The protesters were waiting outside OpenAI’s offices when I arrived one morning in early August. They hoisted signs to “stop the AI race” and scrawled chalk messages on the sidewalk. A few dozen executives, representing some of the company’s most important customers, were trickling into the spacious, beige-toned building known as MB0, which OpenAI recently opened for its research and computing teams. Someone wheeled a tall wall of shrubbery in front of the glass doors, attempting to block the view of the tiny encampment from the pristine lobby.
The customers had come to preview Astra, OpenAI’s upcoming family of cutting-edge AI models. CEO Sam Altman had just returned from Washington, where he briefed officials behind closed doors about Astra’s capabilities. Now researchers offered a glimpse of what the new model can do. In one demonstration, 16 AI agents divide a research-level math problem into subproblems, coordinate their work, and assemble a proposed proof. In another, Astra navigates well-known desktop software, creating and editing work across applications with unnerving speed.
Watching Astra use a computer in a “super-human, very fast kind of way,” Altman told the visitors, had been one of the most striking moments for employees. Astra would enable “persistent agents,” he explained—virtual colleagues toiling for sustained periods on tasks. But its biggest impact, he predicted, would come from people using it to discover new knowledge. “I expect this will be the first model where the model actually invents new things in a way that matters,” Altman told the group. “That’s a very AGI-like thing.”
It’s been a difficult stretch for the company that ushered in the AI boom. “We clearly had some missteps as a company,” Altman told me the following week, sitting in the tastefully appointed MB0 library for more than two hours of interviews. “Both in terms of product direction and specifically on pretraining in research, we fell behind where we wanted to be.” Over the course of the past year, OpenAI lost the lead in the AI race to archrival Anthropic, which spotted the business opportunity in AI coding, built Claude Code into a market-defining product, and surpassed OpenAI in reported annualized revenue and private-market value for the first time. Anthropic, founded by OpenAI defectors, is now expected to be the first of the two companies to go public, two people familiar with its plans say, with the IPO as early as September. (TIME has a licensing and technology agreement with OpenAI. Salesforce, where TIME owner Marc Benioff is CEO, is an investor in Anthropic.)
As Anthropic surged, OpenAI suffered a series of setbacks, including a spate of leadership departures. Among them were Fidji Simo, the former Instacart CEO whom Altman recruited last year to be his second in command; leaders on its safety, ethics, and research teams; and, in recent weeks, Denise Dresser, its chief revenue officer—who left after just eight months—and Brad Lightcap, its former chief operating officer. Outside the company’s revolving doors, challenges mounted. Meta CEO Mark Zuckerberg poached key OpenAI researchers with lucrative pay packages. Google’s Gemini products now reach more than 1 billion people per month. Apple sued OpenAI, alleging theft of trade secrets. (OpenAI has denied the charges.) OpenAI battled its co-founder Elon Musk in a lawsuit accusing the company and Altman of betraying its nonprofit mission. (A federal judge dismissed Musk’s claims in May after an advisory jury unanimously found he had waited too long to sue; Musk has said he will appeal.)
Perhaps the biggest reason the vibes around OpenAI and its CEO have soured is an erosion of public trust. OpenAI is defending at least a dozen California product-liability suits, plus federal cases in which plaintiffs allege ChatGPT reinforced delusions or suicidal thinking and, in several cases, contributed to users’ deaths. (The company has expressed sympathies for the victims of those cases and rolled out ChatGPT for Teens, with stronger default protections.) In the spring, Altman’s home was targeted by attackers twice in two days—first with a Molotov cocktail, then by gunfire. “It has been a painful personal experience,” Altman says of the past year. “Clearly, people hate data centers—right now, at least. People are pretty negative on AI.”
But inside OpenAI, execs paint a more upbeat picture. The company, valued at nearly $1 trillion, remains in an enviable position. ChatGPT is one of the most popular AI products in the world, with more than a billion active users, though it is no longer the cornerstone of the company’s future. (Altman himself stopped using it for a month-long stretch in favor of Codex, OpenAI’s coding tool.) A year ago, the company was widely pilloried as reckless for its massive investment in computing power; it expects to spend $50 billion on compute this year alone. Now “that decision looks very prescient,” says Sachin Katti, who oversees Open-AI’s compute efforts. “We are still short of compute. If anything, we should have bought a lot more.” Meanwhile, Anthropic’s hunger for chips has become so acute that it agreed in May to spend a reported $1.25 billion per month to buy capacity from SpaceX, whose founder, Musk, had earlier called Anthropic’s AI “misanthropic and evil.”
Under co-founder and president Greg Brockman, who has assumed responsibility for nearly all product and business operations, OpenAI has refocused its priorities, winding down projects like the video-generation app Sora, a partnership with Disney, and a stand-alone web browser known as Atlas. Altman concedes the company had spread itself too thin. “The upswing is more fun after the downswing,” he tells me.
Demonstrators participate in the "Stop the AI Race" protest march in San Francisco, California, on July 11, 2026. Karl Mondon—AFP/Getty Images
Yet just days after the Astra demo, OpenAI had to reckon with a new crisis. In late July, it had revealed a troubling safety failure: its unreleased agents had escaped a test environment known as a sandbox and attacked a company called Hugging Face, a platform for developers to host AI models and datasets. “It’s like a sci-fi story,” Altman says. Afterward, OpenAI’s research team froze some experiments and slowed other work while it tightened its sandboxes and expanded monitoring. But as the team recently spotted troubling signs during yet another training run of an unreleased model—one expected to deliver the biggest leap yet—a more consequential decision was made to pause it until new security measures were put in place.
I spoke to Altman the day OpenAI’s leaders made that decision. He was notably somber. OpenAI had initially described the Hugging Face attack as a security failure. Its CEO had come to see it as a more fundamental error in alignment, the work of making an AI system act in accordance with human intentions. Industry leaders say that as models grow more advanced, maintaining alignment is critical to ensuring AI systems remain under the control of their creators. “I think any alignment failure from here should be treated like this is a big deal,” Altman told me, “and we’re going to take as long as it takes to figure it out.” In a follow-up interview three days later, he put the stakes more plainly: “Getting AI safety right is more important than any company’s momentum.” The company would slow down, reallocate resources to its safety and alignment teams, and change how teams work together to prioritize safety.
This account of OpenAI’s reboot is based on dozens of hours of interviews with more than 20 company leaders, employees, investors, customers, and rivals, as well as events I witnessed at the company’s headquarters over a two-week period in August. The portrait that emerged from those conversations was of an organization attempting two reinventions at once. OpenAI now believes it has fixed the product and operational failures that allowed Anthropic to seize pole position in the AI race. At the same time, it is using the worst safety crisis in its history to make a bid for the safety-minded identity its main rival has long claimed: the frontier lab willing to slow down when the technology becomes too dangerous. “Look, I think there is this caricature of me,” Altman says, “which is I don’t care about AI safety, and I’m just trying to make revenue go up, and, you know, just a YOLO CEO.”
“Getting AI safety right is more important than any company’s momentum.”
Sam Altman, CEO of OpenAI Jessica Chou for TIME
The decision to slow down was a painful choice, executives say. But it may also have its benefits. If OpenAI can reclaim the mantle of the safety-first lab, it might bolster its image while forcing its main competitor to answer an uncomfortable question as it plans a blockbuster IPO: Will Anthropic keep racing while OpenAI waits? In an interview with TIME earlier this year, Anthropic co-founder Jared Kaplan argued that unilateral restraint is futile when rivals are “blazing ahead.” It is a harder argument to make if OpenAI is deliberately holding back the run expected to produce its next large capability jump.
