"Chat is dead": Open AI preps overhaul of Chat GPT - Ars Technica

Overview

Open AI to recast hit chatbot as a route to higher-margin products before a potential IPO.

Open AI is preparing the biggest overhaul of Chat GPT since its launch kicked off the AI boom, as the $850 billion group hunts for new engines of growth ahead of a planned listing this year.

Details

The company intends to transform the chatbot into a “superapp” that combines coding tools and AI agents, adding products that executives believe will generate more revenue.

The changes are part of a broader reorganization at Open AI as the San Francisco-based company shifts resources into trying to win lucrative business customers and compete more fiercely with rival Anthropic, according to more than a dozen current and former employees.

Open AI faces growing pressure to drive revenues higher and forge a path to profitability, as it prepares for an initial public offering.

The strategy marks a departure for a company, led by chief executive Sam Altman, that became the face of the AI boom and took the technology mainstream when it unveiled Chat GPT in 2022.

The changes, which will give greater prominence and resources to Open AI’s coding product Codex, reflect a growing conviction within the company that the future of AI lies not in chatbots that answer questions but in agents that perform tasks for users.

Open AI executives increasingly view Chat GPT, which has attracted nearly 1 billion users since its launch, as a gateway to introduce users to higher-value products. The majority of consumers use the chatbot for free.

The company is embarking on the changes amid a belief that the advent of AI agents, which can perform multiple tasks for users from booking travel to organising calendars, will be a more valuable product than the chatbot.

At the same time, products such as Codex are able to write code and create software based on simple instructions from users.

The overhaul, which is set to begin rolling out in coming weeks, will initially appear as changes to Chat GPT’s website and mobile apps, encouraging customers towards using coding, image-generation and apps from external partners.

The changes underline how Open AI’s strategy is moving closer to that of Anthropic, whose focus on developing products for businesses has stoked its blistering growth, and will be at the heart of its pitch to investors in an IPO this year.

Outlining the changes, Thibault Sottiaux, who previously ran Codex and now leads all of Open AI’s core product and platform, told the FT: “It will transcend the actual surface . . . what we’re building towards is where you have your own personal agent that is capable of helping you… across everything in your life, be it personally or at work.”

He added: “You can connect through it on your mobile, desktop or web. When you’re in the car, you can talk to it.”

The majority of Codex users pay for the service, according to people familiar with the matter, while the 2 million businesses that use Open AI’s products account for roughly 40 percent of its revenue.

The company anticipates this will rise to 50 percent by the end of the year.

Open AI’s Codex product has increased its user base sixfold to more than 5 million weekly active users since the launch of a desktop application in February.

Its launch has intensified competition with Anthropic, whose Claude Code product has emerged as one of the start-up’s fastest-growing businesses.

“Approximately a year ago, Open AI’s strategy was swing for the fences, whereas Anthropic’s strategy is make money first,” said Jenny Xiao, partner at Leonis Capital and former researcher at Open AI.

“Now the two are converging, because both of them are trying to aim for an IPO and investors care more about money than dreams.”

To encourage users to adopt those services, Open AI is redesigning Chat GPT’s interface, adding new prompts and features that direct users towards coding tools, image generation and applications built by partners such as Canva and Booking.com, according to people familiar with the plans.

Over time, Open AI intends to ditch the prompts and features, betting that its models will be able to automatically understand users’ intentions when they are on the app or site.

This year, the company has brought Chat GPT, Codex and other product teams under a single leadership group led by Sottiaux, while several senior executives, including former product head Kevin Weil, have departed.

In a sign of Open AI’s push to win more business customers, some consumer-focused initiatives have been sidelined, including a checkout feature that allowed purchases within Chat GPT. It also shut down Sora, its video-generation product, less than a year since its launch.

Executives believe users will increasingly interact with a single AI assistant rather than a collection of separate applications. As agents become more capable, Open AI expects the distinction between chatbots, coding tools, search products and other software categories to blur.

“When we have [artificial general intelligence], I don’t think there will be a large number of distinct brands,” said Alex Embiricos, Open AI’s head of enterprise product. “Probably there will be a single entity that I can talk to that can do whatever I need.”

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Key Takeaways

• Open AI to recast hit chatbot as a route to higher-margin products before a potential IPO
• Open AI is preparing the biggest overhaul of Chat GPT since its launch kicked off the AI boom, as the $850 billion group hunts for new engines of growth ahead of a planned listing this year
• The company intends to transform the chatbot into a “superapp” that combines coding tools and AI agents, adding products that executives believe will generate more revenue
• The changes are part of a broader reorganization at Open AI as the San Francisco-based company shifts resources into trying to win lucrative business customers and compete more fiercely with rival Anthropic, according to more than a dozen current and former employees
• Open AI faces growing pressure to drive revenues higher and forge a path to profitability, as it prepares for an initial public offering