Following its announcement last year, ChatGPT quickly rose to become one of the most popular AI platforms. But in recent months, the initially ecstatic growth in numbers has come to an end.
The future may not look good for OpenAI, the startup that made artificial intelligence (AI) well-known. If it keeps burning funds at the current rate, the Sam Altman-led company could declare bankruptcy as soon as the end of 2024, according to a study by Analytics India Magazine.
The article stated that just one of its AI services, ChatGPT, runs at a daily cost of approximately $700,000 (Rs 5.8 crore). Despite Altman’s efforts to monetize GPT3.5 and GPT-4, the company is still a long way from profitability, which is still a pipe dream.
Following its announcement last year, ChatGPT quickly rose to become one of the most popular AI platforms. The company’s hopes of making a respectable profit, however, have been further dented by the initial euphoric decline in numbers that has occurred in recent months.
According to SimilarWeb, ChatGPT had a 12% decrease in users month over month in July, from 1.7 billion users in June to 1.5 billion users in July.
No IPO route is currently visible.
According to the research, it was way too early for any major AI startup, including OpenAI, Anthropic, or Inflection, to consider conducting an initial public offering (IPO) in order to raise more capital for the company. According to a report from Investopedia, a successful IPO requires at least 10 years in operation and $100 million in revenue.
Currently, OpenAI is surviving the harsh seas thanks in large part to Microsoft’s $10 billion investment. However, given the company’s dwindling user base and its projected yearly income of $200 million in 2023 and $1 billion in 2024, which appears too good to be true, the losses are only predicted to increase. Since the AI chatbot’s development began in May, the company’s losses have increased by a factor of two to $540 million.
The paper makes the case that API (Application Programming Interface) cannibalization is one of the reasons ChatGPT is unable to produce income. Companies forbid employees from using ChatGPT for business purposes, but they nevertheless use the API to integrate the large language model (LLM) into various workflows. A notable approach to allow one application to provide services to other programs is through an API.
The lack of enterprise-level GPUs (Graphics Processing Units) on the market has added to OpenAI’s issues as a result of the US-China tech spat. Altman has frequently stated that the company’s inability to train new models was being hampered by the lack of GPUs.
