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It all began with OpenAI’s CEO of applications Fidji Simo announced to a group of baffled employees on Monday night that the company has to drop putting its hand in every AI pie that appears and refocus on business customers while cutting down on side quests that “are fast becoming a distraction.” In other words, they want to become Anthropic.
Can’t say we disagree with the thought behind her actions. Over the past 12-odd months, OpenAI revealed Sora, which was a text-to-vide generator that sank before it could swim. Then came Atlas, their web browser that was slower than anything ever we had used. Then came the top-secret hardware announcement in the wake of hiring a former Apple executive.
And finally, there was the $200 million contract with the US Department of War, where they replaced Anthropic.
As we said in an earlier article published a couple of days back, if you aren’t confused around the AI world, you aren’t trying hard enough.
If you thought taking over from Anthropic at the Pentagon was OpenAI’s masterstroke, think again. Now OpenAI has tied up with AWS to sell AI products to the US government for both classified and unclassified work. That AWS’ parent company Amazon is an early investor in Anthropic does not seem to matter to anyone at this juncture. The operative word is change enterprise AI.
“We cannot miss this moment because we are distracted by side quests,” she reportedly told staff at an all-hands meeting. “We really have to nail productivity in general and particularly productivity on the business front,” Simo reportedly told the OpenAI team. Some of these comments were carried by the Wall Street Journal.
Given what we’ve seen over the past 12 months, her latest comment could well be classified as the Understatement of the Year. Of course, Simo only told the world what many of us already knew, given that one of Sam Altman’s major announcements related to their plans of offering direct shopping off the ChatGPT app. We had reported its silent burial earlier this month.
The bigger problem with OpenAI is its reputation as a PR-assisted windbag that floats up from time to time when aided by gusts of wind. We still don’t know how much of Fidji Simo’s comments can be taken at face value. Will they or won’t they continue with their hardware narrative? Sam Altman’s post on X said nothing and we aren’t surprised anymore and refuse to be confused as well.
Which brings us to the moot question of how much of their chaotic management approach would matter to investors as they ready for the much-touted IPO sometime later this year?
Altman’s friends would argue that OpenAI isn’t half as chaotic as the company run by his former friend and mentor Elon Musk, who has been on steroids tweaking his company ownerships as they prepare for their own IPO and possibly a paid trip to the moon to set up orbital datacentres.
At this point, we would love to segway into the Musk mechanisations over the past few months, but realise (rather sadly) that it isn’t connected with what we are reporting right now, which is about Sam Altman and team now feeling the pressure from investors who may have just started asking the obvious question – “Stop telling us what. Instead tell us by when”.
Like Ed Zitron, the man who blew the lid off OpenAI’s finances some months ago, says in his latest newsletter: “AI boosters are no longer allowed to explain what’s good about AI using the future tense. You can no longer say “it will,” “could,” “might,” “likely,” “possible,” “estimated,” “promise,” or any other term that reviews today’s capabilities in the language of the future.”
What is becoming more evident is that the ChatGPT maker is now chasing Anthropic’s revenue model and wants to establish itself as a name to reckon with in the fast-growing enterprise AI market. Though there were no statements from OpenAI, we are sure that the billion-dollar stock selloff caused by Claude Code and AI assistant Claude Cowork did reverberate in their offices.
All this while, what we got from OpenAI was a lot of confetti in the room that looked good but did little to advance their business or revenue models (that is if they had one in the first place). In fact, the Wall Street Journal once again published stories based on quotes from current and former employees that confirmed this lack of focus right through 2025.
With competition growing and compute power and inference capacity at a never-before premium, OpenAI needs to pull up its socks right now.
The frenetic pace that these AI companies set for themselves seem to be biting them back. We saw what happened with Nvidia’s much-touted new chip design powered with Groq. Amazon had beaten them to it by tying up with Cerebras for AI inference. It is most likely that the latter will sell to Anthropic while OpenAI will go with Nvidia, which itself is facing a Google TPU challenge.
Does this mean we could have yet another “Code Red” within OpenAI? Sam Altman had hit the panic button last December, amidst Google’s growing threat to better chatbot answers using their two decades of search data and indexing. Then Altman had asked his team to improve the quality of their AI chatbot at the cost of delaying projects.
Now, one of his teammates is asking them to let go of side hustles and focus only on enterprise AI solutions. Looks like the “code red” was never completely switched off and kept flickering from time to time. As it is doing now in the words of Simo, ““We are very much acting as if it’s a code red. I don’t think necessarily declaring codes for everything makes a ton of sense.”
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