OpenAI lost $540 million last year due to GPU purchases, electricity, and labor costs

Acquiring intelligence from The Information website, it has been alleged that OpenAI’s accumulated losses throughout 2022 amounted to $540 million, doubling in comparison to the previous year of 2021.

Despite ChatGPT swiftly captivating a user base surpassing hundreds of millions and subsequently introducing a premium version, the extensive usage of GPUs required for accelerated computations significantly amplified the underlying costs for OpenAI to maintain its service offerings.

Aside from the escalating costs of procuring GPUs and electricity, the persistent recruitment and employment of technical talent have also contributed to the expansion of OpenAI’s expenditures. Thus, accepting billions of dollars in investment from Microsoft and substantially integrating with Microsoft’s Azure cloud services platform aimed to mitigate operational losses.

As articulated by OpenAI CEO Sam Altman, the ambition for the upcoming years is to actualize a $100 billion fundraising initiative, thereby fostering the advancement of a more expansive range of general artificial intelligence technologies.

OpenAI has secured a new funding round worth $300 million, elevating its market valuation to approximately $27 billion to $29 billion. Participants in this latest round include venture capital firms such as Tiger Global, Sequoia Capital, a16z, Thrive, and K2 Global. The round also encompasses the Founders Fund, established by PayPal co-founder Peter Thiel.

Prior to this, OpenAI had entered into a long-term investment partnership with Microsoft, which not only involved incorporating ChatGPT technology into Microsoft’s array of products and services but also granted OpenAI access to Microsoft’s Azure cloud platform and other resources.