Without new investments, OpenAI could go bankrupt within 12 months

The startup OpenAI, which developed the chatbot with generative artificial intelligence ChatGPT, the release of which began a boom in the AI ​​market, annually spends billions of dollars on technology development and personnel, writes The Information resource. According to some analysts, due to huge expenses, the company could be on the verge of bankruptcy within 12 months.

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It was previously reported that the company spends about $700 thousand daily just to support the functioning of ChatGPT. And this amount will continue to grow. According to The Information, based on previously undisclosed financial data, OpenAI will spend $7 billion this year on training AI models, while its personnel costs will be $1.5 billion. The publication writes that OpenAI’s losses for the year could amount to $5 billion, and if it doesn’t raise additional capital, it could run out of money in 12 months.

«Investors must ask: what is their benefit? Unique technology? What is its path to profitability when Meta✴ is giving away similar technologies for free?” writes one of the experts.

This is not the first publication that OpenAI may face financial problems. Last year, The Economic Times wrote that the high costs of training AI models could lead a company to bankruptcy.

OpenAI receives up to $2 billion a year in revenue from using ChatGPT and about $1 billion for providing companies with access to large language models (LLM), but this barely covers its operating costs, The Information reported. It should be noted that this does not bother OpenAI CEO Sam Altman at all. “I don’t care if we spend $50 billion a year, we’re building strong artificial intelligence (AGI) and it’s worth it,” he once said.

The Information pointed out another problem that threatens OpenAI’s business decline: a growing number of industry analysts who consider generative AI a bubble that will burst within the next 12 months.

Some investors have also questioned how long Nvidia can continue its massive growth, which has propelled it to the third-largest company in the world by market value, as the generative AI frenzy continues despite a failure to recoup investments, hallucinations and need in more data centers to handle AI workloads.