The ambitious development of GPT-5, code-named Orion, by Microsoft-backed (MSFT) artificial intelligence leader OpenAI, is reportedly facing delays and cost challenges, according to The Wall Street Journal. After 18 months of work and at least two large-scale training runs, the model shows improvements over its predecessors but hasn’t advanced enough to justify its steep operational expenses.
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OpenAI is exploring new data strategies, including using synthetic data and hiring specialists to create fresh datasets, as it aims to deliver a breakthrough that rivals models like Google’s Gemini.
The Drawbacks of Efficient AI
Meanwhile, the broader AI industry is grappling with the limitations of quantization, a key efficiency technique that reduces the computational burden of large models by lowering their precision. Research from leading institutions — Harvard, Stanford, MIT, Databricks, and Carnegie Mellon — suggests that heavily quantizing models trained on vast datasets can lower their performance and potentially undermine the scalability strategy favored by many companies.
Despite the diminishing returns from scaling, major labs continue to push larger datasets and models as they remain reluctant to shift away from current methods. These challenges come at a time when the industry faces rising pressure to balance innovation with cost-efficiency. It is clear that the current methods need to change eventually if companies want to create models that can be relied upon to provide accurate information.
Is MSFT Stock a Buy?
Although you cannot directly invest in OpenAI, you can buy shares of Microsoft, which has a 49% stake in the company. And according to analysts, Microsoft stock has a Strong Buy consensus rating among 29 Wall Street analysts. That rating is based on 27 Buys and two Holds assigned in the last three months. After a 17% rally in its share price over the past 12 months, the average MSFT price target of $501.69 implies 15.24% upside potential.
