OpenAI’s Bold New AI Model Hits Regulatory Hurdles and Financial Strain

OpenAI is reportedly developing a new AI model, named "Strawberry," which aims to advance beyond the current GPT-4o by offering enhanced reasoning abilities and more humanlike responses.

The company is currently facing regulatory scrutiny, including a potential investigation by the U.S. Securities and Exchange Commission (SEC) over alleged issues related to non-disclosure agreements.

On July 23, U.S. lawmakers expressed concerns about OpenAI’s safety protocols and employment practices, questioning the company’s transparency and requesting that future models be made available for government testing.

Financially, OpenAI is experiencing significant strain, with projections indicating a possible $5 billion loss in 2024. This could lead to a cash shortfall within a year, according to The Information.

The firm is expected to spend around $7 billion on AI training and an additional $1.5 billion on staffing, far surpassing the expenses of competitors like Anthropic, which anticipates a $2.7 billion burn rate for 2024.

To address these financial challenges, OpenAI may need to secure additional funding within the next year. The company has already completed seven funding rounds, raising over $11 billion, including a recent private round with ARK Investment Management.

OpenAI, which launched ChatGPT in November 2022, has seen rapid growth, with over 100 million weekly users. On July 18, the company also introduced a new generative AI model, “GPT-4o Mini.”