Shocking Revelation: OpenAI Teetering on Bankruptcy by Late 2024! Daily Cost of ChatGPT Staggering at Rs 5.80 Crore!

OpenAI, a pioneering AI studio that sparked discussions about AI among individuals without technical backgrounds, is presently facing significant challenges. In its endeavor to establish itself as a frontrunner in generative AI through its AI chatbot, ChatGPT, the AI development studio led by Sam Altman is on the verge of a potential financial crisis, as outlined in a report by Analytics India Magazine.

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Allegedly, the operational costs associated with maintaining a single AI service, ChatGPT, for OpenAI, are estimated to be around $700,000 (equivalent to Rs 5.80 crore) per day. This has led to a swift depletion of OpenAI’s financial reserves under the guidance of Sam Altman. Despite endeavors to monetize GPT-3.5 and GPT-4, the company has not yet achieved a revenue stream sufficient to cover its expenditures.

While OpenAI and ChatGPT experienced a strong start with a remarkable surge in user numbers during their initial phases, there has been a gradual decrease in user engagement over recent months. As per SimilarWeb’s data, the user base experienced a 12 percent decline in July 2023 compared to June, dropping from 1.7 billion users to 1.5 billion users. It’s important to note that this data solely considers users who visited the ChatGPT website and does not encompass those utilizing OpenAI’s APIs.

OpenAI’s APIs have also contributed to the complex situation. Many companies, previously hesitant about their staff using ChatGPT, have now started obtaining access to OpenAI’s APIs. This enables them to create their own AI chatbots tailored to their specific workflows.

Nonetheless, as Analytics India Magazine underscores, the core issue lies in the availability of several open-source large language model (LLM) frameworks. These frameworks can be used and adapted freely, without being bound by licensing constraints. Consequently, organizations can meticulously modify these frameworks to suit their highly particular use cases.

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In December 2022, a few months after its launch, Altman publicly acknowledged the considerable expenses tied to operating the AI company and ChatGPT. This realization led to the decision to implement strategies for generating revenue. Currently, these costs are being covered by recent investors, with Microsoft among them. However, the ongoing operational costs, combined with OpenAI’s slower revenue generation, present a significant challenge unless the company can make a turnaround.

Although giants like Google and Meta are typically seen as OpenAI’s primary rivals, it’s important to also pay attention to Elon Musk and his xAI project. Musk, who has been engaged in AI due to his connection with Tesla, has made noteworthy progress in the AI field since ChatGPT’s viral success. Musk publicly announced his intention to create an alternative chatbot named “TruthGPT.” This project aims to address biases and unrealistic tendencies linked with OpenAI’s ChatGPT. Additionally, reports suggest that Musk invested more than $10 million in acquiring over 10,000 NVIDIA GPUs for his AI initiative. He has also made significant investments in human resources and data center operations to facilitate the training of xAI’s algorithms.


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