OpenAI launches GPT-5 with 'PhD-level' intelligence and aggressive pricing

OpenAI unveiled GPT-5 on Thursday, its most advanced artificial intelligence model yet, with CEO Sam Altman promising it delivers "PhD-level expert" capabilities across any field. The launch represents the company's biggest upgrade since ChatGPT debuted in November 2022 and now serves 700 million weekly users.

The new model will be available to both free and paid ChatGPT users immediately, marking the first time OpenAI has made its most powerful technology available without requiring a subscription. The company is also undercutting competitors with aggressive pricing for business customers, making GPT-5 significantly cheaper than rival models from Anthropic and matching Google's rates.

The model shows particular strength in coding, with OpenAI claiming it can create "beautiful and responsive websites, apps, and games with an eye for aesthetic sensibility in just one prompt." The company demonstrated GPT-5 building everything from typing games to drum simulators from single prompts, with improved understanding of design elements like spacing and typography.

Early reviews from business users and developers show promise for enterprise applications. Box CEO Aaron Levie posted on X that his company saw major improvements in extracting data from complex documents like contracts and legal files, with better accuracy and fewer errors than previous AI models.

Other early testers found GPT-5 excels at going beyond basic requests. Ethan Mollick, a Wharton professor who writes about AI and has advanced access, wrote in his Substack that the AI often anticipates what users need and delivers more comprehensive results. When he asked for a simple building game, GPT-5 created a fully functional 3D city builder with features he never requested.

However, some advanced users found the model more cautious than competitors. Kieran Klaassen, general manager at AI company Cora, said GPT-5 represents an improvement over existing models but "not a leap into the future," noting it works well for precise tasks but lacks the aggressive autonomous approach preferred by some programmers.

OpenAI also announced new productivity features that will launch next week, including integration with Gmail and Google Calendar for paid users, allowing ChatGPT to access schedules and emails to provide personalized assistance. The company added customizable interface colors and personality settings to tailor the AI's responses.

The launch caps a week of major AI developments that underscore the breakneck pace of innovation in the field. Earlier this week, rival Anthropic released Claude Opus 4.1, an updated version of its flagship model claiming improved coding and research capabilities. OpenAI also surprised the industry by launching GPT-oss, its first open-source AI model in over five years, allowing developers to run AI locally on personal computers.

The open-source release marks a strategic shift for OpenAI, which hadn't published model code in over five years. Altman called GPT-oss "the best and most usable open model in the world" and said he expects it to accelerate innovation across the field. Meta CEO Mark Zuckerberg has also been aggressively recruiting AI talent, reportedly offering packages worth more than a billion dollars to poach researchers from OpenAI and other competitors.

These developments come amid massive funding rounds fueling AI competition. OpenAI recently raised $8.3 billion at a $300 billion valuation, earlier this month. The company reported that its annual revenue has grown to $13 billion, up from $10 billion in June, with projections to exceed $20 billion by year-end.

Anthropic is reportedly raising up to $5 billion at a $170 billion valuation, while OpenAI's infrastructure partnership with SoftBank and Oracle involves $500 billion in planned investments over four years.

The launch reflects OpenAI's push to maintain its lead as AI development accelerates across the industry. The company's strategy of offering advanced capabilities for free while aggressively pricing its business services suggests it's prioritizing market dominance over immediate profits in what has become a winner-takes-all race for AI supremacy.

"We think you will love using GPT-5 much more than any previous AI," Altman said during the announcement. "It is useful, it is smart, it is fast, and it's intuitive."