OpenAI Shelving Side Projects to Focus on Key Business

Fidji Simo, the artificial intelligence (AI) startup’s CEO of applications, previewed the company’s new strategy in a recent “all-hands” meeting with employees, the Wall Street Journal (WSJ) reported Monday (March 16).

“We cannot miss this moment because we are distracted by side quests,” Simo said, according to remarks seen by the WSJ. “We really have to nail productivity in general and particularly productivity on the business front.”  

As the report notes, OpenAI last year debuted a host of new products, such as its Sora video generator, the Atlas web browser, a new hardware device and eCommerce capabilities for its ChatGPT chatbot.

CEO Sam Altman has compared this strategy to “betting on a series of startups” inside OpenAI, the WSJ added, helping establish the company’s reputation as an AI pioneer. 

Now, however, the company is facing increased pressure from competing startup Anthropic, which has become the go-to AI provider for businesses following the success of its Claude Code and Cowork offerings. 

The popularity of these tools triggered a massive sell-off on Wall Street in early February. More than $800 billion in market value was erased from the enterprise technology sector when analysts pointed to the disruptive potential of new enterprise AI tools from firms like Anthropic aimed at automating processes such as contract reviews and legal briefings.

“Enterprise software has spent the past decade promising transformation while mostly delivering optimization,” PYMNTS wrote last month. “But artificial intelligence is now coming for the ‘mission critical’ workflows of businesses and their back offices. And that’s becoming situation critical for the enterprise software space.”

Simo told employees Anthropic’s success should be a “wake-up call” for the company, and that it had to recapture its lead among software developers and enterprise clients.

“We are very much acting as if it’s a code red,” Simo said, per the report. “I don’t think necessarily declaring codes for everything makes a ton of sense.”

Current and former workers told the WSJ that last year’s “do everything” approach would occasionally lead to a lack of focus, and that it was sometimes hard to grasp OpenAI’s strategy.

The report added that OpenAI continues to benefit from its dominance in the consumer AI space, and from the Pentagon’s recent decision to designate Anthropic a supply-chain risk, which has made some businesses hesitant to work with the company.

Anthropic is suing the U.S. government over its decision, while OpenAI’s partnership with the military has caused at least one high-profile defection.