Someone needs to ask ChatGPT for a cheaper solution to artificial intelligence.
An analysis conducted by The Information claimss OpenAI could lose as much as $5 billion this year due to the massive costs of running AI products like ChatGPT.
The company, whose market value is estimated at $80 billion as of February, is likely to spend as much as $7 billion this year to train and operate its chatbot. That means more money needs to be raised, even as a path to profitability gets murkier, thanks to increasing competition.
The OpenAI costs include renting server capacity from Microsoft that’s required to maintain ChatGPT, the report said. That accounts for about $4 billion.
As much as $3 billion more covers the cost of training the AI models with new data, including deals with publishers for use of their copyrighted content.
OpenAI is estimated to spend another $1.5 billion per year on labor costs for its 1,500 employees, according to The Information.
The estimates were based on previously undisclosed data and interviews with “people involved in the business,” the outlet said.
“Investors should ask: What is their moat? Unique tech?” Gary Marcus, an artificial intelligence expert and NYU professor, wrote on X.
“What is their route in profitability when Meta is giving away similar tech for free? Do they have a killer app? Will the tech ever be reliable? What is real and what is just a demo?” Marcus added.
Eugen Boglaru is an AI aficionado covering the fascinating and rapidly advancing field of Artificial Intelligence. From machine learning breakthroughs to ethical considerations, Eugen provides readers with a deep dive into the world of AI, demystifying complex concepts and exploring the transformative impact of intelligent technologies.
