Why OpenAI caved to open-source on the same day as its $300 billion valuation?
To judge by his social feeds, OpenAI CEO Sam Altman is a very happy camper, as his company notches one eye-popping success after another. The startup he cofounded in 2015 just raised $40 billion at a $300 billion valuation, the biggest funding round ever by a private tech company; everyone on the internet seems to be posting Studio Ghibli–style images courtesy of OpenAI’s new GPT-4o image-generation model; and ChatGPT now has 500 million weekly users, up from 400 million last month.
The shift towards open-source
And yet, along with all this good news, Altman revealed Monday that OpenAI is making what appears to be a pretty big about-face in its strategy: In several months, Altman said, OpenAI will be releasing an open-source model. The move would mark the first time the company has released an open model since the launch of GPT-2 in 2019, seemingly reversing the company’s shift to closed models in recent years.
Granted, the forthcoming model will not be 100% open; as with other companies offering “open” AI models, including Meta and Mistral, OpenAI will offer no access to the data used to train the model. Still, the usage license would allow researchers, developers, and other users to access the underlying code and “weights” of the new model (which determine how the model processes information) to use, modify, or improve it.
Reasons behind the decision
On its surface, the direct cause of OpenAI’s open-source embrace might appear to come from China, specifically, the emergence of startup DeepSeek, which flipped the AI script in favor of open-source in January. But according to several AI industry insiders whom Fortune spoke to, a broader, and more nuanced, set of factors is also likely motivating Altman’s change of heart on open-source. As AI technology makes its way into businesses, customers want the flexibility and transparency of open-source models for many uses.
Naveen Rao, VP of artificial intelligence at Databricks, said OpenAI’s move is more about an admission that the AI landscape is changing. Value is shifting away from the models themselves to the applications or systems organizations use to customize a model to their specific needs.
Implications and future outlook
Many enterprise companies are excited about open-source AI models—not just because of how accurate they are or how well they answer questions, but because they’re flexible. The fact that they are portable is key, he explained—meaning they can run on different cloud platforms or even on a company’s own data center, workstation, laptop, or robot, instead of being tied to one provider.
