OpenAI faces bankruptcy risk

August 15, 2023

Analytics India Magazine reported that ChatGPT website has seen a continuous user decline in the first six months of the year….reports Asian Lite News

ChatGPT maker OpenAI is likely to go bankrupt by the end of 2024 if it doesn’t get more funding soon, according to media reports.

Analytics India Magazine reported that ChatGPT website has seen a continuous user decline in the first six months of the year.

The users declined to 1.5 billion in July from 1.7 billion in June and 1.9 billion in May, revealed data from analytics company SimilarWeb. This also doesn’t include APIs or the ChatGPT mobile app.

While one theory holds that in May students were out of school, the other says that people started building their own bots, instead of using the original offering.

“I am no longer allowed to use ChatGPT at work, but we have developed our own internal model based on ChatGPT,” a user said in a tweet.

Another issue is that after OpenAI developed ChatGPT, which has created a ruckus in the job market over fears that it may replace human creativity, its losses have doubled to around $540 million last year, according to a report by The Information in May.

This comes even as ChatGPT reportedly costs a whopping $700,000 (Rs 5.80 crore) per day to operate.

Even OpenAI CEO Sam Altman had admitted in a tweet that “compute costs are eye-watering”.

A recent report by Investopedia claimed that it is too early for any AI leading company, like OpenAI, Anthropic, or Inflection, to head into the initial public offering (IPO) market.

“It is because it takes at least 10 years of operation and $100 million in revenue for an IPO to be successful,” the report said.

In addition, billionaire Elon Musk is also increasing pressure with claims of building a rival chatbot.

While Microsoft-backed OpenAI has projected an annual revenue of $200 million in 2023, and aims to reach $1 billion in 2024, its losses are mounting. It is majorly surviving on Microsoft’s $10 billion investment.

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