According to a report, by Analytics India Magazine, OpenAI, the company behind ChatGPT is at risk of facing difficulties by the end of 2024 if it does not receive funding. The magazine states that there has been a decline in the number of users visiting the ChatGPT website during the half of 2023. In May there were 1.9 billion users. This number dropped to 1.5 billion by July. The combination of losses, which amounted to $540 million last year and high operational costs further exacerbates the challenge, for OpenAI.
Reports suggest that OpenAI, the visionary behind ChatGPT, could find itself in financial straits by the close of 2024 if it fails to secure additional funding imminently. An analysis by Analytics India Magazine has illuminated a consistent wane in user engagement on the ChatGPT website during the initial half of this year.
According to statistics from an esteemed analytics firm, user numbers dwindled from a robust 1.9 billion in May to 1.7 billion in June, subsequently plummeting to 1.5 billion in July. Worth noting is that these figures exclude users of the APIs and the ChatGPT mobile application. The decline in May is theorized by some to be linked to students being out of school, whereas others posit that users have begun to forge their own automated conversational agents rather than relying on the native ChatGPT.
The tribulations faced by OpenAI are compounded by severe financial setbacks incurred since the launch of ChatGPT. Sources indicate that these losses swelled twofold to an estimated $540 million in the preceding year, as reported by the media. The operational costs tethered to ChatGPT are also far from insignificant, amounting to a staggering daily outlay of around $700,000 (equivalent to approximately Rs 5.80 crore).
Sam Altman, the CEO at OpenAI, candidly acknowledged the exorbitant compute expenses in a tweet, aptly labeling them as “eye-watering.”
Furthermore, there is a burgeoning dilemma faced by AI trailblazers like OpenAI, Anthropic, and Inflection, who are contemplating a foray into the Initial Public Offering (IPO) market. Industry insiders contend that prosperous IPOs generally necessitate a decade of establishment and a revenue benchmark of $100 million at the very least. This is compounded by the mounting pressure arising from Elon Musk’s assertions of developing a rival chatbot.
Despite projecting a promising annual revenue projection of $200 million in 2023, with aspirations to reach a commendable $1 billion in 2024, OpenAI finds itself grappling with soaring deficits. In essence, its viability hinges significantly on a substantial $10 billion investment infusion from its primary benefactor, Microsoft.
