Aby Rosen's Seaport office tower at 17 State St. bouncing back with new lease deals
At 17 State St., which RFR has owned for 25 years, five renewals totaled 68,362 square feet. The largest was for Alphadyne Investment Management, which renewed early on 43,872 square feet.
Rosen, who's shored up his formerly under-siege empire one property at a time, also signed deals with three new tenants totaling over 12,000 square feet, including AI-powered life insurance tech firm Optifino.
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At 17 State St., which RFR has owned for 25 years, five renewals totaled 68,362 square feet.
RFR
The 4,300 square-foot amenities space on the third floor.
RFR
Meanwhile, 17 State launched a new, 4,300 square-foot amenities space on the third floor. The Liberty Lounge and Conference Center boasts a lounge, cafe, library, screening room and ornamental foliage as an homage to nearby Battery Park.
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As per CoStar, the tower is 89% leased. Asking rents range from $65 to $75 per square foot.
The reinvestment and repositioning of 5 Penn Plaza continues to pay off for investor-landlord Stephen Haymes. The 1916 structure between West 33rd and 34th streets landed another new tenant — Fireblocks, a blockchain security platform that helps to store, transfer and manage cryptocurrencies and other digital assets.
The firm, which is moving and expanding from 441 Ninth Ave., signed for 35,000 square feet on the entire 23rd floor and part of the penthouse with a wraparound terrace.
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The building boasts a new lobby, open views, an amenities center and a dog-friendly roof terrace, and is more than 85% leased. Asking rents are in the $70-$80 per square foot range.
A JLL team led by Mitchell Konsker represented the landlord. Newmark's Aaron Ellison and Adam Spector repped the tenant.
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Business Wire
a minute ago
- Business Wire
NiCE Reports 12% Year-Over-Year Cloud Revenue Growth for the Second Quarter 2025 and Raises Full-Year 2025 EPS Guidance
BUSINESS WIRE)-- NiCE (NASDAQ: NICE) today announced results for the second quarter ended June 30, 2025, as compared to the corresponding periods of the previous year. Second Quarter 2025 Financial Highlights 'We're pleased to report another strong quarter, with total revenue reaching $727 million—surpassing the high end of our guidance range—and earnings per share of $3.01 at the top of the expected range,' said Scott Russell, CEO of NiCE. This performance was driven by continued strength in our cloud business, which grew 12% year-over-year. A key catalyst behind this momentum is the accelerating demand for AI and self-service solutions, with annual recurring revenue in this part of our business rising an impressive 42% compared to the same period last year. Mr. Russell continued, 'AI is at the core of our strategy, and we are at the forefront of the AI-first transformation in the customer experience market. And this is just the beginning. Our momentum is set to accelerate further with the upcoming integration of Cognigy's industry-leading CX-AI conversational and agentic capabilities upon closing of the transaction, enabling us to deliver truly human-like, AI-first customer experiences on CXone Mpower. Our continued leadership in AI innovation is powered by our solid financial foundation, strong profitability, and robust balance sheet, as well as a growing number of strategic partnerships secured over the past six months." GAAP Financial Highlights for the Second Quarter Ended June 30: Revenues: Second quarter 2025 total revenues increased 9% year over year to $726.7 million compared to $664.4 million for the second quarter of 2024. Gross Profit: Second quarter 2025 gross profit was $485.1 million compared to $439.6 million for the second quarter of 2024. Second quarter 2025 gross margin was 66.8% compared to 66.2% for the second quarter of 2024. Operating Income: Second quarter 2025 operating income increased 25% to $160.6 million compared to $128.8 million for the second quarter of 2024. Second quarter 2025 operating margin was 22.1% compared to 19.4% for the