(Reuters) - OpenAI said on Friday it was testing new reasoning AI models, o3 and o3 mini, in a sign of growing competition with rivals such as Google to create smarter models capable of tackling complex problems.

CEO Sam Altman said the AI startup plans to launch o3 mini by the end of January, and full o3 after that, as more robust large language models could outperform existing models and attract new investments and users.

Microsoft ( MSFT )-backed OpenAI released o1 AI models in September designed to spend more time processing queries to solve hard problems.

The o1 models are capable of reasoning through complex tasks and can solve more challenging problems than previous models in science, coding and math, the AI firm had said in a blog post.

OpenAI's new o3 and o3 mini models, which are in internal safety testing currently, will be more powerful than its previously launched o1 models, the company said.

The GenAI pioneer said it was opening up an application process for external researchers to test o3 models ahead of the public release, which will close on Jan. 10.

OpenAI had triggered an AI arms race after it launched ChatGPT in November 2022. The growing popularity of the company and new product launches helped OpenAI in closing a $6.6 billion funding round in October.

Rival Alphabet's Google released the second generation of its AI model Gemini earlier in December, as the search giant aims to reclaim the lead in the AI technology race.