OpenAI is struggling with revenue and cannot stand on its own two feet. Investors keep the company afloat with little prospect of immediate improvement.

ChatGPT makes OpenAI poorer, not richer. The company has to pay about $700,000 a day to keep ChatGPT running with GPT 3.5. A query costs about 36 cents. The costs for Dall-E and GPT 4 were not taken into account. Although OpenAI offers some paid plans for ChatGPT, the revenue doesn’t cover the costs. According to WindowsCentral, OpenAI has already absorbed $540 million in losses since the launch of ChatGPT.

tactical problems

The company survives thanks to investors, including Microsoft. However, to keep these investors on board, OpenAI needs to provide perspective. At the moment the stars are not optimal in this regard. OpenAI suffers from several main problems:

• GPT-4 seems to be getting dumber: Researchers found last month that the new transformer model can perform less today than it did in March this year. It’s unclear why, as OpenAI is trying to add new features to the model.
• GPUs don’t roll off the assembly line fast enough: OpenAI needs AI accelerators to perform inference or train new models at scale. A lack of such chips hampers progress.
• OpenAI includes two missions: OpenAI co-founder and CEO Sam Altman remains true to his original mission, so-called General artificial intelligence to do: AI that is really intelligent. However, OpenAI needs to generate a profit for its investors. These are two different goals.

Other reports on this topic also mention that the number of ChatGPT users has dropped by around 200,000 in the last few months. These numbers relate solely to web usage and therefore not to queries via APIs. In the meantime, the ChatGPT app for Android has come onto the market and has already had more than five million downloads. It is very likely that this app’s API calls will more than make up for the loss of online users at this point.

The result is still noticeable: OpenAI is in financially dirty papers. That seems almost unthinkable for a company that has made such a global impact in such a short amount of time and almost single-handedly rushed the spotlight to AI.

With or without OpenAI

On the other hand, OpenAI started the hype around generative AI, but this hype train will continue to roll without the company. From a financial standpoint, OpenAI must either continue to develop new technologies that are relevant to investors, or embark on a path to profitability with the technology it has in store today.

There’s a chance that OpenAI has overdone itself a bit. Perhaps large-scale inference is currently still too expensive, and it will take several generations of chips before the business model behind ChatGPT is truly profitable. On the other hand, investors are unlikely to abandon OpenAI and there are still plenty of opportunities to monetize GPT-4 and variants.