The long-running rivalry between OpenAI and Anthropic has turned into a race that affects not only the speed at which new AI products are launched but also the companies' IPO timelines.
According to the report, OpenAI learned in late 2022 that Anthropic was working on an AI-powered chatbot. CEO Sam Altman then instructed employees to accelerate a competing product. ChatGPT was launched shortly after, a move that triggered a massive global transformation in the AI field.
Anthropic made the first IPO move
The competition has now shifted to IPO plans. The report assesses that the first to go public could shape investor perception and strengthen its position as the leading AI company.
Until May, many advisors expected OpenAI to make the first move toward an IPO, with the company telling some investors it was planning for a timeline starting in September. However, Anthropic announced on June 1 that it had filed a confidential application with US regulators, pulling the race forward.
The report noted that the tug-of-war between OpenAI and Anthropic is also being felt on Wall Street. Because the two major rivals are seeking capital at the same time, they have been forced to work with the same banks, and some advisors have set up walls between teams to prevent information leaks.
Reuters previously reported that OpenAI was considering going public at a valuation of around $1 trillion. The report included the assessment that an IPO of this size could set a precedent for how investors value companies.
Revenue recognition methods also a point of contention
The rivalry between the two companies has also revealed differing approaches to how revenue is presented. According to the report, OpenAI has told investors and employees that the accounting method preferred by Anthropic inflates revenue by billions of dollars.
In April, OpenAI's revenue director Denise Dresser reportedly told employees in an internal memo that they viewed Anthropic's financial figures as inflated. OpenAI argues that its own model discloses net revenue after deducting payments made to business partners.
Anthropic, however, told Reuters that it follows established accounting practices and recognizes gross revenue because it is the "principal" in the transaction. The company said it views cloud partners as a distribution channel.
The report also relayed that Dresser's internal communications aimed to reassure OpenAI employees who were losing morale in the face of Anthropic's rapid growth. One analyst said that Anthropic completing the first IPO would give it the opportunity to set the agenda for financial reporting of advanced AI models.
Timetable debate also erupted inside OpenAI
The rivalry has also reportedly created tension within OpenAI at times. According to the report, Sam Altman argued with finance chief Sarah Friar over whether the company could meet the obligations required under a short-term IPO timeline.
Altman was said to have stated that the process needed to be completed or that different bankers and lawyers capable of doing so had to be found. Friar later reportedly told advisors that management was aligned on the timing.
After Anthropic's filing, Altman told CNBC in an interview that he did not want to rush OpenAI's public debut.
The rivalry's roots lie in a safety approach
The clash between the two companies dates back to late 2020. The report recalled that Dario Amodei, then serving as vice president of research at OpenAI, left with several others to found Anthropic, a company that promised a safety-first approach.
This departure was seen by many OpenAI employees as a rebuke of Altman's approach. The report also noted that Anthropic trained its first Claude model in early 2022 but did not release it publicly in order to complete safety research.
Similar work was also underway at OpenAI, with some teams reportedly working on a "super assistant" powered by the advanced models of the time. Another internal team was developing a chat interface, and the report stated that even announcing the tool alongside GPT-4 in March 2023 was considered as an option.
As rumors about Anthropic's project intensified in mid-November, Altman instructed employees to prepare the chatbot as soon as possible, the report said. Thus, the race between the two companies became a driving force shaping not only product launches but also the future of AI.
