OpenAI’s “12 Days of Shipmas,” which ended Friday, brought a sense of lightness to the end of the year. The marketing blitz served as a way for the high-profile and controversial AI startup to show that it can release an extensive list of new features and tools and have fun doing it.

But when the calendar changes, the company faces serious challenges. Of particular note is co-founder Elon Musk, who now runs rival startup xAI and is in the middle of a heated legal battle with OpenAI CEO Sam Altman that could have major implications for the company’s future.

The threat Musk poses to OpenAI is all the more significant considering the magnitude of influence the world’s richest person will assume as part of the new Trump administration.

In recent months, Musk has sued Microsoft-supported OpenAI and asked a court to prevent the company from converting from a non-profit organization to a for-profit company. In posts on

Much of the pressure on OpenAI has to do with its $157 billion valuation, which the company has achieved in the two years since the launch of its viral chatbot ChatGPT and the start of the generative AI boom. OpenAI closed its latest $6.6 billion round in October and was preparing to compete aggressively with xAI and Microsoft. Google, Amazon and Anthropic in a market expected to exceed $1 trillion in sales within a decade.

In addition to the drama surrounding OpenAI and Altman, the Shipmas shtick served as a way for the company to shift focus on its technology and generate excitement for its products.

The most significant release of the 12 days was the public launch of Sora, OpenAI’s much-lauded video generation tool, on December 9th.

Using Sora, which OpenAI first announced in February, is relatively simple: a user enters a desired scene and the engine returns a high-resolution video clip. Sora can also create clips inspired by still images and expand existing videos or fill in missing frames. While other AI video tools are available, Sora was by far the most anticipated due to the power of OpenAI’s large language models.

On Wednesday, OpenAI offered users a new way to talk to its viral chatbot: 1-800-CHATGPT. People in the US can dial the number (1-800-242-8478) for 15 minutes free per month, OpenAI said, and WhatsApp users worldwide can message the chatbot at the same number.

Other announcements included the full release of OpenAI’s new o1 AI model with a focus on reasoning, a demo of video and screen sharing options in ChatGPT’s advanced voice mode, the ability to organize work into “projects” within ChatGPT, a broader rollout of ChatGPT search and new developer tools. The company also used the marketing push to talk about its integration with Apple for iPhone, iPad and macOS.

OpenAI concluded its 12-day series of releases on Friday with the announcement of its latest Frontier model, o3, as well as o3 mini. In a livestream, Altman said the company would not publicly unveil the models on Friday but would immediately make them available for public safety testing.

The company launched o1 in September, and by moving straight to o3, Altman said he was continuing “the grand tradition that OpenAI is really, really bad at names.”

The campaign was celebrated in some corners for the company’s ability to make a strong year-end push, and criticized in others as being significantly more hype than substance. Whatever the case, OpenAI is aware that competition is heating up – and quickly.

One of its main competitors, Amazon-backed Anthropic, was founded by early OpenAI researchers and is attracting top talent. In May, OpenAI security lead Jan Leike left OpenAI to join Anthropic, and in August OpenAI co-founder John Schulman announced he was leaving the company to join the rival startup. They were part of a wave of departures that culminated in September when three top politicians, most notably technology chief Mira Murati, announced their resignations on the same day.

A recent report from Anthropic investor Menlo Ventures found that OpenAI lost market share in enterprise AI this year, falling from 50% to 34%, while Anthropic doubled its market share from 12% to 24%. The results come from a survey of 600 enterprise IT decision-makers from companies with 50 or more employees, the report said.

One key area where the two companies appear to be competing is defense, as AI companies roll back previous bans on military use of their products and forge partnerships with major industry players and the U.S. Department of Defense.

The day before OpenAI’s Shipmas event began, the company announced a partnership with Anduril, allowing the defense technology provider to deploy advanced AI systems for “national security missions.” Last month: Anthropic and defense software provider Palantir announced a partnership with Amazon Web Services to provide “U.S. intelligence and defense agencies access” to Anthropic’s AI systems.

However, the main battle still lies with users. Altman said publicly earlier this month that OpenAI now has 300 million weekly active users. The company is reportedly targeting $1 billion next year.

This level of growth will likely require a costly marketing push and accelerated feature rollouts as the company advances its two-year timeline to transition from a nonprofit to a fully for-profit entity. Earlier this month, OpenAI announced it had hired its first chief marketing officer, nabbing Kate Rouch from crypto company Coinbase.

Added to this is the increasingly complicated relationship with Microsoft, OpenAI’s main investor and main cloud provider. While both companies continue to emphasize the value of their close partnership, there are increasing signs of tension.

After Altman’s abrupt but short-lived exit from OpenAI late last year, reports emerged that Microsoft CEO Satya Nadella had not been informed beforehand. After Altman was quickly reinstated, OpenAI gave Microsoft a non-voting seat on the board. Microsoft exited the position in July.

In March, Nadella brought in Mustafa Suleyman, who co-founded AI research company DeepMind and sold it to Google in 2014. Suleyman later co-founded and led the startup Inflection AI and was effectively acquired by Microsoft.

In its annual report released in July, Microsoft named OpenAI as a competitor, adding the company to a list that has for years included megacap rivals Amazon, Apple, Google and Meta. And in October, OpenAI introduced a search feature in ChatGPT that better positions it to compete with search engines like Google and Microsoft’s Bing.

But the hottest issue in the new year may concern Musk, who has been a fixture at President-elect Donald Trump’s Mar-a-Lago resort in Florida since the election.

Trump has said in the past that he would repeal President Joe Biden’s AI executive order issued in October 2023, which established new safety assessments, guidance on equity and civil rights, and research into AI’s impact on the labor market.

Musk is expected to co-chair the Trump administration’s Department of Government Efficiency (DOGE), which will serve as an advisory office, alongside former Republican presidential candidate Vivek Ramaswamy. Musk, who is also running, could take on his new role Tesla and SpaceX and owns the social media company X, influencing federal agencies’ budgets, staffing, and regulations in ways that benefit its companies.

“I’m starting to feel like @DOGE has real potential,” Musk posted on X last month.

OpenAI had no comment for the story and Musk did not respond to a request for comment.

REGARD: OpenAI starts with “Shipmas”