The two artificial intelligence startups behind rival chatbots ChatGPT and Claude are bracing for an existential showdown this year as both need to prove they\u2026<\/b>
\nThe two artificial intelligence startups behind rival chatbots ChatGPT and Claude are bracing for an existential showdown this year as both need to prove they can grow a business that will make more money than they\u2019re losing.
The fiercest competition between the two AI developers, along with bigger companies like Google, is a race to win over corporate leaders looking to adopt AI tools to boost workplace productivity. The rivalry is also spilling into other realms, including the Super Bowl.
Anthropic is airing a pair of TV commercials during Sunday\u2019s game that ridicule OpenAI for the digital advertising it\u2019s beginning to place on free and cheaper versions of ChatGPT. While Anthropic has centered its revenue model on selling Claude to other businesses, OpenAI has opened the doors to ads as a way of making money from the hundreds of millions of consumers who get ChatGPT for free.
Anthropic\u2019s commercials humorously mock the dangers of manipulative chatbots \u2014 represented as real people speaking in a stilted and unnaturally effusive tone \u2014 that form a relationship with a user before trying to hawk a product. The commercials end with a written message \u2014 \u201cAds are coming to AI. But not to Claude.\u201d \u2014 followed by the opening beat and lyrics of the Dr. Dre song \u201cWhat\u2019s the Difference.\u201d
In a sign they struck a nerve, OpenAI CEO Sam Altman said in a social media post that he laughed at the \u201cfunny\u201d ads but blasted them as dishonest and threw shade at his competitor\u2019s smaller customer base.
\u201cAnthropic serves an expensive product to rich people,\u201d Altman wrote on X. He also boasted that more Texans \u201cuse ChatGPT for free\u201d than all the people in the United States who use Claude.
The rivalry has existed ever since a group of OpenAI leaders quit the AI research laboratory and formed Anthropic in 2021, promising a clearer focus on the safety of the better-than-human technology called artificial general intelligence that both San Francisco firms wanted to build. That was before OpenAI first released ChatGPT in late 2022, revealing the huge commercial potential of large language models that could help write emails, homework or computer code.
The competition ramped up this week as both companies launched product updates. OpenAI on Thursday launched a new platform called Frontier, designed to be a one-stop shop for businesses adopting a variety of AI tools that can work in tandem, particularly AI agents that work autonomously as \u201cAI co-workers\u201d on someone\u2019s behalf.
\u201cWe can be the partner of choice for AI transformation for enterprise. The sky is the limit in terms of revenue we can generate from a platform like that,\u201d Fidji Simo, OpenAI\u2019s CEO of applications, told reporters this week.
Anthropic earlier in the week said it was adding new functionality to its Cowork assistant to help automate legal research and drafting work.
\u201cBoth OpenAI and Anthropic are really trying to position themselves as a platform company,\u201d said Gartner analyst Arun Chandrasekaran. \u201cThe models are important, but the models aren\u2019t a means to an end.\u201d
The two startups aren\u2019t just competing with each other. They also face competition from Google, which is both a leading developer of a powerful AI model, Gemini, and has its own cloud computing infrastructure backed by revenue from its legacy digital advertising business. They also have complicated relationships with Amazon, which is Anthropic\u2019s primary cloud provider, and Microsoft, which holds a 27% stake in OpenAI.
The first choice for businesses looking to adopt AI agents is typically cloud computing \u201chyperscalers\u201d like Microsoft, Google and Amazon, which offer a package of services, while AI model providers like Anthropic and OpenAI \u201ctend to come in second place,\u201d said Nancy Gohring, a senior research director at IDC.
But there\u2019s an opening because none of the players are giving businesses what they want, which are stronger security and compliance assurances to enable the more widespread use of AI agents that can access corporate systems and data.
\u201cAdopting AI and agents is inherently somewhat risky,\u201d Gohring said.
There\u2019s also the AI division of Elon Musk\u2019s newly merged SpaceX and its chatbot, Grok, which is not yet a viable contender for business customers. Musk has long set his sights on challenging the market dominance of OpenAI, which he co-founded and is now suing in a court case set for trial in April.
SpaceX, OpenAI and Anthropic are among the world\u2019s most valuable privately held firms and Wall Street investors expect any, or all of them, could become publicly traded within the next year or so. But unlike SpaceX, which has its rocket business to fall back on, or established tech giants \u2014 like Amazon, Google and Microsoft \u2014 both Anthropic and OpenAI must find a way to make enough from selling AI products to pay for the huge costs in computer chips and data centers to run their energy-hungry AI systems.
It\u2019s not that Anthropic and OpenAI aren\u2019t making money or growing their product lines. The private firms don\u2019t publicly disclose sales but both have signaled they are making billions of dollars in revenue on their existing products, including paid chatbot subscriptions for individual users.
But it costs a lot more money to fund the computing infrastructure needed to build these powerful AI models and respond to the millions of prompts they get each day. OpenAI, in particular, has said it owes more than $1 trillion in financial obligations to backers \u2014 including Oracle, Microsoft and Nvidia \u2014 that are essentially fronting the compute costs on the expectation of future payoffs.
For some, the wait will likely be worth it.
\u201cProfitability matters, but not as a near\u2011term decision factor for investors who remain focused on scale, differentiation and infrastructure leverage,\u201d said Forrester analyst Charlie Dai. \u201cBoth companies continue to post heavy losses, yet investors still back them because the frontier\u2011model race demands extraordinary capital intensity.\u201d
Denise Dresser, OpenAI\u2019s newly hired chief revenue officer, told reporters this week that the company\u2019s priority is \u201cbuilding the best enterprise platform for all industries, all segments.\u201d
\u201cI don\u2019t think we\u2019re thinking about it from a revenue standpoint, but truly from a customer outcome standpoint,\u201d she said, in part reflecting the \u201csense of urgency\u201d she\u2019s heard from CEOs who want a smoother way of applying AI.
\u201cThere\u2019s a recognition that AI is becoming a core operating advantage,\u201d Dresser said. \u201cThey don\u2019t want to be on the wrong side of that shift.\u201d
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