OpenAI, the creator of ChatGPT and one of the leading generative artificial intelligence (GenAI) companies, may soon be bankrupt, according to a report from The Information. https://www.theinformation.com/articles/why-openai-could-lose-5-billion-this-year
Arguably the company that brought GenAI into the mainstream consciousness, OpenAI may lose up to US$5 billion this year and could run out of cash within the next 12 months, according to the report.
It costs about US$700,000 a day to run ChatGPT, on top of the estimated US$7 billion used to train its models and US$1.5 billion on personnel costs.
Revenue simply insufficient
OpenAI has a lot of cash moving through its coffers, generating about US$2 billion from ChatGPT itself and a further US$1 billion in large language model (LLM) access fees but even those billions are not enough to cover day-to-day running costs.
On the other hand, the company has no shortage of wealthy backers funding its efforts.
The AI start-up has raised US$11 billion so far from investors including Microsoft (NASDAQ:MSFT), Elon Musk, Sequoia Capital and Tiger Global Management.
OpenAI certainly doesn’t seem concerned with its revenue issues – the company launched SearchGPT last week, an AI-powered search engine to rival Google (NASDAQ:GOOGL).
The company’s founder is also undeterred, telling students at Stanford University that he isn’t worried about how much OpenAI is spending.
“Whether we burn $500 million a year or $5 billion - or $50 billion a year - I don’t care, I genuinely don’t,” he continued. “As long as we can figure out a way to pay the bills, we’re making AGI. It’s going to be expensive.”
AGI, or artificial general intelligence, is the level at which AI is capable of reasoning in a similar way to a human. The definition is vague – Elon Musk is suing OpenAI, claiming ChatGPT-4 already meets this goal.
Either way, it seems OpenAI will continue churning through capital in the pursuit of more powerful AI, at least while its backers are happy to continue funding it.