second quarter of 2024. Net Income: Second quarter 2025 net income increased 62% to $187.4 million compared to $115.8 million for the second quarter of 2024. Second quarter 2025 net income margin was 25.8% compared to 17.4% for the second quarter of 2024. Fully Diluted Earnings Per Share: Second quarter 2025 fully diluted earnings per share increased 69% to $2.96 compared to $1.76 in the second quarter of 2024. Cash Flow and Cash Balance: Second quarter 2025 operating cash flow was $61.3 million and $30.8 million was used for share repurchases. As of June 30, 2025, total cash and cash equivalents, and short-term investments were $1,631.7 million. Our debt, was $459.6 million, resulting in net cash and investments of $1,172.0 million. Non-GAAP Financial Highlights for the Second Quarter June 30: Revenues: Second quarter 2025 non-GAAP total revenues increased 9% year over year to $726.7 million compared to $664.4 million for the second quarter of 2024. Gross Profit: Second quarter 2025 non-GAAP gross profit increased to $503.9 million compared to $469.4 million for the second quarter of 2024. Second quarter 2025 non-GAAP gross margin was 69.3% compared to 70.7% for the second quarter of 2024. Operating Income: Second quarter 2025 non-GAAP operating income increased 9% to $219.7 million compared to $201.7 million for the second quarter of 2024. Second quarter 2025 non-GAAP operating margin was 30.2% compared to 30.4% for the second quarter of 2024. Net Income: Second quarter 2025 non-GAAP net income increased 9% to $190.3 million compared to $174.2 million for the second quarter of 2024. Second quarter 2025 non-GAAP net income margin totaled 26.2% compared to 26.2% for the second quarter of 2024. Fully Diluted Earnings Per Share: Second quarter 2025 non-GAAP fully diluted earnings per share increased 14% to $3.01 compared to $2.64 for the second quarter of 2024. Third Quarter and Full Year 2025 Guidance*: Third-Quarter 2025: Third-quarter 2025 non-GAAP total revenue is expected to be in a range of $722 million to $732 million, representing 5% year over year growth at the midpoint. Third-quarter 2025 non-GAAP fully diluted earnings per share is expected to be in a range of $3.12 to $3.22, representing 10% year over year growth at the midpoint. Full-Year 2025: The Company reaffirmed full-year 2025 non-GAAP total revenue which is expected to be in a range of $2,918 million to $2,938 million, representing 7% year over year growth at the midpoint. The Company raised full-year 2025 non-GAAP fully diluted earnings per share which is expected to be in a range of $12.33 to $12.53, representing 12% year over year growth at the midpoint. *The planned acquisition of Cognigy is expected to close during the fourth quarter of 2025, subject to regulatory approval, and therefore this guidance excludes any planned impact from this proposed transaction. Quarterly Results Conference Call NiCE management will host its earnings conference call today, August 14, 2025, at 8:30 AM ET, 13:30 GMT, 15:30 Israel, to discuss the results and the company's outlook. A live webcast and replay will be available on the Investor Relations page of the Company's website. To access, please register by clicking here: Explanation of Non-GAAP measures Non-GAAP financial measures are included in this press release. Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude share-based compensation, amortization of acquired intangible assets, acquisition related and other expenses, amortization of discount on debt and the tax effect of the Non-GAAP adjustments. The Company believes that these Non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about the financial performance of our business. We believe Non-GAAP financial measures are useful to investors as a measure of the ongoing performance of our business. Our management regularly uses our supplemental Non-GAAP financial measures internally to understand, manage and evaluate our business and to make financial, strategic and operating decisions. These Non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Our Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. These Non-GAAP financial measures may differ materially from the Non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The