Welcome to Eye on AI! On this version...OpenAI releases GPT-5 and strikes a $1 authorities deal. AI homework helpers duke it out. Zoox will get a particular exemption.
One of many defining truths concerning the world of generative AI is that even while you’re on high, the lead doesn’t final for lengthy.
And so, the 2 key questions popping out of OpenAI’s long-awaited launch of GPT-5 as we speak are whether or not the brand new LLM might help the corporate reclaim the mantle of undisputed AI chief—and if that’s the case, how lengthy can OpenAI preserve the lead?
OpenAI says GPT-5 delivers “extra correct solutions than any earlier reasoning mannequin,” and is “a lot smarter throughout the board,” mirrored by sturdy efficiency on tutorial and human-evaluated benchmarks. Its analysis weblog boasts of latest state-of-the-art efficiency throughout math, coding, and well being questions, and located that GPT-5 outperformed different OpenAI fashions throughout duties spanning over 40 occupations, together with regulation, logistics, gross sales, and engineering.
“GPT-5 actually appears like speaking to a PhD degree skilled in any matter,” OpenAI CEO Sam Altman informed journalists in a pre-briefing on Wednesday. “One thing like GPT-5 can be just about unimaginable in every other time in historical past.”
Altman described GPT-5 as a “vital step” alongside the trail to synthetic basic intelligence (AGI), which, based on OpenAI’s mission assertion, is outlined as “extremely autonomous programs that outperform people at most economically worthwhile work.”
It’s unclear whether or not this mix of pace, energy and options will likely be sufficient, nevertheless. Some two years within the making (GPT-4 was launched in March 2023), GPT-5’s launch has taken longer than many business insiders anticipated, as OpenAI has adjusted its method in response to business adjustments. And whereas ChatGPT now boasts a formidable 700 million weekly customers, OpenAI has confronted rising strain over the previous yr as rivals poach its expertise and race forward on rising AI strategies like long-context reasoning and autonomous device use. Along with Huge Tech opponents like Meta and Google, there’s a wave of startups based by OpenAI’s personal former researchers, together with Anthropic, Pondering Machines, and Secure Superintelligence. And naturally, there’s the brand new crop of highly effective Chinese language fashions, like DeepSeek, vying for world affect.
Whether or not GPT-5 propels OpenAI again to the highest of the AI hill will grow to be clear within the days and weeks forward, as researchers put the mannequin by its paces, testing it in opposition to the likes of different elite fashions, together with Anthropic’s newest Claude mannequin and Google’s Gemini.
OpenAI pushes to remain within the lead
With GPT-5 now lastly out, OpenAI CEO Sam Altman acknowledged that staying on the frontier means one factor: relentless scaling.
In AI, scaling refers to the concept fashions get extra highly effective as you enhance the quantity of information, computing energy, and mannequin elements used throughout coaching. It’s the underlying precept that drove progress from GPT-2 to GPT-3 to GPT-4—and now GPT-5. The catch is that every leap requires exponentially extra funding, notably in AI infrastructure—for OpenAI, that features its Stargate Challenge, a three way partnership it introduced in January with Softbank, Oracle and funding agency MGX with a purpose to to take a position as much as $500 billion by 2029 in AI-specific information facilities throughout the U.S.
When requested whether or not scaling legal guidelines nonetheless maintain, Altman stated they “completely” do. He pointed to raised fashions, smarter architectures, higher-quality information, and considerably extra computing energy as the trail to “order-of-magnitude” enhancements nonetheless forward.
However that sort of progress comes at a price. “It’s going to take an eyewatering quantity of compute,” he admitted. “However we intend to proceed doing it.”
That in fact, requires large amount of cash and partnerships.
On the intense facet, OpenAI has roughly doubled its income within the first seven months of 2025, hitting an annualized run price of $12 billion—up from about $6 billion firstly of the yr, based on a current report by The Info. That interprets to $1 billion in month-to-month income, fueled by surging demand for its ChatGPT merchandise throughout each client and enterprise markets. Weekly energetic customers for ChatGPT have jumped to round 700 million, up from 500 million throughout all OpenAI merchandise as of late March. And earlier this week OpenAI launched a free, open-source mannequin—an uncommon transfer for a corporation usually criticized for its closed method over the previous half-decade—suggesting confidence that its premium providing, which is now GPT-5, will proceed to dominate.
