GPT-5 Launch Faces Challenges as Meta Restructures AI Efforts

Published Date : 22/08/2025 

The launch of OpenAI's GPT-5 has been met with user dissatisfaction, raising questions about the future of AI development and profitability. Meanwhile, Meta's restructuring could provide OpenAI with a window to regain its footing. 

The launch of GPT-5 was meant to herald a new era for OpenAI. After introducing GPT-4 two years prior, the company was finally going to move forward from iterative releases based on GPT-4, and unleash a benchmark-topping next-generation model. There was only one problem. Users didn't like it.

While OpenAI CEO Sam Altman hoped for a necessary iterative step toward the goal of Artificial General Intelligence (AGI), user feedback claimed that the new model lacked elements that made its previous models so popular. Soon after, OpenAI brought back older models for users willing to pay for them.

AI models are becoming more difficult to develop. GPT-5 was supposed to be as game-changing as GPT-4, if not more so. But it wasn't anything close to that. This raises the question: Is the AI industry reaching a plateau? The teams behind AI model development can't feed more data into their models to improve their capabilities anymore. Now, it's about tweaking or trying something new, and it doesn't feel like any of the big AI players have quite figured out what that is yet.

OpenAI could try hiring more people with new ideas, but Meta has been way ahead of the game. Altman accused Meta of offering huge, hundred-million-dollar signing bonuses to some of its staff earlier this year. As a result, several high-profile OpenAI staff members have been successfully poached by Meta, including lead OpenAI engineer Shengjia Zhao.

Despite Meta's push for AI talent, the team is undergoing restructuring, with staff being reportedly split across several divisions, with recruitment frozen for an undetermined amount of time. That may give OpenAI a window to pick up any new hot AI talent, without Meta throwing the big checks around.

One thing is clear: the path that large AI businesses are undertaking to race toward AGI is taking its toll. As many AI models now pivot toward Agentic AI and Thinking models, the cost to compute each query will inevitably get higher, as more complex tasks require more tokens. More tokens mean higher computational costs, which makes running AI businesses more expensive.

Despite these recent headwinds, the AI train shows few signs of stopping, but new data shows the technology isn't making money for the organizations that are using it. This week, a report from MIT suggested that as few as 5% of organizations saw an impact on P&L after adopting AI tools. As a result, AI-adjacent tech stocks fell, as faith in the profitability of AI was shaken, stoking fears of an AI bubble. OpenAI has yet to turn a profit, despite its annual recurring revenue predicted to hit $20 billion this year. But CEO Sam Altman is happy to run the company at a loss and prioritize growth, he told CNBC. This suggests that OpenAI hasn't found the killer app for AI, which would prove that the new technology could indeed be profitable. Whether or not that killer app ends up being AGI remains to be seen.

Altman himself has acknowledged that the AI industry may be a bubble, though he stopped short of suggesting OpenAI was a part of that assessment, hinting that there was still a viable business within it. 

Frequently Asked Questions (FAQS): 

Q: What is GPT-5?

A: GPT-5 is the latest version of the language model developed by OpenAI. It was launched as a more advanced and improved version of GPT-4 but faced significant user dissatisfaction.

Q: Why did users dislike GPT-5?

A: Users claimed that GPT-5 lacked elements that made previous models popular, such as accuracy and specific capabilities. This led to OpenAI bringing back older models for paying users.

Q: What is the current state of AI model development?

A: The development of AI models is becoming more challenging. Teams can no longer improve models by simply feeding them more data and are now focusing on tweaking or trying new approaches.

Q: How is Meta restructuring its AI division?

A: Meta is undergoing a restructuring of its AI division, with staff being split across several divisions and a freeze on recruitment. This could provide OpenAI with an opportunity to attract new talent.

Q: What is the impact of AI on business profitability?

A: According to a report from MIT, only 5% of organizations have seen a measurable impact on their P&L after adopting AI tools. This has led to concerns about an AI bubble and the profitability of AI technology. 

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