The competition between two AI startups, creators of rival chatbots ChatGPT and Claude, is intensifying as both companies prepare for a critical showdown this year. Each must demonstrate its ability to achieve sustainable profitability with revenue exceeding costs.
The fierce rivalry between these AI developers and large corporations like Alphabet centers on capturing enterprise clients. These businesses are seeking to integrate AI tools to enhance workplace productivity. This battle is now expanding into multiple arenas, including the upcoming Super Bowl.
Anthropic will air two television commercials during Sunday's Super Bowl, which mock OpenAI's recent move to introduce digital advertisements on the free and lower-priced versions of ChatGPT. Anthropic's revenue model has primarily relied on selling Claude to enterprises, while OpenAI is attempting to monetize the hundreds of millions of consumers using the free ChatGPT service through advertising.
Anthropic's ads humorously highlight the risks of manipulative chatbots. They feature "real people" speaking in stiff, overly enthusiastic tones to build relationships with users before pivoting to product promotions. The commercials conclude with the on-screen message, "AI is about to have ads. But Claude won't," followed by the intro and lyrics from Dr. Dre's song "What's the Difference."
These advertisements directly target a vulnerability for the competitor. OpenAI CEO Sam Altman responded on social media, stating he found the ads "funny" but accused them of being dishonest, while subtly implying that his rival has a smaller customer base.
"Anthropic only sells its expensive product to rich people," Altman wrote on X. He also boasted that the number of people using the free ChatGPT in Texas alone exceeds the total number of Claude users across the entire United States.
The roots of this competition trace back to 2021 when a group of OpenAI executives departed the AI research lab to found Anthropic. They pledged a greater focus on the safety of superhuman-level artificial intelligence (AGI), a goal both San Francisco-based companies originally shared. This schism occurred before OpenAI's launch of ChatGPT in late 2022, an event that revealed the vast commercial potential of large language models capable of assisting with tasks like writing emails, homework, or computer code.
Competition escalated further this week as both companies announced product updates. OpenAI launched a new platform, Frontier, on Thursday, positioning it as an all-in-one enterprise solution to help businesses integrate various AI tools that work together, particularly AI agents that can autonomously perform tasks for users.
"We want to be the partner of choice for enterprise AI transformation. The revenue opportunity for a platform like this is limitless," OpenAI Chief Executive of Applied AI, Fidji Simo, told reporters this week.
Anthropic, earlier in the week, announced new features for its Cowork assistant designed to automate legal research and document drafting tasks.
"Both OpenAI and Anthropic are aggressively positioning themselves as platform companies," said Gartner analyst Arun Chandrasekaran. "The model is important, but the model is not the end game."
These startups face competition beyond each other. They also contend with Alphabet, which is not only a leading developer of powerful AI models like Gemini but also possesses cloud computing infrastructure supported by its traditional digital advertising revenue. Their relationships with Amazon.com and Microsoft are also complex: Amazon.com is Anthropic's primary cloud services provider, while Microsoft holds a 27% stake in OpenAI.
When enterprises adopt AI agents, they often turn first to cloud giants like Microsoft, Alphabet, and Amazon.com, which offer integrated, one-stop-shop services, according to Nancy Gohring, Senior Research Director at IDC. AI model providers like Anthropic and OpenAI "often play a secondary role."
However, a market opportunity remains. Currently, no single player can offer enterprises the comprehensive security and compliance guarantees urgently needed for large-scale deployment of AI agents.
"Adopting AI and agents inherently carries some risk," Gohring said.
Additionally, Elon Musk's newly consolidated AI unit under SpaceX and its Grok chatbot are not yet significant competitors for enterprise clients. Musk, a co-founder of OpenAI who is currently suing the company with a trial set for April, views the firm with animosity.
SpaceX, OpenAI, and Anthropic are among the world's most valuable private companies. Wall Street investors anticipate that one or all could pursue an initial public offering within the next year. However, unlike SpaceX, which is supported by its rocket business, or established tech giants like Amazon.com, Alphabet, and Microsoft, Anthropic and OpenAI must find sufficient revenue streams to cover the enormous costs of chips and data centers required to run their energy-intensive AI systems.
This does not mean Anthropic and OpenAI are unprofitable or lack product diversification. Although these private companies do not publicly disclose sales figures, both have stated that their current products, including paid subscription services for individual chatbot users, generate revenues in the hundreds of millions of dollars.
Nevertheless, the cost of the computational infrastructure needed to build these powerful AI models and handle millions of user requests daily is extremely high. OpenAI, in particular, has indicated it owes over $1 trillion in debt to investors, including Oracle, Microsoft, and NVIDIA. These investors are essentially prepaying computing costs in hopes of future returns.
For some investors, this wait may be justified.
"Profitability is important, but for investors still focused on scale, differentiation, and infrastructure leverage, it is not a near-term decision factor," said Forrester analyst Charlie Dai. "Both companies continue to incur massive losses, yet investors keep providing capital because the frontier model race is exceptionally capital-intensive."
OpenAI's newly appointed Chief Revenue Officer, Denise Dresser, told reporters this week that the company's top priority is "building the best enterprise platform for every industry, for every segment."
"Our core focus is not revenue, but the end outcome for the customer," she said, reflecting a sense of urgency among corporate CEOs who are seeking smoother pathways for AI implementation.
"There is a consensus in the market that AI is becoming a core operational advantage," Dresser stated. "They don't want to be on the wrong side of this transformation."
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