OpenAI's Funding Advantage Over Rivals Grows

Talk about an endorsement! For all the talk about OpenAI falling behind Google, the ChatGPT maker doesn’t seem to be having any problems attracting big backers. Last week it was Disney, putting in $1 billion, and soon it’s likely to be Amazon, judging from The Information’s scoop on Tuesday night that Amazon was in talks to invest more than $10 billion in OpenAI. On top of that, tonight we scooped the news that OpenAI is discussing with some investors raising as much as $100 billion.

All this means it will be harder for others on the front lines of AI development to keep up. Google, at least, has the resources to do so, given that it has a hugely profitable ad business and a money-making cloud business that’s directly benefiting from new AI services. Anthropic has the backing of Amazon and Google, and its business appears to be flourishing. The big questions hang over Meta or xAI, which are trying to compete with Google and OpenAI in AI models but without an obvious business model to earn a return on the development costs. (See here for more on xAI’s efforts to develop a business model.)