OpenAI spends $700,000 daily on ChatGPT; Sam Altman's company may go bankrupt in 2024: Report

OpenAI spends about $700,000 everyday just to run ChatGPT, said a report published in Analytics India Magazine. The report also mentioned that Microsoft and other investors are using their own money to cover the expenses and that the companies would cut down the investment if Sam Altman's company doesn't turn profitable soon.

“Microsoft’s $10 billion investment in OpenAI is possibly keeping the company afloat at the moment. But on the other hand, OpenAI projected an annual revenue of $200 million in 2023, and expects to reach $1 billion in 2024, which seems to be a long shot since the losses are only mounting,”the report said, and noted that in May this year, OpenAI’s losses doubled to $540 million ever since it started developing ChatGPT.

Also Read: South Korea fines OpenAI's ChatGPT and Meta Platform for data breaches and privacy violations

The report has also mentioned that the company may go bankrupt by the end of 2024. The number of users visiting the platform has also reduced considerably. As per SimilarWeb’s data after hitting a record high of 1.9 billion user visits in May this year, the generative AI chatbot witnessed 1.7 billion user visits in June and only 1.5 billion in July.

Some feel that the drop in users is due to API cannibalisation wherein most companies are prohibiting employees from using the generative AI chatbot for work, but are allowing them to use the API to leverage the large language model (LLM) in other workflows. However, the report argued that there is a rise in open source LLM models. Meta's Llama2 which is in partnership with Microsoft is allowing people to use the model for commercial purposes.

As per the report, another challenge that Sam Altman is facing is the shortage of Graphics Processing Unit. Altman earlier had said that the lack of GPUs on the market affected the company's capacity to improve and develop new models. Meanwhile, Elon Musk is also building a rival chat bot 'TruthGPT' which poses a threat to ChatGPT