Blog

When Jeff Bezos was drumming up his early visions of Amazon while working as a hedge fund manager, his Wall Street boss questioned if he could achieve success and financial security by selling books on the internet. And when Howard Schultz was looking for money to back his coffee business, called Starbucks, more than 200 investors believed no one would pay $3 for a cup of joe. 

The same goes for two of Chess.com’s founders, Danny Rensch and Erik Allebest, when they were shopping out their platform to potential investors. Rensch tells Fortune they were routinely overlooked and disregarded.

“We were laughed out of VC rooms who said that chess would never be anything. Nobody invested early on, and it became the biggest blessing in disguise,” Rensch recalls. 

No investor, no problem: Chess.com founder had his own back

Instead of relying on the pockets of investors, the Chess.com founders dipped into their own. They bootstrapped the online business in 2009 with money from Allebest’s former chess ventures, also borrowing $70,000 from a mother’s friend, which Rensch says they paid back very quickly. Soon, the entrepreneurs proved that VC investors missed out on a huge win; today, Chess.com is one of the largest online chess platforms in the world with more than 225 million registered members and 40 million active monthly users. Chess.com says it even surpassed a $1 billion valuation back in 2023.

Despite having to keep his day job for years while his bootstrapped company was clawing its way to profitability, Rensch says he wouldn’t have it any other way. It’s a part of Chess.com’s underdog story as the platform concept was not only mocked by venture capitalists, but also by the chess community at large. Now, the website has become essential for anyone who’s interested in, or serious about, chess—from novices to grandmasters. 

“That is a really important part of the story—there was no money raised. We were completely bootstrapped,” Rensch continues. “And given where chess went, I think it’s funny and adds to the magic of ‘Wow, what happened here?”

It was the ‘laughingstock’ of the chess community before amassing 225 million users

When Chess.com was still on its business bambi legs, it not only had to take heat from the VC world, but also from its own community. Players were doubtful; the internet was still in its relative infancy in 2009. Plus, there were other niche chess gaming sites like ChessPark (which became a part of Chess.com), Chess Tempo, and Red Hot Pawn. 

“Chess.com was the laughingstock of the online chess community,” Rensch says. “It sounds so funny to say now, but it really is important to reflect and understand that the internet—at its earliest inception—was not web two or let alone web three. Your website was just a place with a phone number for a lot of people.”

“There were niche communities and there were the main ones, but Chess.com itself, and the idea that it would become such an amazing home for every level of the chess playing community…was kind of ridiculous for most,” Rensch continues. 

Rensch says he sees his website as a skill-sharpener that enriches people’s lives. In looking at Chess.com like a subscription service—like a Duolingo, Strava, or Spotify—the platform is a “lifestyle” ritual that users feel adds value to their well-being. And in the 16 years since the website’s inception, more than 225 million chess lovers have flocked to the platform to sharpen their gameplay and be in community. 

There is clearly a large demand for AI chatbots that are capable of behaving in romantic or sexual ways. An April survey of 6,000 regular AI users by the Harvard Business Review found that “companionship and therapy” was the most common use case. Another study from Ark Invest found that adult-focused AI platforms made significant gains last year, capturing 14.5% of the market previously dominated by OnlyFans, up from just 1.5% the year before.

Popular alternatives that market themselves as companion AI chatbots, such as Character.ai and Replika, also speak to this growing demand from users. Earlier this year, xAI introduced “companion mode” for its chatbot Grok, a feature that lets users engage with various characters, including a highly sexualized anime persona called “Ani.”

“OpenAI is stuck between a bit of a rock and a hard place, because I think they have seen a strong demand signal from users,” Jessica Li, a senior research analyst at Georgetown’s Center for Security and Emerging Technology, told Fortune. “In terms of the relationships that people are having with models…erotic content or adult content would also fall under this bucket of emotional engagement with the models.”

The move could be an attempt by OpenAI to “straddle the line” between keeping the market share they already have by promising opt-in content moderation for NSFW content, Li said, while also seeing if they can capture other users from more specialized or niche services like Replika.

“Despite some of the narratives around building artificial general intelligence that will supercharge the economy, OpenAI is still trying to operate as a technology platform, and somewhat like a social media company,” Li said. “There’s an interesting tension between the narratives that are being sold to investors and politicians… versus the things that are actually happening in the market.”

OpenAI’s foray into adult content has drawn criticism from child safety advocates and notable industry figures concerned about erotica reaching younger users, despite age verifications.

Earlier this week, the entrepreneur and TV personality Mark Cuban said OpenAI’s plan could “backfire hard,” and argued that parents will not trust OpenAI’s age filters to keep children away from explicit material. In the US, the Federal Trade Commission has already opened an inquiry into how AI chatbots interact with minors, and state lawmakers are considering tighter rules around digital companions and sexualized AI content. Jenny Kim, a partner at the law firm Boies Schiller Flexner, told the BBC that OpenAI is “using people like guinea pigs,” and questioned how the company would prevent children from accessing adult material on the platform.

Reached for comment, OpenAI said that the company was building an age prediction system to understand whether someone is over or under 18. They added that if a user’s age could not be confidently confirmed, the chatbot would take the safer route and default to the under-18 experience, while giving adults ways to prove their age to unlock adult capabilities.

Reacting to some of the backlash on X, Altman said that the announcement had blown “up on the erotica point much more than I thought it was going to.” He emphasized that the change was “just one example of us allowing more user freedom for adults,” not a retreat from safety measures or guardrails around mental health.

“We are not the elected moral police of the world,” he said, adding that ChatGPT would continue to “prioritize safety over privacy and freedom for teenagers” while giving adults more autonomy.

The GPT-4o backlash

OpenAI has also been reckoning with an unexpected wave of backlash following its decision to replace the version of ChatGPT powered by GPT-4o with its newer GPT-5 model. Users revolted against the change, citing lost AI friendships and romantic relationships with the earlier iteration of the bot. One petition to keep the earlier version of the bot gathered almost six thousand signatories.

“For many of us, GPT-4o offers a unique and irreplaceable user experience, combining qualities and capabilities that we value, regardless of performance benchmarks,” the petitioners wrote in the change.org campaign to keep GPT-4o. “We continue to benefit from GPT-4o in ways that are distinct and meaningful.”

While OpenAI eventually restored the earlier version, those in the #keep4o movement have since told Fortune they were worried about the company routing users to GPT-5, “without consent or notification.”

According to Li, the announcement from OpenAI could be trying to signal something to these users: “The very public announcement of it does make me think that they’re trying to signal something to users who are demanding this thing—like, ‘We hear you. We’re responding to your desires.’”

The shift is also not entirely new; it builds upon a quieter update to OpenAI’s Model Spec earlier this year. In February, OpenAI updated the document to relax the rules around sexual and violent content in what it called a move away from “AI paternalism.” Updated guidelines at the time permitted the generation of written erotica and other sensitive material in appropriate contexts. OpenAI also told Fortune that the announcement was part of its plan to build on the latest release of the Model Spec, while maintaining boundaries against harmful uses like deepfakes.