ChatGPT, which is giving sleepless nights to the employed people, is drowning its own company, but how?
When the AI chatbot ChatGPT was introduced last November, concerns arose that it might lead to widespread unemployment, causing ripples in the job market.
Discussions revolved around the potential of artificial intelligence platforms like ChatGPT to replace a significant portion of the workforce in the coming years.
LinkedIn saw a surge in individuals striving to establish themselves as AI experts, offering tips on harnessing the power of ChatGPT.
Fast forward two months, and ChatGPT is about to complete its first year since launch.
Amidst this, a startling revelation has emerged — OpenAI, the company behind ChatGPT, could face bankruptcy by the end of 2024.
This alarming prediction has been put forth by ‘Analytics India’ magazine in one of its reports.
How did ChatGPT reach on the verge of sinking?
OpenAI has a diverse portfolio of Artificial Intelligence products, one of which is ChatGPT-4 — an AI tool designed for text-related tasks.
Despite gaining immense popularity, this product has placed a substantial strain on the company’s financial health.
As per the report, the company incurred a staggering $540 million (approximately Rs 450 crore) in the development of this technology.
Yet, the earnings from it pale in comparison. Running ChatGPT alone costs a whopping $700,000 per day.
OpenAI’s GPT 3.5 and GPT-4 models garnered significant attention, but they have yet to recoup the investment.
Upon ChatGPT’s market release, expectations were high regarding the profits it would generate. However, reality has proved different.
The magazine cites several reasons for this, including:
- The patenting of ChatGPT marked the beginning of a decline in its popularity, with users allegedly turning away from the platform. This trend is evident in the report, showing a decrease of 9.7 percent in website traffic in June, further dropping to 9.6 percent in July. Likewise, user numbers dwindled, dropping from 1.7 billion in June to 1.5 billion in July — a 12 percent decrease.
- Competing technologies have emerged. Meta’s Llama2, Google’s Bard, and Elon Musk’s xAI stand as formidable challengers to ChatGPT. While ChatGPT offers selective services for a fee, Llama2 is free and user-friendly. Additionally, companies are utilizing ChatGPT’s API to create their own chatbots, fostering in-house alternatives.
- The scarcity of GPUs (graphics processing units) poses a challenge. OpenAI’s founder, Sam Altman, acknowledged the limited GPU supply in the market, hampering the development of new models.
The report contends that if the company fails to generate earnings, bankruptcy could loom by 2024.
A lifeline came in the form of Microsoft’s $10 billion investment in 2019, which currently sustains the company’s operations.
For 2023, OpenAI anticipates earnings of $200 million, a sum significantly lower than expenses.
Looking ahead, the company has set a target of $1 billion in earnings for 2024.
However, given the mounting losses, achieving this objective appears increasingly challenging.
There is no doubt about ChatGPT’s substantial potential, but OpenAI must now explore avenues to generate revenue through AI services.
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