The future may not seem good for OpenAI, the startup that made artificial intelligence (AI) well-known. If it keeps burning funds at the present rate, the Sam Altman-led firm might declare bankruptcy as soon as the end of 2024, according to a study by Analytics India Magazine.
The article stated that just one of its AI services, ChatGPT, runs at a daily cost of approximately $700,000 (Rs 5.8 crore). According to SimilarWeb, ChatGPT had a 12% decrease in users month over month in July, from 1.7 billion users in June to 1.5 billion users in July.
According to the research, it was much too early for any major AI startup, including OpenAI, Anthropic, or Inflection, to consider doing an initial public offering (IPO) in order to raise more capital for the company. According to a research from Investopedia, a successful IPO requires at least 10 years in operation and $100 million in sales.
Currently, OpenAI is surviving the harsh seas thanks in large part to Microsoft’s $10 billion investment. However, given the company’s dwindling user base and its projected yearly income of $200 million in 2023 and $1 billion in 2024, which appears too good to be true, the losses are only predicted to increase. Since the AI chatbot’s development began in May, the company’s losses have increased by a factor of two to $540 million.
The paper makes the case that API (Application Programming Interface) cannibalization is one of the reasons ChatGPT is unable to produce income.
