Will GPT-5 let OpenAI break away from the pack?

Welcome to Eye on AI! In this edition...OpenAI releases GPT-5 and strikes a $1 government deal. AI homework helpers duke it out. Zoox gets a special exemption.

One of the defining truths about the world of generative AI is that even when you’re on top, the lead doesn’t last for long.

And so, the two key questions coming out of OpenAI’s long-awaited launch of GPT-5 today are whether the new LLM can help the company reclaim the mantle of undisputed AI leader—and if so, how long can OpenAI keep the lead?

OpenAI says GPT-5 delivers “more accurate answers than any previous reasoning model,” and is “much smarter across the board,” reflected by strong performance on academic and human-evaluated benchmarks. Its research blog boasts of new state-of-the-art performance across math, coding, and health questions, and found that GPT-5 outperformed other OpenAI models across tasks spanning over 40 occupations, including law, logistics, sales, and engineering. 

“GPT-5 really feels like talking to a PhD level expert in any topic,” OpenAI CEO Sam Altman told journalists in a pre-briefing on Wednesday. “Something like GPT-5 would be pretty much unimaginable in any other time in history.” 

Altman described GPT-5 as a “significant step” along the path to artificial general intelligence (AGI), which, according to OpenAI’s mission statement, is defined as “highly autonomous systems that outperform humans at most economically valuable work.” 

It’s unclear whether this combination of speed, power and features will be enough, however. Some two years in the making (GPT-4 was launched in March 2023), GPT-5’s launch has taken longer than many industry insiders expected, as OpenAI has adjusted its approach in response to industry changes. And while ChatGPT now boasts an impressive 700 million weekly users, OpenAI has faced growing pressure over the past year as rivals poach its talent and race ahead on emerging AI techniques like long-context reasoning and autonomous tool use. In addition to Big Tech competitors like Meta and Google, there’s a wave of startups founded by OpenAI’s own former researchers, including Anthropic, Thinking Machines, and Safe Superintelligence. And of course, there’s the new crop of powerful Chinese models, like DeepSeek, vying for global influence.

Whether GPT-5 propels OpenAI back to the top of the AI hill will become clear in the days and weeks ahead, as researchers put the model through its paces, testing it against the likes of other elite models, including Anthropic’s latest Claude model and Google’s Gemini. 

OpenAI pushes to stay in the lead

With GPT-5 now finally out, OpenAI CEO Sam Altman acknowledged that staying at the frontier means one thing: relentless scaling. 

In AI, scaling refers to the idea that models get more powerful as you increase the amount of data, computing power, and model components used during training. It’s the underlying principle that drove progress from GPT-2 to GPT-3 to GPT-4—and now GPT-5. The catch is that each leap requires exponentially more investment, particularly in AI infrastructure—for OpenAI, that includes its Stargate Project, a joint venture it announced in January with Softbank, Oracle and investment firm MGX with a goal to to invest up to $500 billion by 2029 in AI-specific data centers across the U.S.

When asked whether scaling laws still hold, Altman said they “absolutely” do. He pointed to better models, smarter architectures, higher-quality data, and significantly more computing power as the path to “order-of-magnitude” improvements still ahead.

But that kind of progress comes at a cost. “It’s going to take an eyewatering amount of compute,” he admitted. “But we intend to continue doing it.”

That of course, requires massive amount of money and partnerships.

On the bright side, OpenAI has roughly doubled its revenue in the first seven months of 2025, hitting an annualized run rate of $12 billion—up from about $6 billion at the start of the year, according to a recent report by The Information. That translates to $1 billion in monthly revenue, fueled by surging demand for its ChatGPT products across both consumer and enterprise markets. Weekly active users for ChatGPT have jumped to around 700 million, up from 500 million across all OpenAI products as of late March. And earlier this week OpenAI released a free, open-source model—an unusual move for a company often criticized for its closed approach over the past half-decade—suggesting confidence that its premium offering, which is now GPT-5, will continue to dominate.

But there are some big challenges ahead, however. For one thing, the partnership between Microsoft and OpenAI—that began with a $1 billion investment in 2019—is entering a more fraught and complex phase. While Microsoft has invested more than $13 billion and retains exclusive rights to OpenAI’s models through Azure, tensions have emerged over revenue sharing, AGI control clauses, and overlapping product strategies. And the Stargate project is reliant on partnerships with companies like SoftBank, whose investment stipulations are tied to OpenAI’s still unresolved efforts to overhaul its corporate structure.

There’s much more to say about GPT-5. Journalists received the full set of materials from OpenAI, including a research blog, system card, and safety card, a mere 90 minutes before releasing the model, so I still have much more to go through. Stay tuned for more!

Also: In less than a month, I will be headed to Park City, Utah, to participate in our annual Brainstorm Tech conference at the Montage Deer Valley! Space is limited, so if you’re interested in joining, register here. I highly recommend: There’s a fantastic lineup of speakers, including Ashley Kramer, chief revenue officer of OpenAI; John Furner, president and CEO of Walmart U.S.; Tony Xu, founder and CEO of DoorDash; and many, many more!

With that, here’s the rest of the AI news.

Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman

This story was originally featured on Fortune.com