On the decline and fall OpenAI?

Is this the beginning of the decline and fall of OpenAI and their leader Sam Altman? I thought that recently, when I read how Apple was suing OpenAI for supposedly stealing its secrets.  And that’s not the only lawsuit against them: the New York Times and other media companies are also suing them for theft. (Elon Musk also sued OpenAI  but lost. A good run down on that lawsuit is here.)

Now I am thinking differently. I wanted to say the decline started with staff breaking away and forming Anthropic in 2021, though even that isn’t straightforward.  This loss of former staff has been mitigated by other things, like large investments from Microsoft. Those investments, the growing user base and the lack of scrutiny from the press gave the impression that all was well at the powerful company. (As recently as 2023 publications like the Times and the Wall St Journal were providing highly positive coverage about Sam Altman and his company and he and OpenAI were the darlings of the tech world.)

I am still inclined to think that competition from Anthropic which will lead to losses for OpenAI. It’s still difficult to tell, but observers like Motley Fool are saying Anthropic is pulling into the lead and a gap is opening. I believe that gap is only going to widen.

In addition to Anthropic, there is other competition coming from China and elsewhere. That increasing competition and the declining Microsoft support will also put a squeeze on OpenAI. (You can see from this piece, which notes that Microsoft is moving towards their own models, while others are looking to Chinese models for business use.)

Losses or not, perhaps OpenAI will not suffer a decline but a displacement from the top spot. Perhaps OpenAI can become profitable and grow despite having to share the AI marketplace with others. (It works for Apple: they own 1/5 of the smartphone market and they are doing fine).

Beside competition, another thing that could cause their decline is the leadership of Sam Altman. No one is providing positive coverage about him now, as you can see from this and this and this and this and more. Even if all that is true, it would not be the first time a terrible leader has lead a successful IT company. So perhaps OpenAI can succeed despite being lead by the current CEO.

I started writing this piece thinking: OpenAI is going to fall, and I wanted to put a marker in this blog to note that. By the end, I am undecided. I’ll put this here for now and revisit things in a year.

P.S. Thanks for reading this. I wrote this so I could learn what I thought. Even though I changed my mind in the writing, I still think it is worth putting down this marker for now.