AI Unpacked: AI Pivots, Big Bets, and Market Pressure
- Luke Gardner
- Dec 8, 2025
- 6 min read
Week 2: Dec. 1 - 5
AI Unpacked
Welcome to this week’s edition of AI Unpacked, a weekly blog that provides updates, insights, and easy-to-understand explanations on how artificial intelligence is shaping today’s financial landscape. This week’s report will cover OpenAI’s “code red”, Meta’s investment in AI wearables, Nvidia’s potentially dangerous margins, flying taxis, and more.
Panic! As the Deals-Go
On Monday, December 1, 2025, OpenAI CEO Sam Altman issued a company-wide “code red”, pausing most operations to concentrate fully on improving ChatGPT’s speed, reliability, and overall performance. The move signals a rare moment of urgency inside the company, and a turning point in the AI race.
Rising Pressure From Google and Anthropic
Altman’s move comes amid rising competitive pressure. Google’s Gemini 3 has delivered strong performances across key industry benchmarks, significantly narrowing the gap with OpenAI’s models. At the same time, Anthropic, known for its safety-focused approach and the rapidly growing Claude platform, continues to gain enterprise traction with reliable and well-aligned systems. As rivals accelerate, OpenAI faces growing pressure to prove it can sustain leadership across both consumer and enterprise AI markets.
Refocusing on Product: Ads, Personalization, and Pulse
As part of its code-red action plan, OpenAI is doubling down on product features designed to boost user retention and monetization. Central to this effort is Pulse, ChatGPT’s new proactive AI assistant, alongside an expanded push into advertising.
Pulse is a personalized feature that transforms ChatGPT from a reactive chatbot into a hands-on digital assistant. It proactively delivers daily digests and timely updates, suggests tasks or reminders before users ask, and pulls relevant insights from connected accounts such as Gmail and Calendar. By anticipating needs rather than responding to prompts, Pulse aims to embed ChatGPT more deeply into users’ everyday workflows.
Alongside personalization, OpenAI is preparing to scale advertising within ChatGPT, signaling a strategic move toward greater revenue diversification. Together, Pulse and advertising represent a shift toward making ChatGPT not just smarter, but more indispensable and commercially sustainable.
Financial Pressure and No IPO in Sight
Despite its rapid growth, OpenAI operates under a structure that often confuses outsiders. The company is governed by a nonprofit parent, but most of its revenue generation happens through a capped-profit subsidiary* that is transitioning toward a fully for-profit model. This arm drives OpenAI’s revenue by offering products such as ChatGPT Plus and Enterprise, forging key commercial partnerships, and raising billions in funding (most prominently from Microsoft).
In November 2025, CFO Sarah Friar pushed back on ongoing IPO speculation, stating that OpenAI has no immediate plans to go public. As a result, the company will continue to depend on private funding to sustain the enormous costs of AI research, computing infrastructure, and product expansion.
Why OpenAI’s Next Moves Matter
OpenAI’s future now hinges on two critical factors: Sam Altman’s strategic decisions in the coming months and how effectively the company’s for-profit arm can generate revenue to support its nonprofit mission.
That hybrid structure (nonprofit vision paired with for-profit execution) creates a delicate balancing act. The nonprofit sets the direction, while the commercial subsidiary funds the work. Historically, excess profits flowed back to the nonprofit, but as competition intensifies and costs surge, that equilibrium is under growing pressure.
At the same time, OpenAI must continue scaling its technology without slowing innovation. Model training has become increasingly complex and expensive, prompting the company to acquire Neptune, a startup whose tools OpenAI already relied on to monitor and optimize training runs. By bringing this capability in-house, OpenAI has already begun its initiative toward a more efficient model.
Meta Shifts Strategy With Bold New Spending Plan
After a rough year that saw more than $77 billion in losses, Mark Zuckerberg has announced a major strategic pivot for Meta Platforms: the company is stepping back from its Metaverse ambitions and shifting its focus toward AI-powered wearables, including smart glasses, watches, and other next-gen devices. The move comes as part of a newly restructured 2026 budgeting plan aimed at recalibrating Meta’s priorities.
Earlier this year, Zuckerberg described 2025 as a “pivotal” year for the Metaverse. But as public interest in virtual worlds cooled and excitement around AI wearables surged, Meta found itself needing to scale back its Metaverse operations. The new direction won’t come cheap; Meta expects “aggressive” growth in capital expenditures as it races to stay competitive in the AI hardware space.
