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Whatever the ultimate impact on our world of Openai and the human level artificial intelligence it aims to achieve, it can already claim one entry in history books. No other companies have ever built a consumer internet empire that fast.
It took Facebook 13 years to reach 800 million users, but it reached the same milestone with 800 million people. Thanks to the success of ChatGpt’s virus, Openai is on track to get there with the three of them.
Speed was surprised even the leader. Until recently, they argued that their main goal was to turn the company into an AI platform for other companies to plug in, and that it was not a consumer company in itself. However, CEO Sam Altman said last week that the audience doubled in a few weeks and is now made up of a tenth of the world.
This is daunting. ChatGpt passed 200 million visitors last August. With rapid growth, the company left little time to address some of the most basic questions for consumer internet companies.
One of these questions: Can OpenAI maintain user attention when a huge rival controls the key channels of digital delivery? Meta has a huge audience of prisoners of war on networks such as WhatsApp and Instagram. Apple has an iPhone. As these companies promote their own generic consumer AI, Openai faces the same challenges they faced with Google in the early days of maintaining a direct connection with users (in Google, the threat came from Microsoft Windows.
Openai can at least refer to the eye-catching distribution agreement that it reached with Apple last year. Based on this, Apple’s Siri offers to hand out user queries to ChatGPT if it cannot answer itself. However, if Apple can overcome the recent set-off that delayed the full launch of its own AI service, this appears to be designed to be nothing more than a temporary arrangement.
Openai needs to come up with its own devices and software to avoid these failures. Google faced the same problem early on, creating a Chrome browser as an alternative to Microsoft, and using Android to rival iPhones. The success of this defensive strategy has returned to plague it. A judge overseeing a search company’s antitrust cases will decide whether to force Google to spin off Chrome in the coming months. If so, he might present Openai with a rare opportunity to purchase a ready-made platform used by more than half of the world’s internet users.
The second basic question Openai barely started working on is how to make money from this new consumer audience. Advertising has previously been the preferred route for mass market internet companies. So far, Altman has been nosey at ideas and prefers to resort to subscriptions.
This has had impressive results. The company’s revenue jumped to around $4 billion last year, with investors recently valuing $300 million. However, Google did not reach that valuation until its annual revenue reached $600 billion.
The third big question before Openai: What is ChatGpt? The latest surge in user numbers followed the launch of image generation on the GPT-4O model, and sparked a viral online trend to create images that appear to be in the style of the well-known Japanese animation house Studio Ghibli.
Such fadish features can drive peak usage, but are not a durable foundation for future growth. This dilemma is in contrast to Google. From its first visit, Google knew what the service was. This is a better web search.
From getting help with homework to conducting in-depth research, many people found great value with ChatGpt. But it is evolving rapidly. Web search was added only in October last year, opening up competition with Google. This month, its memory was expanded to pull out all of its previous interactions with the user when responding to a prompt.
This inchote product strategy makes sense in a world where AI is rapidly evolving and the ultimate prize is still unknown. But when competing for the 100 million users milestone, Openai still has a long way to prove it can become the next consumer internet giant.
richard.waters@ft.com
