ChatGPT-Creator OpenAI May Go Bankrupt By Next Year: Report

OpenAI, under Sam Altman's stewardship, is reportedly experiencing a substantial depletion of its financial resources.

Since the inception of ChatGPT's development, OpenAI's losses have expanded twofold, amounting to $540 million as of May. ( Image Source :Getty )

OpenAI, the artificial intelligence (AI) venture led by Sam Altman, is facing potential financial turbulence, according to an analysis presented by Analytics India Magazine. This assessment indicates that the company's fiscal stability could be at risk, potentially culminating in insolvency by the close of 2024. As outlined in the report, the operational expenses linked to a single AI service provided by OpenAI, specifically ChatGPT, amount to approximately $700,000 per day. The company, under Sam Altman's stewardship, is currently experiencing a substantial depletion of its financial resources. Despite endeavours to monetise the GPT-3.5 and GPT-4 technologies, OpenAI has yet to generate adequate revenue to offset its costs.

Following its launch in November 2022, ChatGPT rapidly ascended to the status of the fastest-growing application in history. However, after an initial surge in user adoption, the company has observed a progressive wane in user engagement during recent months. Data sourced from SimilarWeb reveals a notable contraction in the user base of ChatGPT as of the end of July.

Comparing figures from June to July 2023, a reduction of 12 per cent in the user base was recorded, signifying a drop from 1.7 billion users to 1.5 billion users, as corroborated by SimilarWeb's data.

The situation is further compounded by the evolving dynamics of OpenAI's APIs. The report highlights that several entities that previously discouraged their personnel from utilising ChatGPT have now sought access to OpenAI's APIs. This access empowers these organisations to fashion their own AI-powered chatbots tailored to their diverse operational needs.

Analytics India Magazine's report accentuates this trend, underscoring the presence of multiple open-source Language Model models (LLMs) that can be employed without licensing restrictions. This flexibility permits organisations to finely customise these models to address their specific utility scenarios.

Illustrating this point, the report cites the instance of Meta's Llama 2, which, in collaboration with Microsoft, permits commercial utilisation of the model. In light of this, the question arises: why opt for OpenAI's paid, proprietary, and restricted offering, when the more adaptable Llama 2 is available? In certain application domains, Llama 2 is perceived as surpassing GPT in efficacy. This shift is already taking place.

In the context of profitability, the report divulges that OpenAI remains in a non-profitable position. Since the inception of ChatGPT's development, the company's losses have expanded twofold, amounting to $540 million as of May. The infusion of $10 billion by Microsoft into OpenAI is potentially sustaining the organisation in the short term. However, OpenAI's projections of achieving an annual revenue of $200 million in 2023 and scaling to $1 billion in 2024 seem ambitious, given the escalating losses, as underscored by the report.