Is ChatGPT going bankrupt? What we know so far
According to the report ChatGPT saw a decline of users in July by 9.6 per cent. Photo: dailyO
After its introduction in November 2022, ChatGPT, developed by OpenAI, swiftly emerged as the most rapidly expanding application ever. Its debut stirred a mix of enthusiasm and concern regarding its potential to supplant humans in various occupations. However, a recent analysis from Analytics India Magazine has indicated that OpenAI could potentially face financial insolvency by the end of 2024.
What
- OpenAI, under the leadership of Sam Altman, is currently facing the looming possibility of a financial crisis, as detailed in a report from Analytics India Magazine.
- The report highlights that the operation of a single AI service, such as ChatGPT, costs OpenAI approximately $700,000 (approx Rs 5.80 crore) each day.
- This operational cost is contributing to the financial strain on the company.
Since ChatGPT is a free platform, monetisation has always been an issue. Even though Altman has made efforts to monetise GPT-3.5 and GPT-4, OpenAI has yet to generate sufficient revenue to reach the point of breaking even.
'Users declined'
The report presented data indicating that the ChatGPT website experienced a reduction in user activity during June and July in contrast to May.
- The same report also shows that ChatGPT's web traffic has decreased for the second consecutive month.
- In July, there was a decline of 9.6 per cent, following a 9.7 per cent drop in June.
- In terms of user numbers, July exhibited a 12 per cent decrease, with 1.5 billion users, as opposed to June's 1.7 billion users.
READ MORE: ChatGPT app is soon launching on Android, but research says the generative AI is slowing down
The report says that OpenAI is not profitable yet. In May, its losses doubled to $540 million ever since it started developing ChatGPT.
The company's current stability might be attributed to Microsoft's $10 billion investment, that they gave to them in January 2023.
However, the ChatGPT officials anticipate an annual revenue of $200 million in 2023 and aim to reach $1 billion in 2024, which the reports claims to be slightly too ambitious and unachievable.
Some experts disagree
Tarun Mehta, co-founder & CEO of AtherEnergy, said that OpenAI will be 'fine'.
To support this claim, Mehta referred to Indian startups, which have now evolved into established companies, such as Flipkart, Meesho, Ola, Paytm, and Swiggy. According to him, these companies also went through periods of spending significant amounts of money for extended periods, similar to the situation being discussed.
Recently, Zomato had its first-ever 2 crore profit.
This post seems to be going around.
— Tarun Mehta (@tarunsmehta) August 13, 2023
People are sharing that Open AI might go bankrupt next year because it burns through 5.8cr PER DAY!
Yeah, right.
5.8cr/day is ~2000cr/year = $250M/year.
Your friendly neighbourhood Swiggy, Meesho, Paytm, Ola, Flipkart have burnt through… pic.twitter.com/Nx4babff2F