Sam Altman, the CEO of AI firm OpenAI, recently cautioned employees that Google’s advancements in artificial intelligence could pose temporary economic challenges for OpenAI. In a memo circulated last month, he acknowledged that Google may have developed a new AI technology that has temporarily outpaced OpenAI’s offerings. “We know we have some work to do,” Altman stated, admitting that public perception might be “rough for a bit,” in light of the upcoming announcement of Google’s Gemini 3.
Despite these concerns, OpenAI maintains its position as a leader in the field, boasting a valuation of approximately $500 billion. However, competition is intensifying, with Anthropic, a company established by former OpenAI employees, projected to generate more developer revenue than OpenAI this year. Additionally, Google is leveraging its Gemini chatbot within popular products like Google Search, which is gradually narrowing the usage gap with OpenAI’s ChatGPT. Altman noted that OpenAI’s ambitious spending plans are also a factor, with expectations to exceed $100 billion in expenses to achieve human-level AI, necessitating significant future fundraising efforts.
In addressing internal technical challenges, Altman expressed admiration for Google’s recent success in pretraining AI models, referring to it as “excellent work.” This acknowledgment surprised many in the research community, given OpenAI’s difficulties in achieving similar gains with larger models. In response, OpenAI is developing a new model named Shallotpeat, aimed at resolving these pretraining challenges. Altman emphasized that OpenAI will prioritize innovative strategies, such as reinforcement learning and automating AI research, even if it results in a temporary setback compared to competitors.
On the financial front, analysts are optimistic about Google’s stock, assigning it a Strong Buy consensus rating, backed by 31 Buy and seven Hold recommendations over the past three months. The average price target for Google shares stands at $312.00, suggesting a potential upside of 4.1% from current levels. This positive outlook reflects broader confidence in Google’s strategic direction amid the competitive climate in AI.
As the race for AI supremacy continues, the interplay between OpenAI and Google is likely to shape the future of the industry. With both companies pushing the boundaries of technology, developments in the coming months will not only influence their market positions but could also redefine the landscape of artificial intelligence itself.
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