OpenAI’s o3 tackles specific hurdles in reasoning and adaptability that have long stymied large language models. At the same time, it exposes challenges, including the high costs and efficiency bottlenecks inherent in pushing these systems to their limits. This article will explore five key innovations behind the o3 model, many of which are underpinned by advancements in reinforcement learning (RL), to unpack what this means for the future of AI as we move into 2025.