- ChatGPT‘s rapid growth threatens closure due to financial difficulties and trademark application.
- OpenAI faces daily operating costs of $700,000, potentially harming revenue.
- Apple’s AI chatbot venture and Musk’s xAI raise OpenAI’s challenges.
Since its release in November 2022, OpenAI’s ChatGPT has experienced the quickest growth. However, the app has faced financial difficulties and may go out of business by the end of 2024.
According to the article, concerns regarding OpenAI’s decision to submit a trademark application on GPT resulted in forecasts that users could eventually stop using it.
Risk of going Bankrupt
A portion of ChatGPT’s user base reduction between June and July compared to May was brought on by API cannibalization, in which employers forbade employees from using ChatGPT for work-related activities but permitted the large language model (LLM) to be included in other processes.
Operating expenditures for OpenAI are almost $700,000 per day, and continuing these costs in the absence of revenue could be harmful. The company had projected $200 million in revenue for 2023 and an ambitious $1 billion in 2024, more than doubling its earlier losses of $540 million for 2023.
Achieving these goals, however, seemed unlikely given the escalating losses, and difficulties arising from ongoing Graphics Processing Unit (GPU) shortages also hampered model development.
The recent trademark filing for “GPT-5” by OpenAI and its ongoing model training initiatives demonstrate the company’s commitment to making progress in this area. But according to the research, OpenAI would be in financial trouble by the end of 2024 if more funding is not quickly secured.
Elon Musk’s xAI promises and Apple’s impending foray into the AI-powered chatbot market have made things more difficult for OpenAI. To balance its expansion and initial non-profit objective, OpenAI has transformed into a “capped-profit” business and raised $10 billion from Microsoft.
CEO Sam Altman has no imminent plans to go public because of uncertainty regarding whether judgments involving superintelligence will meet investor expectations.