Company provides guidance only on a Non-GAAP basis. A reconciliation of guidance from a GAAP to Non-GAAP basis is not available due to the unpredictability and uncertainty associated with future events that would be reported in GAAP results and would require adjustments between GAAP and Non-GAAP financial measures, including the impact of future possible business acquisitions. Accordingly, a reconciliation of the guidance based on Non-GAAP financial measures to corresponding GAAP financial measures for future periods is not available without unreasonable effort. About NiCE NiCE (NASDAQ: NICE) is transforming the world with AI that puts people first. Our purpose-built AI-powered platforms automate engagements into proactive, safe, intelligent actions, empowering individuals and organizations to innovate and act, from interaction to resolution. Trusted by organizations throughout 150+ countries worldwide, NiCE's platforms are widely adopted across industries connecting people, systems, and workflows to work smarter at scale, elevating performance across the organization, delivering proven measurable outcomes. Trademark Note: NiCE and the NiCE logo are trademarks or registered trademarks of NICE. All other marks are trademarks of their respective owners. For a full list of NiCE trademarks, please see: Forward-Looking Statements This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements may be identified by words such as 'believe', 'expect', 'seek', 'may', 'will', 'intend', 'should', 'project', 'anticipate', 'plan', and similar expressions. Forward-looking statements are based on the current beliefs, expectations and assumptions of the Company's management regarding the future of the Company's business, performance, future plans and strategies, projections, anticipated events and trends, the economic environment, and other future conditions. Examples of forward-looking statements include guidance regarding the Company's revenue and earnings and the growth of our cloud, analytics and artificial intelligence business. Forward looking statements are inherently subject to significant uncertainties, contingencies, and risks, including, economic, competitive and other factors, which are difficult to predict and many of which are beyond the control of management. The Company cautions that these statements are not guarantees of future performance, and investors should not place undue reliance on them. There are or will be important known and unknown factors and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors, include, but are not limited to, risks associated with changes in economic and business conditions, competition, successful execution of the Company's growth strategy, success and growth of the Company's cloud Software-as-a-Service business, difficulties in making additional acquisitions or effectively integrating acquired operations, products, technologies and personnel, the Company's dependency on third-party cloud computing platform providers, hosting facilities and service partners, rapid changes in technology and market requirements, the implementation of AI capabilities in certain products and services; decline in demand for the Company's products; inability to timely develop and introduce new technologies, products and applications, loss of market share, cyber security attacks or other security incidents, privacy concerns and legislation impacting the Company's business, changes in currency exchange rates and interest rates, the effects of additional tax liabilities resulting from our global operations, the effect of unexpected events or geo-political conditions, including those arising from political instability or armed conflict that may disrupt our business and the global economy, our ability to recruit and retain qualified personnel, the effect of newly enacted or modified laws, regulation or standards on the Company and our products, and various other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the 'SEC'). You are encouraged to carefully review the section entitled 'Risk Factors' in our latest Annual Report on Form 20-F and our other filings with the SEC for additional information regarding these and other factors