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Generative AI makes billions of dollars in revenue but more is needed to cover the operational costs.
The average PC user will probably think 'ChatGPT' whenever generative AI is mentioned, as it's arguably the world's most well-known and widely used LLM system. An investigative report into the financial status of its creator, OpenAI, suggests that despite its popularity, the immense costs of training the AI models and running the servers that host them are so high that the company is on track to make an operational loss of $5 billion.
That's according to The Information (via Window's Central), which based its projection on numbers garnered from unreleased internal financial statements and various industry figures. Founded in 2015, OpenAI has grown in size and scope due to multiple investments, with Microsoft pouring billions of dollars into the AI firm over the years.
The most recent injection of cash, $10 billion in early 2023, was rumoured to include a 75% slice of OpenAI’s profits and a 49% stake in the company, as well as integrating ChatGPT into Bing and other Microsoft systems. In return, as well as the investment, OpenAI is thought to get access to Azure cloud servers and a substantially reduced rate.
However, The Information's report suggests that OpenAI just isn't making anywhere near enough money and could be on track to post an operational loss of $5 billion by the end of the financial year.
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The average PC user will probably think 'ChatGPT' whenever generative AI is mentioned, as it's arguably the world's most well-known and widely used LLM system. An investigative report into the financial status of its creator, OpenAI, suggests that despite its popularity, the immense costs of training the AI models and running the servers that host them are so high that the company is on track to make an operational loss of $5 billion.
That's according to The Information (via Window's Central), which based its projection on numbers garnered from unreleased internal financial statements and various industry figures. Founded in 2015, OpenAI has grown in size and scope due to multiple investments, with Microsoft pouring billions of dollars into the AI firm over the years.
The most recent injection of cash, $10 billion in early 2023, was rumoured to include a 75% slice of OpenAI’s profits and a 49% stake in the company, as well as integrating ChatGPT into Bing and other Microsoft systems. In return, as well as the investment, OpenAI is thought to get access to Azure cloud servers and a substantially reduced rate.
However, The Information's report suggests that OpenAI just isn't making anywhere near enough money and could be on track to post an operational loss of $5 billion by the end of the financial year.
Report claims that OpenAI has burned through $8.5 billion on AI training and staffing, and could be on track to make a $5 billion loss
Generative AI makes billions of dollars in revenue but more is needed to cover the operational costs.