However there are some large challenges forward, nevertheless. For one factor, the partnership between Microsoft and OpenAI—that started with a $1 billion funding in 2019—is getting into a extra fraught and sophisticated part. Whereas Microsoft has invested greater than $13 billion and retains unique rights to OpenAI’s fashions by Azure, tensions have emerged over income sharing, AGI management clauses, and overlapping product methods. And the Stargate undertaking is reliant on partnerships with corporations like SoftBank, whose funding stipulations are tied to OpenAI’s nonetheless unresolved efforts to overtake its company construction.
There’s rather more to say about GPT-5. Journalists acquired the total set of supplies from OpenAI, together with a analysis weblog, system card, and security card, a mere 90 minutes earlier than releasing the mannequin, so I nonetheless have rather more to undergo. Keep tuned for extra!
Additionally: In lower than a month, I will likely be headed to Park Metropolis, Utah, to take part in our annual Brainstorm Tech convention on the Montage Deer Valley! House is restricted, so for those who’re involved in becoming a member of, register right here. I extremely advocate: There’s a improbable lineup of audio system, together with Ashley Kramer, chief income officer of OpenAI; John Furner, president and CEO of Walmart U.S.; Tony Xu, founder and CEO of DoorDash; and lots of, many extra!
With that, right here’s the remainder of the AI information.
Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman
AI IN THE NEWS
OpenAI strikes a $1 authorities deal. OpenAI has struck a take care of the U.S. authorities to offer federal companies entry to its frontier AI fashions—together with ChatGPT—for simply $1 over the following yr, based on a joint announcement with the Common Providers Administration (GSA). The partnership displays months of behind-the-scenes outreach by OpenAI CEO Sam Altman and his workforce, who’ve been cultivating ties with the Trump administration since earlier than Donald Trump’s return to the White Home in January. In a press release to Wired, Altman framed the settlement as a part of President Trump’s AI Motion Plan, saying it could assist public servants leverage AI to raised serve the American individuals.
AI homework helpers duke it out. One week after OpenAI launched a ChatGPT Examine Mode, Google has jumped into the AI tutor recreation with a brand new Guided Studying mode. Google says it labored carefully with studying specialists, lecturers, and college students to develop Guided Studying, which is built-in inside Gemini. Like ChatGPT’s Examine Mode, Google’s Guided Studying is designed to encourage customers to work by issues by “probing and open-ended questions,” fairly than simply spit out the solutions. With courses at many faculties and universities set to begin within the coming weeks, the large query will likely be whether or not college students truly need an AI research companion, or are content material with an AI reply machine.
Zoox will get a steering wheel exemption. The evolution of the robotaxi took a step ahead Wednesday as U.S. federal regulators gave permission for Amazon’s Zoox to check self-driving shuttles with no steering wheel, pedals, or different handbook controls. The transfer clears up a degree of ambiguity within the self-driving automobile business. Whereas Zoox had beforehand claimed its autos have been compliant with federal motorcar requirements, the Nationwide Freeway Site visitors Security Administration’s guidelines appeared to counsel that was not the case. The NHTSA’s transfer makes it clear that U.S.-built self-driving automobiles do certainly want handbook controls to function (even for testing) on public roads, however grants Zoox an exemption—and it opens the door for different robotaxi corporations reminiscent of Tesla to get a waiver.
FORTUNE ON AI
AI is already upending the company org chart because it flattens the gap between the C-suite and everybody else —by Beatrice Nolan
How Palantir—an organization too small to make the Fortune 500—turned one of many world’s 25 most precious corporations —by Jessica Matthews
AI CALENDAR
Sept. 8-10: Fortune Brainstorm Tech, Park Metropolis, Utah. Apply to attend right here.
Oct. 6-10: World AI Week, Amsterdam
Oct. 21-22: TedAI San Francisco. Apply to attend right here.
Dec. 2-7: NeurIPS, San Diego
Dec. 8-9: Fortune Brainstorm AI San Francisco. Apply to attend right here.
EYE ON AI NUMBERS
$364 billion
The overall amount of cash that tech’s 4 high hyperscalers—Meta, Microsoft, Google, and Amazon—plan to spend on 2025 capital expenditures as they construct up their AI and cloud infrastructure. The businesses are pouring large sums of cash into constructing and increasing information facilities stuffed with costly Nvidia GPUs in a race to remain forward in AI and to attain AGI.