and uncertainties that could affect our future performance. The forward-looking statements contained in this press release speak only as of the date hereof, and the Company undertakes no obligation to update or revise them, whether as a result of new information, future developments or otherwise, except as required by law. NICE LTD. AND SUBSIDIARIES U.S. dollars in thousands (except per share amounts) Quarter ended Year ended June 30, June 30, 2025 2024 2025 2024 Unaudited Unaudited Unaudited Unaudited Revenue: Cloud $ 540,822 $ 481,693 $ 1,067,145 $ 950,099 Services 140,480 147,611 280,683 296,524 Product 45,410 35,096 79,076 77,086 Total revenue 726,712 664,400 1,426,904 1,323,709 Cost of revenue: Cloud 185,971 170,702 365,445 340,680 Services 48,254 46,663 94,497 92,749 Product 7,376 7,418 13,739 14,023 Total cost of revenue 241,601 224,783 473,681 447,452 Gross profit 485,111 439,617 953,223 876,257 Operating expenses: Research and development, net 89,762 86,522 178,864 174,354 Selling and marketing 169,799 157,645 331,233 312,660 General and administrative 64,958 66,626 134,365 138,980 Total operating expenses 324,519 310,793 644,462 625,994 Operating income 160,592 128,824 308,761 250,263 Financial and other income, net (14,820 ) (15,645 ) (30,670 ) (29,654 ) Income before tax 175,412 144,469 339,431 279,917 Taxes on income (11,992 ) 28,684 22,737 57,759 Net income $ 187,404 $ 115,785 $ 316,694 $ 222,158 Earnings per share: Basic $ 3.01 $ 1.82 $ 5.05 $ 3.50 Diluted $ 2.96 $ 1.76 $ 4.97 $ 3.36 Weighted average shares outstanding: Basic 62,160 63,534 62,754 63,406 Expand NICE LTD. AND SUBSIDIARIES U.S. dollars in thousands Quarter ended Year ended June 30, June 30, 2025 2024 2025 2024 Unaudited Unaudited Unaudited Unaudited Operating Activities Net income $ 187,404 $ 115,785 $ 316,694 $ 222,158 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 44,612 51,520 88,053 103,280 Share-based compensation 37,310 42,226 80,647 86,630 Amortization of premium and discount and accrued interest on marketable securities (2,029 ) (2,096 ) (4,304 ) (3,328 ) Deferred taxes, net (3,757 ) (15,773 ) (25,294 ) (11,407 ) Changes in operating assets and liabilities: Trade Receivables, net (30,742 ) (6,707 ) (26,064 ) 1,430 Prepaid expenses and other current assets (14,846 ) 1,740 13,709 10,501 Operating lease right-of-use assets 2,929 3,372 8,826 6,653 Trade payables 21,884 17,702 (31,407 ) 6,939 Accrued expenses and other current liabilities (158,979 ) (40,836 ) (109,461 ) (43,704 ) Deferred revenue (19,719 ) 4,742 49,855 50,281 Operating lease liabilities (746 ) (3,976 ) (10,935 ) (7,776 ) Amortization of discount on long-term debt 428 425 849 974 Other (2,427 ) 1,544 (4,775 ) 1,527 Net cash provided by operating activities 61,322 169,668 346,393 424,158 Investing Activities Purchase of property and equipment (4,579 ) (6,455 ) (8,246 ) (16,976 ) Purchase of Investments (24,687 ) (105,991 ) (74,141 ) (437,113 ) Proceeds from sales of marketable investments 76,416 51,971 134,774 568,121 Capitalization of internal use software costs (18,137 ) (15,238 ) (34,903 ) (31,174 ) Payments for business acquisitions, net of cash acquired - - (36,466 ) - Net cash provided by (used in) investing activities 29,013 (75,713 ) (18,982 ) 82,858 Financing Activities Proceeds from issuance of shares upon exercise of options 333 520 1,008 2,312 Purchase of treasury shares (30,839 ) (146,088 ) (283,168 ) (187,603 ) Dividends paid to noncontrolling interest - - - (2,681 ) Repayment of debt - - - (87,435 ) Net cash used in financing activities (30,506 ) (145,568 ) (282,160 ) (275,407 ) Effect of exchange rates on cash and cash equivalents 5,139 (1,309 ) 6,286 (3,248 ) Net change in cash, cash equivalents and restricted cash 64,968 (52,922 ) 51,537 228,361 Cash, cash equivalents and restricted cash, beginning of period $ 471,601 $ 794,597 $ 485,032 $ 513,314 Cash, cash equivalents and restricted cash, end of period $ 536,569 $ 741,675 $ 536,569 $ 741,675 Expand Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet: Cash and cash equivalents $ 535,050 $ 739,556 $ 535,050 $ 739,556 Restricted cash included in other current assets $ 1,519 $ 2,119 $ 1,519 $ 2,119 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 