There’s pretty much always a frenzied news cycle of some kind around OpenAI.
The latest: Amazon reportedly is in talks to invest $10 billion or more in the ChatGPT maker, which already counts giants like Microsoft among its investors. Perhaps the most recent (and loudest) news cycle, however, had nothing directly to do with funding at all—social media lit up with reports that CEO Sam Altman had issued a “code red” to the OpenAI team, saying it was time to double down on improving ChatGPT (the LLM that started it all) or risk falling behind.
Fortune’s tech team recently dove into what’s going on behind the scenes, in a feature published this week and helmed by Jeremy Kahn, Alexei Oreskovic, and Lee Clifford. They wrote:
The internal call to arms lays bare the very precarious position this market leader is now in, particularly as it confronts industry titans like Google (as well as Microsoft and Meta), with tens of billions of dollars in cash on their balance sheets and massive ecosystems of products to boost their distribution.
For Altman, a longtime tech entrepreneur, the historic matchups of Silicon Valley’s past, pitting innovators and incumbents in winner-takes-all battles, are surely contributing to the sense of urgency: The annihilation of browser pioneer Netscape by Microsoft or the eclipse of BlackBerry’s handheld communications gadgets by Apple’s iPhone comes to mind. But there’s also the example set by Facebook founder Mark Zuckerberg, whose famous “lockdowns” over a decade ago helped repel the threat of Google’s nascent—and ultimately doomed—social networking product.
The decisions made by OpenAI and its competitors at this critical juncture in a fast-moving market will decide which company cements its hold on what some have called the most transformative technology since electricity, and which will end up as odd footnotes in the final writing of the history of AI.
Many Term Sheet readers know I love a good history lesson. (Did you know that venture capital has its roots in the financial structure of whaling ventures?) And lots of people like to say that AI marks an Industrial Revolution-esque change. If I’m honest, for all my skepticism, I do believe that.
So, that means history is being written right now. One “code red” here or there is incremental, but could make all the long-term difference. Read the whole story here.
Term Sheet Next… My colleague Lily Mae Lazarus just published this Term Sheet Next profile of Ari Malik, cofounder of Salient AI. He talks candidly about the company’s $25 million ARR—and how they’ve yet to lose a customer to churn. Read it here.
See you Monday,
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The post Inside OpenAI’s ‘code red’ appeared first on Fortune.
