OpenAI could lose up to $5 billion this year due to the massive costs of using AI products like ChatGPT — and will likely need to raise more money within the next 12 months, according to a report published Thursday.
CEO Sam Altman’s firm — valued at $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 by The Information.
The huge sum includes nearly $4 billion earmarked for leasing server capacity from Microsoft required to maintain ChatGPT and the major language models that power the chatbot, the report said.
About $3 billion more is needed to cover the cost of training AI models with new data.
This includes OpenAI’s spending on agreements with publishers to secure permission to use their copyrighted content, such as the firm’s deal with The Post’s News Corp.
Additionally, OpenAI is estimated to spend another $1.5 billion annually on labor costs for about 1,500 employees, according to The Information.
The firm, which received a $13 billion investment from Microsoft, has spent heavily to retain talent as it looks to fend 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 paper said.
The estimated labor costs were described as an “estimate” 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 make gains in the near future as it tries to maintain its edge against AI-generating rivals like Google and Meta.
“Investors should ask: What is their gap? Unique technology?” Gary Marcus, an artificial intelligence expert and NYU professor, wrote in X.
“What’s their path to profitability when Meta is giving away similar technology for free? Do they have a killer app? Will the technology ever be reliable? What is real and what is just demonstration?” 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 real-world responses to a large set of user requests.
Last November, Altman announced that the chatbot had 100 million weekly users.
The company released its latest AI model, called the GPT-4o, in May.
The model is able to hold 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 after Johansson attacked the Altman firm for using a voice that sounded like her for the feature – despite the fact that she had declined her request to use her own voice.
OpenAI said it would stop using the voice, called “Sky”, after its public criticism.
Altman’s firm faces another ongoing headache in the form of former employees who have accused the company of ignoring security concerns while pushing for faster AI development.
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