OpenAI faces tough competition from open-source AI models and Microsoft Azure

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OpenAI, the company behind ChatGPT, is facing tough competition from open-source AI models and Microsoft Azure. While OpenAI’s revenue has skyrocketed thanks to ChatGPT Plus subscriptions, the company is still learning the ropes in the enterprise world.

Enterprises are finding open-source AI models to be cheaper and more specialized than OpenAI’s offerings.

OpenAI is also at the risk of being outshone by open-source models such as Mistral AI, which are smaller and simpler but pack enough punch for many tasks. For instance, the founder of developer tools startup Dagster, Pete Hunt, switched from OpenAI’s GPT-3.5 model to a nifty open-source model from Mistral AI, for his service, saving a bundle without compromising on quality.

Microsoft is also choking OpenAI Enterprise. According to its recent earnings report, the tech giant’s revenue has risen 13% to $56.5 billion, as the sale of its AI cloud through Azure has accelerated, all thanks to OpenAI’s GPT. When customers buy OpenAI through Azure, Microsoft snags a fatter slice of the pie.

OpenAI is trying to fix the problem by focusing on its autonomous AI agents, which are slated for release next month. The company is also making DALL-E 3 available for all the ChatGPT Plus and ChatGPT Enterprise users. However, enterprise customers are still not impressed as they crave more specialized business use cases, and not generalised.

The sources for this piece include an article in AnalyticsIndiaMag.

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