OpenAI could lose as much as $5 billion this year due to the massive costs of running AI products like ChatGPT — and likely needs to raise more money within the next 12 months, according to an eyebrow-raising report published Thursday.
CEO Sam Altman’s firm — worth $80 billion as of February — is on track to spend as much as $7 billion this year to train and operate its popular chatbot, according to an analysis conducted by The Information.
The whopping sum includes nearly $4 billion earmarked for renting server capacity from Microsoft that’s required to maintain ChatGPT and the large-language models that power the chatbot, the report said.
As much as $3 billion more is needed to cover the cost of training the AI models with new data.
That includes OpenAI’s spending on deals with publishers to secure permission for use of their copyrighted content, such as the firm’s agreement with The Post’s parent News Corp.
Additionally, OpenAI is estimated to spend another $1.5 billion per year on labor costs for some 1,500 employees, according to The Information.
The firm, which has received a $13 billion investment from Microsoft, has spent heavily to retain talent as it looks to stave off Google and other AI rivals.
OpenAI did not immediately return The Post’s request for comment on the report.
The estimates were based on previously undisclosed data and interviews with “people involved in the business,” the outlet said.
The estimated spending on labor costs was described as a “guesstimate” based on past projections and its previous reporting on OpenAI’s hiring efforts.
If accurate, the analysis could raise questions about OpenAI’s ability to achieve profitability in the near future as it scrambles to maintain its edge against generative AI rivals such as Google and Meta.
“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 demo?” Marcus added.
Earlier this week, billionaire Mark Zuckerberg’s Meta released its own AI model, called Llama 3.1, as an open-source framework — meaning developers can access the code for free.
OpenAI secured an early lead in the AI race due to the popularity of ChatGPT, which wowed users with its lifelike responses to a huge array of user prompts.
Last November, Altman announced that the chatbot had 100 million weekly users.
The company released its most recent AI model, dubbed GPT-4o, in May.
The model is capable of holding realistic voice conversations with users — a feature that drew immediate comparisons to “Her,” the 2013 film starring actress Scarlett Johansson as an AI program.
After its launch, OpenAI came under fire as Johansson blasted Altman the firm for using a voice that sounded similar to hers for the feature — despite the fact that she had rejected its request to use her voice.
OpenAI said it would pause use of the voice, named “Sky,” following her public criticism.
Altman’s firm faces another ongoing headache in the form of former employees who have accused the company of ignoring safety concerns while pushing for faster AI development.
Source: OpenAI may reportedly lose $5B this year alone on massive ChatGPT costs
