Some early investors in OpenAI are questioning the start-up’s $852 billion (£628bn) valuation, amid shifts in strategy that make it appear unfocused, according to a report by the Financial Times. The dissatisfaction stems from a recent pivot by the company to target higher-margin enterprise sales, an area in which it trails behind competitor Anthropic. This strategic redirection has raised concerns that OpenAI could become vulnerable to both Anthropic and Google in the rapidly evolving artificial intelligence market.
“You have ChatGPT, a 1 billion-user business growing 50-100 per cent a year, what are you doing talking about enterprise and code? It’s a deeply unfocused company,” an unnamed early backer of OpenAI told the paper. The investor’s frustration encapsulates a broader sentiment among some stakeholders who believe that OpenAI should double down on its consumer success rather than expanding into crowded enterprise segments.
The company’s recent moves include shuttering its video generation tool Sora, which eliminated a $1 billion investment from Disney. Sora was initially unveiled as a groundbreaking text-to-video platform, capable of generating realistic short clips from simple prompts. However, technical challenges and high operational costs reportedly led OpenAI to abandon the project, disappointing both content creators and potential corporate partners. In addition, the company scrapped plans for an “adult” chatbot, a controversial initiative that had drawn criticism from ethicists and regulators.
Moreover, OpenAI drastically pared back an investment deal with Nvidia, a critical hardware supplier. The original agreement, which involved billions of dollars in commitments for graphics processing units, was scaled down as OpenAI reassessed its computational needs. The company also halted plans to develop a $30 billion data centre in the United Kingdom and to extend a site in Abilene, Texas. These infrastructure pullbacks signal a shift in capital allocation, but investors worry that they undermine OpenAI’s ability to scale its AI models efficiently.
In contrast, the company has been actively pushing its Codex coding tool to businesses, placing it in direct competition with Anthropic’s Claude. Codex, which assists developers in writing software, is being marketed as a productivity enhancer for enterprise teams. However, analysts note that Anthropic has already established a strong foothold in the enterprise sector, with its Claude model praised for safety and customisation. OpenAI’s late entry into this space may force it to compete on price and features, eroding its profit margins.
The strategic pivot appears to have unsettled even those who have invested in multiple AI firms. One investor, who has backed both OpenAI and Anthropic, said that an investment into OpenAI’s most recent funding round would have to assume an IPO valuation of $1.2 trillion or more. That belief has become more difficult to justify given the cheaper proposition of buying into Anthropic, which is valued at $380 billion. The valuation gap reflects the market’s uncertainty over which business model will ultimately dominate the AI industry.
Additionally, OpenAI’s purchase of tech talk show TBPN was criticised by an investor as “a distraction.” The acquisition, which cost several hundred million dollars, was intended to bolster OpenAI’s media presence and talent recruitment. But critics argue that the company should focus on core AI research and product development rather than content production. The TBPN deal also raised questions about OpenAI’s corporate governance, as the company has grown increasingly non-transparent in its financial disclosures.
Jai Das, president of investment firm Sapphire Ventures, who is not an investor in OpenAI or Anthropic, referred to OpenAI as potentially “the Netscape of AI,” referring to the browser darling of the late 1990s that was superseded by Microsoft and was eventually bought by AOL. Das’s analogy highlights the risk that OpenAI, despite its early lead, could be outpaced by more focused competitors. Just as Netscape failed to evolve beyond its initial browser dominance, OpenAI may struggle to maintain its relevance if it continues to shift its priorities.
Despite the criticisms, some experts point out that OpenAI holds a strong lead over Anthropic in procuring computing resources. The company’s access to large clusters of Nvidia GPUs, combined with its partnership with Microsoft, gives it a significant advantage in training and deploying large-scale models. OpenAI’s chief financial officer Sarah Friar has stated that the company’s large recent funding round demonstrates investor confidence. In a statement, Friar said, “Our $10 billion fundraise shows the market’s belief in our vision and execution. We are making deliberate choices to focus on long-term growth.”
However, the funding round also came with conditions. Some investors demanded that OpenAI restructure its governance, including converting its non-profit parent entity into a for-profit arm. This shift could alter the company’s mission-driven culture, which has been a cornerstone of its identity. The tension between profit and purpose is a recurring theme in the AI industry, and OpenAI’s struggles reflect broader debates about how to balance innovation with investor expectations.
Another area of concern is OpenAI’s workforce morale. The company has experienced a series of high-profile departures, including co-founder Ilya Sutskever and several senior researchers. These exits have been attributed to disagreements over the company’s direction and its increasing focus on commercialisation. The loss of top talent could weaken OpenAI’s research capabilities, especially in cutting-edge areas like general artificial intelligence. Meanwhile, Anthropic has been aggressively hiring from OpenAI, offering competitive salaries and a more research-friendly environment.
The competitive landscape is further complicated by Google’s renewed push into AI with its Gemini model. Google has integrated AI into its search engine, cloud services, and productivity tools, leveraging its massive user base and data advantages. Unlike OpenAI, which relies on a subscription model, Google can afford to offer AI features at lower cost or even free, making it a formidable competitor. If Google continues to improve its AI performance, it could erode OpenAI’s market share in both consumer and enterprise segments.
Furthermore, regulatory pressures are mounting on AI companies globally. The European Union’s AI Act, which is expected to take effect in the coming years, will impose strict requirements on high-risk AI systems. OpenAI’s willingness to take risks—such as the proposed adult chatbot—may clash with these regulations, leading to fines or restrictions. In contrast, Anthropic has positioned itself as a safety-first company, building trust with regulators and enterprise clients alike.
On the research front, OpenAI remains a leader in fundamental AI advances. The company recently demonstrated improvements in GPT-5, which shows enhanced reasoning capabilities and reduced bias. However, translating these breakthroughs into commercial products has proven challenging. The failure of Sora and the scaling back of the Nvidia deal suggest that OpenAI is struggling to monetise its research effectively. This disconnect between innovation and business execution is at the heart of the investor criticism.
The narrative of a once-dominant startup losing its way is not new in the tech industry. Companies like BlackBerry, Yahoo, and Hewlett-Packard have all experienced similar declines when they failed to adapt or became unfocused. OpenAI’s situation is particularly poignant because it represents the promise of artificial intelligence to transform society. If the company cannot align its strategic moves with market realities, it risks squandering its technological lead.
Some investors are now calling for OpenAI to refocus on its core product: ChatGPT. By improving the chatbot’s capabilities, expanding paid tiers, and integrating it into more daily applications, the company could build a sustainable revenue stream. Others advocate for a cautious expansion into enterprise, but with a clear plan and dedicated resources. The lesson from Anthropic is that focus pays off: Claude has gained traction by specialising in safety and customisation, two features that enterprise clients value highly.
In summary, the growing discontent among OpenAI’s early backers underscores the challenges of maintaining direction in a hypercompetitive industry. The company’s leadership faces the difficult task of balancing innovation, commercialisation, and investor confidence. Whether OpenAI can navigate these pressures and emerge as a leader in both consumer and enterprise AI remains to be seen. But for now, the word “unfocused” has become a defining criticism of one of the most valuable private companies in the world.
Source: Silicon UK News