OpenAI

The Company That Started the Race

Founded: 2015 | HQ: San Francisco, CA | Key People: Sam Altman (CEO), Greg Brockman (President) | Valuation: $730 billion (pre-IPO, April 2026), targeting ~$1 trillion at IPO | Flagship Models: GPT-5.4, GPT-5.5, GPT-5.5 Instant, GPT-5.5 Thinking, o3, o4-mini, DALL-E 3, Sora

The Origin Story

OpenAI was founded in December 2015 as a nonprofit AI research lab by Sam Altman, Elon Musk, Greg Brockman, Ilya Sutskever, and others, with a $1 billion pledge to ensure artificial general intelligence would benefit all of humanity. The founding vision was explicitly safety-oriented: build AI openly and prevent any single corporation from monopolizing superintelligence. Musk departed in 2018 over disagreements about direction and speed, later citing conflicts with Tesla's own AI ambitions. In 2019, OpenAI restructured as a capped-profit entity, creating OpenAI LP to attract the enormous capital required for frontier model training while retaining a nonprofit governance board. That structural pivot proved both prescient and volatile, setting the stage for the most dramatic corporate governance crisis in Silicon Valley history. Altman, a former Y Combinator president, became the singular public face of the AI revolution.

Key Milestones

The launch of ChatGPT on November 30, 2022, was the inflection point that transformed AI from a niche research pursuit into a mainstream consumer phenomenon. The chatbot reached one million users in five days and 100 million monthly active users within two months, making it the fastest-growing consumer application in history. In March 2023, GPT-4 debuted as a multimodal model capable of processing both text and images, cementing OpenAI's technical lead. Microsoft's $13 billion investment, announced across 2023, gave it a 49% economic stake and exclusive cloud partnership. The defining drama came in November 2023, when the nonprofit board abruptly fired Sam Altman, citing failures of candor. Within 72 hours of chaos—during which Altman briefly joined Microsoft and 747 of 770 OpenAI employees threatened to resign—the board capitulated and reinstated Altman. The episode exposed deep tensions between OpenAI's safety-first founding ethos and its commercial imperatives. Ilya Sutskever, the chief scientist who had supported the ouster, departed in May 2024. OpenAI's fundraising trajectory has been staggering: a $40 billion round in April 2025 valued the company at $300 billion, followed by a $110 billion round in February 2026 at $730 billion. Revenue projections for 2026 exceed $20 billion annually. By February 2026, ChatGPT surpassed 900 million weekly active users and 50 million paying subscribers, with users sending 2.5 billion prompts daily. The model family expanded with reasoning-focused o1 and o3 models, image generation via DALL-E 3, video generation with Sora, and the GPT-5 series launched in early 2026. In April 2026, OpenAI released GPT-5.5, a fully retrained agentic model scoring 82.7% on Terminal-Bench 2.0 and 84.9% on GDPval.

On April 27, 2026, OpenAI and Microsoft formally ended their 6-year exclusive cloud partnership. The following day, OpenAI models (GPT-5.5, GPT-5.4, Codex) launched on Amazon Bedrock, alongside new "Bedrock Managed Agents powered by OpenAI." Amazon invested $50 billion ($15B upfront, $35B conditional) as part of a broader funding round, with OpenAI committing to 2 GW of AWS Trainium capacity and $100B+ in cloud spend over 8 years. On May 5, GPT-5.5 Instant became the default ChatGPT model across Free, Plus, and Pro tiers. On May 20, OpenAI was reported to be preparing a confidential IPO filing with the SEC, with Goldman Sachs and Morgan Stanley leading the process, targeting a September 2026 public debut at an implied valuation near $1 trillion. OpenAI also announced a partnership offering $2M in tokens to every Y Combinator company in the Spring 2026 batch. On May 29, OpenAI expanded Codex's computer use feature to Windows, following its earlier Mac launch—enabling the AI agent to "see" screens and perform tasks autonomously across both major desktop platforms. The same day, OpenAI announced it is sunsetting the Canvas interface (side-by-side code/text editing) for GPT-5.5 Instant and GPT-5.5 Thinking, keeping it available only through legacy models for a limited time. GPT-5.5 Instant also received updates to trim response length and reduce "bullet-heavy" formatting, making outputs more concise and readable.

Current Position

OpenAI dominates the consumer AI market with ChatGPT commanding an estimated 60% share of the generative AI market. The company is aggressively expanding into enterprise services through ChatGPT Enterprise and API access, now available across both Azure and AWS. Its product strategy spans agentic AI capabilities (including Workspace Agents for autonomous team collaboration), search integration within ChatGPT, and a nascent advertising business that reportedly surpassed $100 million in annualized revenue. The end of Microsoft exclusivity marks a strategic shift to multi-cloud availability, reducing vendor lock-in risk for enterprise customers. OpenAI employs approximately 4,000 people and maintains its technical edge through massive compute investments, with model training costs reportedly exceeding $1 billion per frontier model.

What Leaders Should Know

The end of OpenAI's Azure exclusivity fundamentally changes enterprise AI procurement: OpenAI models are now available on both AWS Bedrock and Azure, giving organizations genuine multi-cloud flexibility for the first time. The anticipated IPO (targeting September 2026 at ~$1 trillion) will likely trigger fresh scrutiny of OpenAI's governance structure and its unusual nonprofit-parent model. For C-suite decision-makers, ChatGPT remains the default choice for enterprise AI, but the multi-cloud availability means organizations can now negotiate across providers. Leaders should also watch the GPT-5.5 Instant model, which became the new default in May 2026—its performance-per-cost ratio makes it the baseline for most enterprise use cases.