Why OpenAI May Lose $5 Billion in 2024
According to an analysis by The Information based on previously undisclosed financial data and sources familiar with the company, OpenAI is projected to lose up to $5 billion in 2024 due to massive costs associated with running AI products like ChatGPT.
The key reasons for OpenAI's potential $5 billion loss in 2024 are:
Training and Inference Costs
OpenAI is on track to spend nearly $7 billion this year on AI training alone
The company is renting $4 billion worth of Microsoft Azure servers to power ChatGPT inference workloads
Training new AI models could cost up to $3 billion in 2024
Staffing Costs
OpenAI's workforce has grown to around 1,500 employees, potentially costing $1.5 billion this year - triple the initial projections
Revenue vs Expenses
While OpenAI is generating around $2 billion annually from ChatGPT and nearly $1 billion from LLM access fees, its total revenue is estimated between $3.5-4.5 billion for 2024
This leaves a substantial shortfall compared to the $7-8.5 billion in projected expenses
The report suggests OpenAI may need to raise additional funding within the next 12 months to sustain its operations and ambitious AI research and development efforts.Â
The company has already completed 7 funding rounds, raising over $11 billion to date.