536,569 $ 741,675 $ 536,569 $ 741,675 Expand NICE LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS U.S. dollars in thousands (except per share amounts) Quarter ended Year to date June 30, June 30, 2025 2024 2025 2024 GAAP revenues $ 726,712 $ 664,400 $ 1,426,904 $ 1,323,709 Non-GAAP revenues $ 726,712 $ 664,400 $ 1,426,904 $ 1,323,709 GAAP cost of revenue $ 241,601 $ 224,783 $ 473,681 $ 447,452 Amortization of acquired intangible assets on cost of cloud (13,202 ) (24,133 ) (28,605 ) (49,500 ) Amortization of acquired intangible assets on cost of product - (150 ) - (410 ) Cost of cloud revenue adjustment (1,2) (3,293 ) (2,852 ) (6,471 ) (5,854 ) Cost of services revenue adjustment (1) (2,241 ) (2,617 ) (4,696 ) (4,995 ) Cost of product revenue adjustment (1) (21 ) (30 ) (43 ) (60 ) Non-GAAP cost of revenue $ 222,844 $ 195,001 $ 433,866 $ 386,633 GAAP gross profit $ 485,111 $ 439,617 $ 953,223 $ 876,257 Gross profit adjustments 18,757 29,782 39,815 60,819 Non-GAAP gross profit $ 503,868 $ 469,399 $ 993,038 $ 937,076 GAAP operating expenses $ 324,519 $ 310,793 $ 644,462 $ 625,994 Research and development (1,2) (3,178 ) (7,484 ) (7,871 ) (15,627 ) Sales and marketing (1,2) (13,258 ) (13,210 ) (28,672 ) (27,382 ) General and administrative (1,2) (16,924 ) (17,429 ) (36,482 ) (37,260 ) Amortization of acquired intangible assets (6,956 ) (4,972 ) (11,649 ) (10,211 ) Valuation adjustment on acquired deferred commission - 8 - 23 Non-GAAP operating expenses $ 284,203 $ 267,706 $ 559,788 $ 535,537 GAAP financial and other income, net $ (14,820 ) $ (15,645 ) $ (30,670 ) $ (29,654 ) Amortization of discount on debt (428 ) (425 ) (849 ) (974 ) Change in fair value of contingent consideration - (35 ) - (79 ) Non-GAAP financial and other income, net $ (15,248 ) $ (16,105 ) $ (31,519 ) $ (30,707 ) GAAP taxes on income $ (11,992 ) $ 28,684 $ 22,737 $ 57,759 Tax adjustments re non-GAAP adjustments 56,627 14,963 66,720 28,779 Non-GAAP taxes on income $ 44,635 $ 43,647 $ 89,457 $ 86,538 GAAP net income $ 187,404 $ 115,785 $ 316,694 $ 222,158 Amortization of acquired intangible assets 20,158 29,255 40,254 60,121 Valuation adjustment on acquired deferred commission - (8 ) - (23 ) Share-based compensation (1) 38,915 43,622 83,840 89,266 Acquisition related and other expenses (2) - - 395 1,912 Amortization of discount on debt 428 425 849 974 Change in fair value of contingent consideration - 35 - 79 Tax adjustments re non-GAAP adjustments (56,627 ) (14,963 ) (66,720 ) (28,779 ) Non-GAAP net income $ 190,278 $ 174,151 $ 375,312 $ 345,708 GAAP diluted earnings per share $ 2.96 $ 1.76 $ 4.97 $ 3.36 Non-GAAP diluted earnings per share $ 3.01 $ 2.64 $ 5.88 $ 5.22 Shares used in computing GAAP diluted earnings per share 63,210 65,856 63,785 66,192 Expand NICE LTD. AND SUBSIDIARIES U.S. dollars in thousands (1) Share-based compensation Quarter ended Year to date June 30, June 30, 2025 2024 2025 2024 Cost of cloud revenue $ 3,293 $ 2,852 $ 6,471 $ 5,792 Cost of services revenue 2,241 2,617 4,696 4,995 Cost of product revenue 21 30 43 60 Research and development 3,178 7,484 7,871 15,297 Sales and marketing 13,258 13,210 28,672 26,739 General and administrative 16,924 17,429 36,087 36,383 (2) Acquisition related and other expenses June 30, June 30, 2025 2024 2025 2024 Cost of cloud revenue $ - $ - $ - $ 62 Research and development - - - 330 Sales and marketing - - - 643 General and administrative - - 395 877 $ - $ - $ 395 $ 1,912 Expand NICE LTD. AND SUBSIDIARIES U.S. dollars in thousands Quarter ended Year to date June 30, June 30, 2025 2024 2025 2024 Unaudited Unaudited Unaudited Unaudited GAAP net income $ 187,404 $ 115,785 $ 316,694 $ 222,158 Non-GAAP adjustments: Depreciation and amortization 44,612 51,520 88,053 103,280 Share-based compensation 37,310 42,226 80,647 86,630 Financial and other expense/ (income), net (14,820 ) (15,645 ) (30,670 ) (29,654 ) Acquisition related and other expenses - - 395 1,912 Valuation adjustment on acquired deferred commission - (8 ) - (23 ) Taxes on income (11,992 ) 28,684 22,737 57,759 Non-GAAP EBITDA $ 242,514 $ 222,562 $ 477,856 $ 442,062 Expand NICE LTD. AND SUBSIDIARIES U.S. dollars in thousands Quarter ended Year to date June 30, June 30, 2025 2024 2025 2024 Unaudited Unaudited Unaudited Unaudited Net cash provided by operating activities $ 61,322 $ 169,668 $ 346,393 $ 424,158 Purchase of property and equipment (4,579 ) (6,455 ) (8,246 ) (16,976 ) Capitalization of internal use software costs (18,137 ) (15,238 ) (34,903 ) (31,174 ) Free Cash Flow (a) $ 38,606 $ 147,975 $ 303,244 $ 376,008 Expand (a) Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital expenditures of the continuing operations and less capitalization of internal use software costs. Expand
