ChatGPT costs $700,000 daily, maker may go bankrupt in 2024: Report

OpenAI spends roughly $700,000 per day (round Rs. 5.8 crore) to run ChatGPT and Microsoft and different latest traders are masking these prices out of their very own pockets. They, nevertheless, might flip off the faucet if Sam Altman-led firm would not flip a revenue quickly and it could go bankrupt by the top of 2024, in line with a report revealed in Analytics India Journal.

“Microsoft’s $10 billion investment in OpenAI is possibly keeping the company afloat at the moment. But on the other hand, OpenAI projected an annual revenue of $200 million in 2023, and expects to reach $1 billion in 2024, which seems to be a long shot since the losses are only mounting,”the report mentioned, and famous that in Could this yr, OpenAI’s losses doubled to $540 million ever because it began creating ChatGPT. 


The report famous that despite the fact that CEO Sam Altman doesn’t personal fairness in OpenAI, the corporate shifted from being a non-profit to revenue approach again.


The report highlighted the shrinking consumer visits to ChatGPT web site and referred to SimilarWeb’s knowledge which confirmed that after hitting a report excessive of 1.9 billion consumer visits in Could this yr, the generative AI chatbot witnessed 1.7 billion consumer visits in June and only one.5 billion in July.


The report additionally referred to a consumer on X who argued a significant cause for the decline in visits to ChatGPT web site could possibly be API cannibalisation whereby most firms are prohibiting staff from utilizing the generative AI chatbot for work, however are permitting them to make use of the API to leverage the big language mannequin (LLM) in different workflows. 


However Analytics India Journal additional acknowledged: “It’s fairly presumptuous of OpenAI to imagine that the decline in customers is simply because folks have began utilizing the API to construct their very own merchandise. Apparently, the twist over right here is the rise of open supply LLM fashions. Meta’s Llama 2, in partnership with Microsoft, is permitting folks to make use of the mannequin for industrial functions. 


“So, instead of going for what OpenAI offers, which is a paid, proprietary, and restricted version, why would people not go for an easily modifiable Llama 2?”


One other problem for the corporate is the graphics processing unit (GPU) scarcity. Altman earlier had underscored lack of GPUs in the marketplace affected the corporate’s capability to enhance and develop new fashions. Earlier, media reviews acknowledged that the corporate had filed for a trademark utility for ‘GPT-5’ 0which additional signifies that the corporate needs to maintain on coaching fashions.  


ChatGPT would additionally face a problem from Elon Musk who’s constructing a rival chatbot. “Interestingly, his idea of building a ‘TruthGPT’, which is not as politically biased as ChatGPT, was found interesting by a lot of people,” the report mentioned. He even purchased 10,000 NVIDIA GPUs to get forward. On the brighter facet, OpenAI’s shift to a paid model could have raked in plenty of moolah however “the financial numbers on this are still hazy”.

Even then, if this LLM-focused firm goes into IPO, it could be purchased out by greater firms. Arguably, this could be one of many exit methods for the traders, the report added.


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