OpenAI's financial outlook appears uncertain as reports indicate that the operation of ChatGPT costs the organization a staggering USD 700,000 (approximately Rs 5 crore) per day. These expenses have contributed to OpenAI's losses doubling to USD 540 million since the launch of ChatGPT in November 2022. This has raised concerns about the company's potential bankruptcy by 2024 due to the substantial operational costs associated with ChatGPT and other contributing factors.
A Decline in Userbase and Financial Struggles
Analytics India Magazine highlights a decline in ChatGPT's user base, with a 12% drop in active users from June to July. While the AI chatbot had around 1.7 billion users in June 2023, this number has decreased to 1.5 billion in July 2023. The decline is attributed to various factors, including 'API cannibalisation' where workplaces discourage the use of ChatGPT in favour of in-house AI models derived from ChatGPT's API.
ChatGPT's operation costs put OpenAI at risk
Challenges and Microsoft's Support
Although Microsoft's USD 10 billion investment has provided some financial support, OpenAI is far from achieving its targeted USD 1 billion revenue by the end of 2024. The company has increased losses, coupled with investments from backers, raise concerns about its financial sustainability. The expansion of offices in London and recruitment for high-paying roles are further contributing to the operational costs.
Implications for OpenAI's Future
The operational cost of USD 700,000 per day is currently being sustained by Microsoft and other investors. However, OpenAI's financial health hinges on the company's ability to turn profitable shortly. Without achieving profitability, the organization's financial situation could lead to potential bankruptcy.
Hints of GPT-5
Recent reports indicate that OpenAI has filed a trademark application for 'GPT-5', suggesting a potential successor to ChatGPT. The application hints at plans for a new language model, following the pattern observed with GPT-3.5 and GPT-4 trademark filings. The trademark application does not provide details about the potential capabilities or timeline for GPT-5's launch.
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