The landscape of artificial intelligence (AI) is evolving at an unprecedented rate. The anticipated releases of OpenAI’s GPT-4.5 and GPT-5 are generating significant buzz. In this post, I thought to dissect what these developments mean for the large language model (LLM) race and, more importantly, for European businesses.
The Impending Arrival of GPT-4.5
OpenAI’s GPT-4.5, codenamed “Orion”, is slated for release in the coming weeks. This model is expected to be the final iteration before OpenAI transitions to chain-of-thought models, which aim to enhance AI’s reasoning capabilities.
While specific performance metrics remain under wraps, internal reports suggest that GPT-4.5 will offer notable improvements over its predecessor, GPT-4. Microsoft, a key partner of OpenAI, is reportedly preparing its server infrastructure to support GPT-4.5, with hosting expected to commence imminently. The Verge
Vastly prolonged memory on the model would be a welcomed upgrade, something I personally struggled lately with OpenAI’s 4o-model while rescuing files from a broken Windows hard drive over a network using Debian and finally reconstructing data from corrupt database tables.
Anticipating GPT-5: A Leap Towards Unified Intelligence
Looking ahead, GPT-5 is plausibly projected for release in late May 2025. This model aims to integrate OpenAI’s various technological advancements, including the o3 reasoning model, into a cohesive system. The o3 model focuses on enhancing AI’s self-verification processes, thereby improving reliability in complex problem-solving scenarios. Speculatively, by unifying the o-series and GPT-series models, OpenAI seeks to eliminate the need for users to select specific models for different tasks, streamlining the user experience. The Verge
Hopefully, we will not have to ask GPT to double- and triple-check the facts and to rate and self assess the tasks we give it anymore. It will also remain to be seen if the use of these new models will be limited even for Plus-subscribers.
Implications for the LLM Race
The accelerated development and deployment of GPT-4.5 and GPT-5 underscore the intensifying competition in the LLM arena. Microsoft’s proactive infrastructure scaling indicates a strategic commitment to maintaining a competitive edge, particularly as these releases are expected to coincide with major industry events like the Microsoft Build developer conference in May 2025. This timing suggests a deliberate effort to showcase AI advancements and potentially unveil new AI-driven features or services. The Verge
Moreover, the integration of advanced reasoning models and the unification of AI systems reflect a broader trend towards creating more versatile and user-friendly AI applications. This evolution is likely to set new benchmarks for AI capabilities, prompting competitors to accelerate their own development efforts to keep pace.
The rapid iteration and deployment of LLMs highlight the intensifying AI competition. Microsoft’s strategic positioning as OpenAI’s key cloud partner ensures it remains at the forefront of this race. The expected announcements at Microsoft Build 2025 suggest that GPT-5 will be integrated into more enterprise applications, reshaping how businesses leverage AI. TechCrunch
What This Means for European Businesses
Europe has long sought to establish itself as a major player in the AI space, but the rapid advancement of American AI models presents both opportunities and risks. Unlike the US and China, where AI development is primarily driven by private corporations, Europe’s AI strategy has largely been shaped by regulatory concerns and state-backed initiatives. With GPT-4.5 and GPT-5 entering the scene, European businesses and policymakers face key decisions.
Opportunities:
- Increased AI Adoption in Industry: With more reliable and versatile models, European firms – especially in manufacturing, logistics and finance – can integrate AI into decision-making, automation and customer service without needing extensive in-house AI expertise.
- Boost for Startups and Innovation: The availability of more advanced AI models could lower entry barriers for European AI startups, allowing them to focus on fine-tuning AI for niche applications rather than building foundational models from scratch.
- Improved Public Services and Governance: Governments can leverage AI for smarter urban planning, better public healthcare analytics and more efficient bureaucratic processes. This aligns with ongoing EU initiatives aimed at digital transformation.
Risks and Challenges:
- Dependence on US AI Providers: While Europe has ambitious AI goals, its tech ecosystem remains heavily reliant on American infrastructure and models. If OpenAI and Microsoft dominate the next AI wave, European businesses will struggle to maintain digital sovereignty.
- Regulatory Bottlenecks: The EU AI Act, while designed to ensure ethical AI development, could slow down adoption if businesses struggle to comply with its stringent requirements. American firms, on the other hand, are moving at breakneck speed at the same time, potentially outpacing European competitors.
- Data Security and Compliance Risks: GDPR-compliant AI solutions will be crucial. European businesses integrating GPT-5 into operations must ensure they remain within legal boundaries regarding data privacy, or risk severe fines and reputational damage.
Navigating AI’s New Reality
GPT-4.5 and GPT-5 mark a defining moment in AI development, bringing both unprecedented capabilities and strategic dilemmas for Europe. The continent must act decisively – embracing AI to drive productivity and competitiveness while ensuring ethical considerations are met. As the AI revolution accelerates, Europe stands at a crossroads: will it become a global leader in AI regulation and innovation, or will it fall further behind the US and China? The coming months will be crucial in shaping this trajectory.
Two lattes and an Orion, to go. Thanks.
North Atlantic
Victor A. Lausas