Wall Street Journal
2 minutes ago
- Wall Street Journal
CoreWeave Rode the AI Boom. Can It Pass a Crucial Test of Investor Enthusiasm?
CoreWeave CRWV -20.83%decrease; red down pointing triangle is about to find out just how much the forces of supply and demand will keep breaking in its favor. The provider of artificial-intelligence cloud services has done pretty well by them so far. The company just posted $1.2 billion in revenue for the second quarter—more than triple what it generated in the same period a year earlier. That is due to booming demand for AI workloads that the company's data centers are specially designed to provide. Those data centers are loaded with Nvidia's NVDA -0.86%decrease; red down pointing triangle chips, including the latest, hard-to-come-by Blackwell line.
CNN
32 minutes ago
- CNN
The latest ChatGPT is supposed to be ‘PhD level' smart. It can't even label a map
A version of this story appeared in CNN Business' Nightcap newsletter. To get it in your inbox, sign up for free here. Sam Altman, the artificial intelligence hype master, is in damage-control mode. OpenAI's latest version of its vaunted ChatGPT bot was supposed to be 'PhD-level' smart. It was supposed to be the next great leap forward for a company that investors have poured billions of dollars into. Instead, ChatGPT got a flatter, more terse personality that can't reliably answer basic questions. The resulting public mockery has forced the company to make sweaty apologies while standing by its highfalutin claims about the bot's capabilities. In short: It's a dud. The misstep on the model, called GPT-5, is notable for a couple of reasons. 1. It highlighted the many existing shortcomings of generative AI that critics were quick to seize on (more on that in a moment, because they were quite funny). 2. It raised serious doubts about OpenAI's ability to build and market consumer products that human beings are willing to pay for. That should be particularly concerning for investors, given OpenAI, which has never turned a profit, is reportedly worth $500 billion. Let's rewind a bit to last Thursday, when OpenAI finally released GPT-5 to the world — about a year behind schedule, according to the Wall Street Journal. Now, one thing this industry is really good at is hype, and on that metric, CEO Sam Altman delivered. During a livestream ahead of the launch last Thursday, Altman said talking to GPT-5 would be like talking to 'a legitimate PhD-level expert in anything, any area you need.' In his typically lofty style, Altman said GPT-5 reminds him of 'when the iPhone went from those giant-pixel old ones to the retina display.' The new model, he said, is 'significantly better in obvious ways and subtle ways, and it feels like something I don't want to ever have to go back from,' Altman said in a press briefing. Then people started actually using it. Users had a field day testing GPT-5 and mocking its wildly incorrect answers. The journalist Tim Burke said on Bluesky that he prompted GPT-5 to 'show me a diagram of the first 12 presidents of the United States with an image of their face and their name under the image.' The bot returned an image of nine people instead, with rather creative spellings of America's early leaders, like 'Gearge Washingion' and 'William Henry Harrtson.' A similar prompt for the last 12 presidents returned an image that included two separate versions of George W. Bush. No, not George H.W. Bush, and then Dubya. It had 'George H. Bush.' And then his son, twice. Except the second time, George Jr. looked like just some random guy. Labeling basic maps of the United States also proved tricky for GPT-5 (but again, pretty funny, as tech writer Ed