According to BlockBeats, OpenAI, the artificial intelligence giant and developer of ChatGPT, is reportedly facing a potential loss of $5 billion this year. The Information revealed that OpenAI's internal financial documents and sources indicate the company has spent nearly $7 billion on AI model training costs alone, with an additional $1.5 billion on human resources. These expenditures significantly surpass those of competitors like Anthropic, which is backed by Amazon and expected to burn through over $2.7 billion in cash by 2024.
The Information estimates that OpenAI, currently valued at $80 billion, will need to secure another round of financing within the next 12 months to improve its balance sheet. Without this, the company risks exhausting its cash reserves amid the projected $5 billion loss this year. Data from Tracxn shows that OpenAI has completed seven funding rounds, raising over $11.3 billion, with the most recent private funding round in April led by Cathie Wood's ARK Investment Management, though the amount raised was not disclosed. Despite being one of the fastest-growing companies in history, OpenAI's operational costs are also growing rapidly. As of now, OpenAI has not publicly responded to these reports.
In a related development, The Information reported last week that OpenAI had initially planned to raise $7 trillion to establish a joint venture for building multiple semiconductor fabs to reduce reliance on Nvidia chips. However, after negotiations between OpenAI CEO Sam Altman and Taiwan Semiconductor Manufacturing Company (TSMC), the company has decided to abandon its plans to build its own fabs. Instead, OpenAI will form a joint venture focused on chip design, with TSMC handling the production of AI chips. OpenAI is also in ongoing negotiations with chip designers, including Broadcom, to develop new AI chips. Sources suggest that OpenAI's custom AI chips will have performance comparable to NVIDIA's products but are not expected to be available until at least 2026.