As a clear sign of its renewed focus, Meta announced on Friday, December 5, 2025, that it has acquired Limitless, an emerging AI wearable company best known for its smart pendant capable of recording, summarizing, and transcribing real-world conversations. With AI-powered Ray-Bans already in its lineup and the Limitless pendant now in its portfolio, Meta seems intent on broadening the ways people capture and interact with information.
The acquisition has sparked speculation about what unconventional recording or AI-enhanced wearable technology Meta might unveil next.
Amazon Enters the AI Chip Race With Trainium3
Amazon has begun producing its very own AI semiconductor chips known as its Trainium3 processors. This launch aims to diversify the AI chip race, diluting attention from Nvidia, and presenting a stronger foundation for software computing. This positions Amazon as the second major company after Google, with its TPU chips, to develop its own semiconductor hardware, increasing competitive pressure on Nvidia.
Surprisingly, many of Amazon’s biggest chip investors are also in business with Nvidia. Anthropic is using Amazon’s chips to power its own AI model, Claude, highlighting how even Nvidia’s partners are actively diversifying their computing stacks.
Nvidia’s Extremely High Margins Are… a Risk?
Nvidia finds itself in a rare and paradoxical position: its margins may be too strong. As the undisputed leader in AI computing, the company is posting gross margins near 70%, far outpacing competitors that operate closer to the 50% range. In the short term, that dominance has been a massive win for Nvidia, but in the long run, it may invite more competition than comfort.
Such elevated margins act as a beacon for rivals. Companies like Google, Amazon, and AMD see Nvidia’s pricing power as an opportunity rather than a deterrent, fueling aggressive investment into alternative AI hardware. Google has already deployed its own TPUs internally, and Amazon’s Trainium3 chips are gaining traction inside AWS. Even AMD is accelerating its roadmap in an attempt to capture spillover demand.
The risk for Nvidia isn’t an immediate loss of leadership, but a gradual erosion of pricing power. As cloud giants build or subsidize their own chips, they reduce dependence on Nvidia while applying downward pressure on margins across the market. What makes Nvidia extraordinarily profitable today is precisely what incentivizes the rest of Big Tech to challenge its position tomorrow.
Fast AI Furious
Waymo, an American autonomous driving company, is seeing its self-driving cars begin to mimic human driving behavior, though not necessarily in a positive way. Once known for their ultra-cautious, almost frustratingly slow driving style, Waymo vehicles are now being reported making illegal U-turns, aggressive lane changes, and accelerating hard through green lights.
The shift highlights a growing challenge for Waymo: finding the right balance between being too passive and too aggressive on public roads. As the vehicles become less hesitant, they also appear to be taking on riskier behaviors that raise new safety concerns. Waymo, which is owned by Alphabet, Google’s parent company, now faces renewed scrutiny not just from the public, but from regulators as well.
Complicating matters further is the question of accountability. With no human behind the wheel, police can’t issue citations in the traditional way, creating a legal gray area when autonomous vehicles break traffic laws.
This marks a notable contrast from Waymo’s earlier safety claims. The company previously touted data showing its vehicles were involved in 91% fewer crashes than human drivers. But recent incidents have begun to challenge that narrative. Most notably, Waymo issued a recall after a reported case in which one of its vehicles drove past a stopped school bus, a serious violation with potentially dangerous consequences.
As Waymo continues refining its driving models, the real test may be whether autonomy can replicate not just human behavior, but human judgment, without inheriting human flaws along the way.
Flying Taxis in Miami
Real estate billionaire Stephen Ross believes he has a high-tech answer to Miami’s growing traffic congestion. The concept relies on electrically powered vertical takeoff and landing aircraft, known as eVTOLs, which would transport passengers between destinations such as Miami, Fort Lauderdale, and Palm Beach, with fares estimated at around $200 for a 30-minute trip.
To bring the concept to life, Ross has partnered with Archer Aviation, helping to develop a network of charging stations that will power the electric air taxis. If the rollout stays on track, South Florida could see these flying taxis take to the skies as early as next year, offering a bold new alternative to gridlocked roads.
Glossary (*):
Subsidiary - a company that is fully or partially owned and controlled by a parent or holding company
Wow!!! Thanks for getting me updated!! Air taxis... wow, but it's about time!! Exciting!!