Zitron's post on Bluesky showed). GPT-5 did slightly better when I asked it on Wednesday for a map of the US. Some people can, in fact, label the great state of Vermont correctly without a PhD, but not GPT-5. And this is the first I'm hearing of states named 'Yirginia.' The slop coming out of GPT-5 was funny when it was just us nerds trying to find its blind spots. But some regular fans of ChatGPT weren't laughing. Especially because users have been particularly alarmed by the new version's personality – or rather, lack thereof. In rolling out the new model, OpenAI essentially retired its earlier models, including the wildly popular GPT-4o that's been on the market for over a year, making it so that even people who loved the previous iteration of the chatbot suddenly couldn't use it. More than 4,000 people signed a petition to compel OpenAI to resurrect it. 'I'm so done with ChatGPT 5,' one user wrote on Reddit, explaining how they tried to use the new model to run 'a simple system' of tasks that an earlier ChatGPT model used to handle. The user said GPT-5 'went rogue,' deleting tasks and moving deadlines. And while OpenAI's defenders could chalk that up to an isolated or even made-up incident, within 24 hours of the GPT-5 launch Altman was doing damage control, seemingly caught of guard by the bad reception. On X, he announced a laundry list of updates, including the return of GPT-4o for paid subscribers. 'We expected some bumpiness as we roll out so many things at once,' Altman said in a post. 'But it was a little more bumpy than we hoped for!' The CEO's failure to anticipate the outrage suggests he doesn't have a firm grasp on how an estimated 700 million weekly active users are engaging with his product. Perhaps Altman missed all the coverage — from CNN, the New York Times, the Wall Street Journal — of people forming deep emotional attachments to ChatGPT or rival chatbots, having endless conversations with them as if they were real people. A simple search of Reddit could have offered insights into how others are integrating the tool into their workflows and lives. Basic market research should have shown OpenAI that a mass update sunsetting the tools people rely on would be more than just a bit bumpy. When asked about the backlash to GPT-5, an OpenAI representative pointed CNN to Altman's public statements on social media announcing the return of older models, as well as a blog post about how the company is optimizing GPT-5. The messy rollout speaks to how the AI industry as a whole is struggling to prove themselves as producers of consumer goods rather than 'labs' — as they love to call themselves, because it sounds more scientific and distracts people from the fact that they are backed by people who are trying to make unfathomable amounts of cash for themselves. AI companies often base their fanfare around how a model performs in various behind-the-scenes benchmark tests that show how well a bot can do complex math. For all we know, GPT-5 sailed through those evaluations. But the problem is that OpenAI hyped the thing so far into the stratosphere, disappointment was (or should have been) inevitable. 'I honestly didn't think OpenAI would burn the brand name on something so mid,' wrote prominent researcher and AI critic Gary Marcus. 'In a rational world, their valuation would take a hit,' he added, noting OpenAI still hasn't turned a profit, is slashing prices to keep its user numbers up, and is hemorrhaging talent as competition heats up. For critics like Marcus, the GPT-5 flop was a kind of vindication. As he noted in a blog post, other models like Elon Musk's Grok aren't faring much better, and the backlash from even AI proponents feels like a turning point. When people talk about AI, they're talking about one of two things: the AI we have now — chatbots with limited, defined utility — and the AI that companies like Altman's claim they can build — machines that can outsmart humans and tell us how to cure cancer, fix global warming, drive our cars and grow our crops, all while entertaining and delighting us along the way. But the gap between the promise and the reality of AI only seems to widen with every new model. CNN's Lisa Eadicicco contributed reporting.
