New Report Warns of $5 Billion In Losses For OpenAI In 2024

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Sajjad

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ChatGPT’s launch changed the way people perceived technology. Within a few weeks, tens of millions worldwide were using this chatbot due to its immense popularity.

However, we did not know that the costs of training the AI models and running the servers that host them are so high. There have been five billion euros in losses due to the significant expenses.

Why it matters: The company’s work on ChatGPT has received global praise, with some entrepreneurs even comparing it to the impact of Apple’s original iPhone.

As reported by The Information, OpenAI may be headed toward a terrible fate despite its recent success. The estimated figures come from data obtained through numerous industry figures and confidential internal financial accounts.

Since it was founded in 2015, OpenAI has expanded both in terms of size and reach thanks to several investments, with Microsoft contributing billions of dollars to the AI company over time.

The company has always been improving, thanks to numerous projects, such as the latest ChatGPT-4o mini. Therefore, it has to cover the cost of these models. In addition, it gives wages come out to around $800,000 annually.

It is now known that OpenAI has spent as much as $8.5 billion, of which $7 billion was allocated to large linguistic model (LLM) training and inference, and the remaining $1.5 billion was used for personnel training.

Furthermore, from the information, we know that around $700,000 is required per day to run ChatGPT. Even though the company is so famous, it still can’t keep up with its huge expenses.

If everything keeps going like this, Open AI will suffer a loss of $5 billion by the end of the fiscal year. The business model is not very successful, and the company could go bankrupt at this pace.