OpenAI and ChatGPT: financial situation is (very) complicated

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Artificial intelligence is experiencing a meteoric rise, but its development is accompanied by exorbitant costs. OpenAI, the publisher of the famous ChatGPT, is currently experiencing this bitter experience. The company is reportedly in a precarious financial situation, with losses running into billions of dollars.

Losses of 5 billion dollars…

According to the very well-informed The Information, the firm led by Sam Altman could post a deficit of up to $5 billion this year. The main reason is $7 billion in spending to train and run its models, including ChatGPT. According to a study conducted by analysts at SemiAnalysis in 2023, running the chatbot would cost OpenAI around $700,000 per day in computing costs.

These costs include renting Microsoft’s server capacity needed to maintain ChatGPT. That’s about $4 billion. Another $3 billion or so covers the cost of training AI models with new data, including agreements with publishers for use of their copyrighted content. In recent months, OpenAI has been busy securing deals with news outlets like The Financial Times and Le Monde.

The company is expected to spend $1.5 billion annually on labor costs for its 1,500 employees, the outlet continues. These estimates were made possible by undisclosed data and interviews with ” people involved in the company .”

OpenAI spends heavily to remain the leader

The Redmond firm’s total investment in OpenAI, at $13 billion, does not seem to be enough to cover the start-up’s colossal expenses. ChatGPT initially democratized generative AI models, and the company intends to remain the leader in the sector. It is injecting a lot of money into its models and is constantly developing new products, such as SearchGPT.

Sam Altman has also mentioned, on several occasions, his ultimate ambition to design general artificial intelligence, that is to say an AI capable of reasoning like a human about any task. A project that requires huge sums. At the same time, OpenAI must face a resurgence of competing players. Its paid offering, therefore, attracts fewer customers.

While The Information suggests that the company could go bankrupt, it seems unlikely that such a situation will occur. A few months ago, OpenAI was valued at around $80 billion, making it the third most valuable start-up in the world behind ByteDance and SpaceX.

Furthermore, some analysts estimate that the relative cost of training 8217;AI, inference and chip manufacturing will decline over time. Sam Altman even has the ambition to raise $7,000 billion to develop chips, which would allow him to no longer depend on Nvidia and the costs imposed by it.

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