So not only that, but two other key factors here, looking at OpenAI's new playbook, but the doubling headcount by the end of the year. Wild.
Jordan Wilson [00:31:18]:
And then literally planting a five a nearly 500,000 square foot new office in Google's backyard. Why would you do that? Well, so you can more easily, you know, the closer you are to the, to your enemy, the more fun you can have. So that'll be a another storyline to continue to watch, but more of the story here, open AI is not going away, right? Even with their crazy chaotic week shutting down Sora, some of their other side projects dying, all they're doing, they're getting leaner, more focused, not weaker. They're getting stronger. And yeah, it's the chaos, but I can't wait after the calm to see the storm. Alright. And here's why this matters for you. Well, if you use Chat GPT, expect a more focused, more capable product, but also expect ads if you are on a free or the ChatGPT paid go plan and probably more commercial features.
Jordan Wilson [00:32:24]:
Right? So even if you are on a paid plan in the same way that anthropic, you know, allows you to buy credits, that's something that ChatGPT has on their business plans. I might expect that to come down to the normal consumer plans as well. If you're a business leader, the platform wars just enterprise, just entered the enterprise lock in phase. You know? So you do have to think about picking your AI ecosystem now. And if you are an AI skeptic, strategic retreat is not collapsed. What OpenAI is doing right now is doesn't mean they're my gosh. There's actually smart people out there that are like, oh, you know, Sora's dead. This is the latest sign.
Jordan Wilson [00:33:03]:
OpenAI is going bankrupt. I called it first. Right? No. It's not how business works. Right? This is a company that by today's measures is technically the, eleventh most value. Right? Once they close out this this funding round, their post money valuation would put them at the eleventh most valuable company in The US by market cap. Those companies don't just get that valuation or that market cap, by sheer luck. No.
Jordan Wilson [00:33:33]:
They do it because they have a tremendous business model that is, a generation, generational company. And the new model, Don't forget about that. Brand new, codenamed, spud. It is ready. And, apparently, it is going to, really impact the economy, right, according to, the brass there at OpenAI. So the money is raised. The workforce is expanding. Now they have to ship, and we just get to watch and, well, maybe enjoy more chaos.
Jordan Wilson [00:34:04]:
Alright. That's it for today's show. Taking a look and a quickish recap on one of the wildest weeks I've ever seen for a single AI company since I've been doing this for daily for three years. So like I said, even if you're not an avid chat GBT user, even if you're just a novice, whatever happens as the result of this week, I think, has long standing impacts across not just the AI industry, but the tech sector as a whole. So, if you learn anything, if this was helpful, right, our team puts a lot of effort into keeping you up to date, trying to give you, maybe sometimes I put my opinion in there, but I try to keep this unbiased and just give you the facts, some of my opinion, and let you decide. So if that's helpful, if you're listening on the podcast, please click that subscribe button and follow the Everyday AI Show whether you're listening on Spotify or Apple Podcasts. Then if you're on the live stream, repost this. Tell tell someone who needs to know this what's going on.
Jordan Wilson [00:35:04]:
You can be the smartest person in AI at your company when you go to our website, youreverydayai.com. Go sign up for the free daily newsletter. Thanks for tuning in. We'll see you back tomorrow and every day for more everyday AI. Thanks, y'all.