OpenAI may go bankrupt by the end of 2024

Focusing on topics of significant technological relevance such as big data and artificial intelligence, India’s independent media outlet, Analytics India Magazine, has reported that OpenAI may face insolvency by the end of 2024. This grim forecast stems from the company’s current revenue deficit, which is inadequate to support daily operational expenses mounting to $700,000.

Last year, OpenAI accumulated losses to the tune of $540 million. While Microsoft’s announcement this year of an additional $10 billion investment in OpenAI, coupled with a deeper collaborative partnership, seemed promising, the staggering costs of operating large-scale natural language models such as GPT-3.5 and GPT-4 hint that these funds may be rapidly depleted.

Despite OpenAI’s introduction of various premium services, a glaring imbalance between expenditure and revenue persists. Operations are primarily sustained through initial investments. According to OpenAI’s CEO, Sam Altman, there are hopes to materialize a fundraising plan of $100 billion in the coming years, aimed at propelling the development of more extensive and generalized artificial intelligence technologies.

Previously, OpenAI’s market value soared to approximately $27-29 billion. Investors in OpenAI include not only Microsoft but also prominent venture capital firms such as Tiger Global, Sequoia Capital, a16z (Andreessen Horowitz), Thrive, and K2 Global. Among these, the Founders Fund, co-established by PayPal’s co-founder Peter Thiel, is a notable contributor.