Wow: OpenAI Lost Over Half A Billion Dollars Last Year

Dean Burton
OpenAI lost over half a billion dollars in 2022, but what can we attribute these costs to and what are some predictions for OpenAI in the coming years?
OpenAI Lost Over Half A Billion Dollars Last Year. Photo: Jonathan Kemper | Unsplash

A new report reveals the actual cost of OpenAI’s ChatGPT.

With access to multiple people in the know about OpenAI’s financials, the report by The Information reveals losses of $540 million in 2022.

It turns out that ChatGPT is not cheap to build and run, and costs continue to mount due to the significant consumption of computer resources it requires to generate answers to users’ questions.

​​Dylan Patel, chief analyst at consulting firm SemiAnalysis, told The Information that he believed ChatGPT could cost OpenAI around $700,000 per day to use given the costs involved with computing power.

The Real Cost Of Artificial Intelligence 

The Real Cost Of Artificial Intelligence. Photo: Levart Photographer | Unsplash

OpenAI secured a billion-dollar investment from Microsoft in 2019 and has since secured its financial position by extending its partnership with Microsoft which resulted in a multi-year, multi-billion-dollar investment.

Even with this backing, OpenAI costs continue to rise and there’s no indication of them slowing.

OpenAI CEO Sam Altman hinted at rising costs, revealing that it was “going to be the most capital-intensive startup in Silicon Valley history,” The Information reported.

OpenAI took a hit during the development of its AI chat product (ChatGPT) and losses mounted as the company trained its language models. Many of its losses can also be attributed to the high cost of bringing onboard technical talent to help advance its AI progress.  

The report indicated that Altman has “privately suggested” that OpenAI could try to raise around $100 billion in the coming years as it works towards developing artificial general intelligence (AGI) – An AI that can learn to accomplish any intellectual task that human beings or other animals can perform.

Rising Popularity For AI Technology 

Rising Popularity For AI Technology In The Workplace. Photo: Alex Kotliarskyi | Unsplash

Many people have found personal uses for AI technology, but demand for AI in the workplace is also on an upward trajectory.

The online learning platform Udemy compiled a Global Workplace Learning Index in which the company analyzes its course consumption to see what skills businesses are the most interested in. ChatGPT came out on top, with a 4,419% increase in global topic consumption from the fourth quarter of 2022. This indicates a need for a clear understanding of ChatGPT in today’s fast-paced world. 

Demand has increased far quicker than anyone could have predicted and OpenAI seems to be scrambling to generate revenue and recover costs. 

Although ChatGPT started as a free ‘research project’, in February 2023 it started charging its US-based users $20 a month for a ‘Pro Version’ of its platform. 

According to Reuters, OpenAI’s owners predict 1 billion dollars in revenue by 2024. This is much higher than the initial estimate of $200 million.

Much of this revenue comes from API customers using OpenAI’s language models, such as the social media app Snap, which plans to launch its own AI-based chatbot for paying users. 

It’s clear that businesses are increasingly viewing ChatGPT as a lucrative opportunity and we’ll likely see many more AI-based programs as advancements by OpenAI progress. 

As the whirlwind world of AI continues to whip up interest, it’s hard to predict just how much further developments will actually cost OpenAI in the coming years. 

But based on increased interest from investors, its use by average consumers and businesses jumping on the ChatGPT bandwagon, one message is crystal clear; ChatGPT is likely here to stay and things are just getting started. 


Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts