CNBC's MacKenzie Sigalos reports on OpenAI’s most advanced video model yet and its recent backlash.

OpenAI has reached a $500 billion valuation following the launch of its AI video app, Sora 2, which allows users to create short video clips using text or image prompts. The release comes amid intense competition from other tech giants and has quickly gone viral due to the app's ability to generate highly realistic deepfake-style videos, including clips featuring public figures and copyrighted characters in controversial scenarios.

The launch has prompted criticism regarding the adequacy of OpenAI's safety systems, with some users already finding ways to circumvent content moderation and explicit material bans. While OpenAI maintains that it has implemented strict guardrails, concerns remain about the potential misuse of the technology. The company requires public figures to opt in for their likeness to be used, while copyright holders must opt out. Despite these measures, the app's popularity and the ease of bypassing restrictions have fueled ongoing debate about the balance between creative freedom and safety.

OpenAI's Sora 2 sparks AI 'slop' backlash

OpenAI officially hitting a $500 billion valuation amid a flurry of new product and deal announcements today, including the launch of its AI video app, Sora, which is already facing some backlash online. For that, we'll turn to Mackenzie Sagalos in today's Tech Check. I'm back. Hey, Carl. So OpenAI has a habit of releasing new products the moment a rival moves, and this week it is video. On Tuesday, the company unveiled Sora 2 along with its first video generation app, a TikTok-style feed where users can create short clips using text or image prompts. Now, it is a crowded field. Meta launched Vibes last week. Google has VO3, ByteDance has Cdance, and Alibaba is in the mix too. Against this backdrop, Sora 2 marks a major leap for OpenAI. Sora 1 was underwhelming, but the new version is going viral thanks to deepfake-style clips that look strikingly real. The one we're showing now is of CEO Sam Altman shoplifting GPUs. Others feature cartoon characters from Pokemon and Nickelodeon in disturbing roles. Now, critics are questioning whether OpenAI is repeating an old pattern, racing ahead of the guardrails. The company insists it has robust safety systems in place like strict content moderation and hard bans on explicit material, but users have already shown it is possible to bypass those guardrails. Altman, meanwhile, is brushing off the backlash, saying yesterday in a post on X that this is partly a play for commercial momentum to pay for its larger AGI ambitions. But inside the company, a source briefed on internal discussions says the team is still trying to thread the needle between safety and creative freedom. I spoke to former OpenAI employees, and one told me that during their tenure, the company typically prioritized speed when it came to shipping products, in part to stay ahead of its Gen AI rivals and justify a half a trillion dollar valuation. But now OpenAI has a reputation to protect and a business to scale, especially after committing nearly a trillion dollars to chips and infrastructure just last week. Gaius? I mean, these videos are incredible. The one that you showed there with the AI generation of Sam Altman shoplifting is, I mean, it's almost impossible to tell that it is not reality. There just has to be so much concern about that. I mean, Altman himself has to be concerned about this video for people that don't know the ins and outs of what OpenAI is doing or don't know the ins and outs of him. If you're just a general user of this technology. So, I mean, to your first point, it is indeed so impressive, and that's why you're seeing the Sora app jump to number three on the App Store, even though it's heavily gated, it is still very hard to get in a long wait list. But to your larger point about what this says around the potential safety concerns, I've talked to technologists who are in the business of spotting deep fakes and creating algorithms to protect against that. And it is concerning because it doesn't matter how many safety guardrails you put into place is what I'm told, because people will find ways to bypass them. So in the case of Sora 2, there are watermarks. It blocks you from screen recording, but people are finding workarounds. It is the internet and people don't follow the rules all the time. It kind of reminds me, Mac, that we should all sort of be prepared to wind up eventually in a video with our image, not of our choosing. I was just thinking that. Well, this is a key distinction here though, because with Sora 2, you have to opt in if you're a public figure, but, you know, which is classic for the open AI playbook, if you are a copyright holder, you have to opt out. So they've done that with other iterations of these image generation tools, but that is key here. So the reason that Sam Altman's likeness was used in that video is because he opted into the system. Then they say there are these safeguards around explicit content. So you can't use his image to do certain things, but shoplifting wasn't on that list. Han, that is very, a very interesting point that you make there, that he opted in for his image to be used, but maybe not under all circumstances, but that one slipped through. Wow, great stuff, Mackenzie. Thank you so much. I always learn so much when you're on. Appreciate it.

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