OpenAI, a prominent artificial intelligence research company, is navigating significant internal and technical challenges following the rapid deprecation of its GPT-4.5 model and a strategic shift in the development of its upcoming GPT-5. The company is also engaged in complex negotiations with its key investor, Microsoft, while addressing a series of high-profile researcher departures.
Internally codenamed "Orion," GPT-4.5 was released in February 2025 but was quickly phased out from API access by July 14, 2025, due to disappointing performance and high operational costs. According to the provided tweet, its performance showed "no major leaps forward compared to GPT-4o," primarily attributed to a "dwindling supply of high-quality web data for pretraining" and issues with scaling optimizations that "did not scale."
In contrast, OpenAI's strategy for GPT-5 emphasizes practical improvements rather than "quantum leaps," focusing on enhanced coding and mathematical capabilities, alongside superior agent functionalities for handling complex tasks like "refunds in support." The tweet notes GPT-5 aims for "incremental but commercially valuable improvement – not a leap like GPT-3 → GPT-4."
A key technological advancement for GPT-5 is the integration of a "Universal Verifier," which automatically checks answers during reinforcement learning to ensure higher quality outputs. This system is based on experiences from the "o series" models, which were strong for reasoning but "lost performance when chatting," aiming to deliver "high-quality answers without massive increases in compute."
The company faces considerable internal dynamics, including a notable exodus of researchers to competitors like Meta and Anthropic. The tweet highlights "conflicts between research and business" and "visible friction between Mark Chen (head of research) and VP Jerry Tworek on Slack," stemming from technical hurdles such as performance drops in chat models and data scarcity.
Adding to the complexities, OpenAI is engaged in strategic negotiations concerning its exclusive rights agreement with Microsoft, which extends until 2030 and includes a planned "33% stake in the for-profit structure." The tweet indicates "strategic negotiations are underway, while OpenAI is preparing for a possible IPO," reflecting the intricate balance between its research ambitions and commercial interests.