OpenAI launches o3-mini, a more cost-effective AI model with improved reasoning

31 January 2025 , 19:49

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OpenAI launches o3-mini, a more cost-effective AI model with improved reasoning

OpenAI on Friday released o3-mini, an AI model that focuses on improved reasoning capabilities at a more modest cost than its predecessor.

Why it matters: The announcement of the new model follows Chinese AI startup DeepSeek’s release of its R1 open-source model, which shook up the AI industry and heated up the U.S.-China AI arms race.

Driving the news: The o3-mini model, previewed last month, promises faster response times compared to o1, reduced computational requirements and the ability to handle simpler queries with ease, all with a lower cost.

• It’s the first time OpenAI has brought reasoning capabilities to users of its free ChatGPT service.
• The o3-mini model is a smaller version of OpenAI’s o3 model, which has not yet been released for broad use.

o3-mini also offers the ability to choose between three levels of reasoning: low, medium, and high.

• ChatGPT Plus users will be able to send 150 queries a day to o3-mini.
• The free tier of ChatGPT will also receive access to o3-mini, but it’s unclear how many queries non-paying users will be able to send each day. ChatGPT Enterprise and Edu customers will get access next week.

Zoom in: OpenAI also added a "think" option for GPT-4o and other models that shows up between the files and web search icons. When toggled on, it uses Chain-of-Thought (CoT) reasoning for responses, narrating the steps in its response to a query — similarly to the o1 model and DeepSeek’s R1.

• CoT reasoning prompts LLMs to generate intermediate reasoning steps before arriving at a final answer, similar to how our cognitive processes break down complex problems into smaller, manageable parts. 

What they’re saying: "Our mission is to make sure the U.S. wins this race," OpenAI chief product officer Kevin Weil told CNBC on Thursday.

• "I want an AI that behaves according to democratic values," he said. "I don’t want an AI that behaves according to authoritarian values."

The big picture: OpenAI continues to raise more money this year and is said to be in talks with SoftBank for a new investment in the tens of billions of dollars, multiple outlets reported this week.

• The last fundraising deal OpenAI completed was in October 2024, during which the company raised $6.6 billion, valuing it at $157 billion.

Grace Cooper