OpenAI’s transformative 2024: From nonprofit roots to Big Tech contender

Looking back: ChatGPT-maker OpenAI underwent a transformative 2024, marked by investments, strategic pivots, leadership changes, and intensifying competition in the generative AI (genAI) space. Below, we dive into the most significant trends and shifts that shaped AI’s leading company this year.

September: OpenAI started the latter part of the year with a flurry of announcements. The company unveiled its latest innovations as it leaned away from nonprofit origins to focus on profits and expansion.

• OpenAI announced its o1 models, focusing on reasoning and critical thinking over speed, aiming to elevate AI’s utility in academic and professional contexts. 
• It continued its transition from nonprofit to a for-profit structure, potentially valuing the company at $150 billion and giving it a longer runway to dominate AI.

October: The month revealed cracks in OpenAI’s relationship with Microsoft, its largest investor. 

• As OpenAI expanded its outlook, Microsoft diversified its AI investments with other startups and bolstered its in-house AI talent. 
• Meanwhile, OpenAI partnered with Broadcom to build bespoke AI hardware, reducing reliance on Nvidia and strengthening its technological autonomy.

November: OpenAI targeted Google’s dominance in search and web browsers. 

• Reports revealed plans for a conversational search tool called NLWeb and the potential development of a ChatGPT-integrated browser. 
• This came as Google faced antitrust scrutiny over its Chrome monopoly, which opened up opportunities for OpenAI to gain ground—especially as regulators pushed for competition in the browser space.

December: The company finally released its anticipated AI video generator Sora as part of its “12 Days of OpenAI” year-end announcements. 

GenAI rivalries and executive departures: Throughout the year, ex-OpenAI executives founded competitors like WaveForms AI and Safe Superintelligence, raising concerns about talent retention. 

• OpenAI’s market share in genAI was projected to drop to 65.3% by 2026, per our forecast, as rivals like Google and Anthropic gained ground. 
• This is expected to accelerate OpenAI’s diversification beyond AI chatbots into agents, search, education, and devices.

Outlook for 2025: OpenAI’s evolution from a nonprofit to a Big Tech player has opened doors for innovation and profitability, but it has also heightened pressure to demonstrate profit.

• In 2025, the company will face challenges balancing surging competition and regulatory scrutiny and the need to monetize its growing AI ecosystem. 
• Its success, and its potential to IPO, will hinge on advancing multimodal AI, maintaining leadership in genAI, and navigating a rapidly changing landscape.
• However, there is a danger that the company spreads itself too thin and ends up as AI’s jack of all trades while falling behind more focused and less overtaxed competitors.

This article is part of EMARKETER’s client-only subscription Briefings—daily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends. To help you finish 2024 strong, and start 2025 off on the right foot, articles like this one—delivering the latest news and insights—are completely free through January 31, 2025. If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.