OpenAI’s less-flashy rival might have a better business model

OpenAI recently inked hundreds of billions of dollars of deals to build data centers filled with chips it hopes will further its AI dominance. But one of its rivals—the Amazon -backed developer Anthropic—has a clearer path to making a sustainable business out of Al.

- Asa Fitch

Anthropic and OpenAI do similar things: They develop advanced AI models upon which chatbots, image generators and a host of other AI tools are based.

But they have approached the question of how to generate revenue—and, one would hope, profit—from AI in different ways.

Outside of OpenAI’s close partnership with Microsoft, which integrates OpenAI’s models into Microsoft's software products, OpenAI mostly caters to the mass market . Its user base is, in large part, replacing search-engine queries with bot conversations, which has proved immensely popular. ChatGPT had more than 800 million weekly users as of this month, according to the company, which has helped OpenAI reach an annual revenue run rate of around $1.3 billion, around 30% of which it says comes from businesses.

Anthropic has generated much less mass-market appeal. The company has said about 80% of its revenue comes from corporate customers. Last month it said it had some 300,000 of them.

That focus has helped put Anthropic ahead of OpenAI among business users. Its cutting-edge Claude language models have been praised for their aptitude in coding: A July report from Menlo Ventures—which has invested in Anthropic—estimated via a survey that Anthropic had a 42% market share for coding, compared with OpenAI’s 21%. Anthropic is also now ahead of OpenAI in market share for overarching corporate AI use, Menlo Ventures estimated, at 32% to OpenAI’s 25%.