Fewer consumer focused AI application endeavors. Especially ones like the two year old text to video, briefly viral, Sora App, with high AI Compute requirements relative to subscription and/or ad revenues coming in the door.
“The company is narrowing CEO Altman’s direct reports and winding down Sora.”
“OpenAI CEO Sam Altman has relinquished direct oversight of the company’s safety and security teams so he can focus on raising capital, supply chains and “building datacenters at unprecedented scale,” he told staff on Tuesday.”
And they’re certainly raising more capital, as CFO Sarah Friar just topped up an additional $10 billion from investors to bring current record fundraise pre-yearend IPO to “north of $120 billion”.
Back to Sam Altman’s fewer priorties:
“At the same time, he said the company had completed the initial development of its next major AI model, codenamed Spud, and would wind down the Sora AI video mobile app, which employees had complained was a drag on the company’s computing resources during a time of heightened competition with foes such as Anthropic and Google. The shutdown of Sora prompted Walt Disney Co. to abandon a planned $1 billion investment in OpenAI related to a Sora licensing agreement struck last December, according to a person familiar with the situation.”
“The arithmetic speaks for itself. Industry estimates put Sora’s compute costs at roughly $15 million per day, about $5 billion per year, for a consumer app that generated less than $500,000 a month in revenue. Across its entire lifetime, Sora earned about $2.1 million in in-app purchases, according to Appfigures. Polling told the rest of the story. About two in three Americans disapproved of AI-generated video. Nearly three-quarters said they would rather not watch fully synthetic creative content. The audience had already voted.”
“The math required no brilliance. It required a CFO.”
“The moves are the latest by the company, recently valued at $730 billion, to narrow its focus to boost its coding and services aimed at business customers. Inside OpenAI, shutting down Sora was widely viewed as a likely first step in the process of culling such side quests.”
“Altman didn’t specify what he meant by supply chains, but the company has been developing its own custom AI server chips and discussing deals for its own data centers and power sources, though it recently shifted focus to rent more cloud servers instead.”
And some additional re-assignments of responsibilities to other senior people at OpenAI:
“Altman moved the safety team under OpenAI’s research organization led by Chief Research Officer Mark Chen, and its security team will move to the “scaling” organization led by cofounder and president Greg Brockman.”
“Altman also said that the company would be renaming senior executive Fidji Simo’s product organization to “AGI Deployment,” a reference to artificial general intelligence, or AI that’s roughly on par with humans. Last week, the company told employees that it would create a desktop “superapp” by combining ChatGPT with its coding agent Codex and browser Atlas.”
“The changes come as the company competes with Anthropic for both customers and investor attention as both head toward expected blockbuster IPOs in the next year. Anthropic has been taking the business world by storm with its AI agents for coding and other white collar tasks, and Altman has publicly said OpenAI is racing to launch similar tools.”
And of course, the company’s next major iteration of its core GPT/ChatGPT LLM AIs:
“The success of its next model will help determine how well those tools perform. The company has finished pretraining “Spud,” Altman said in the memo. He told staff that the company expects to have a “very strong model” in “a few weeks” that the team believes “can really accelerate the economy.”
“He added: “Things are moving faster than many of us expected.”
“OpenAI’s plan to wind down its Sora mobile app and application programming interface will free up computational resources to run Spud, Altman told staff. It also shelved its original plan to ship video capabilities in ChatGPT. That’s a change from the company’s earlier plans to integrate its AI-generated video capabilities in ChatGPT.”
And the crack Sora team is being re-purposed towards AI World Models, an area I’ve highlighted as being important beyond core LLM AIs. Leading to robotics, self driving cars and more.
“Shortly after Altman’s announcement, Bill Peebles, OpenAI’s head of Sora, said in a Slack post, “Incredibly proud of what the small and extremely cracked Sora product team has accomplished; the app brought a lot of joy to the world, and it let us battle-harden Sora infrastructure by doing deployments at this scale.”
“He added that Sora research would now focus on “systems that deeply understand the world by learning to simulate arbitrary environments at high fidelity,” otherwise known as world models, and the “prize is automating the physical economy.” Altman similarly said in the memo that the Sora research team will “prioritize longer-term world simulation research especially as it pertains to robotics.”
The whole piece is worth a full read for additional detail and nuance.
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