OpenAI’s annualized revenue rose more than 110% to $3.4 billion over the past six months, The Information reported Wednesday, citing an internal communication from CEO Sam Altman. The growth suggests that businesses have been quick to adopt the firm’s technology despite rising competition.
Also read: Employees accuse OpenAI and Google DeepMind of hiding AI risks
The San Francisco-based company reported annualized revenue of $1.6 billion at the end of 2023, up from $1 billion in September, says the report. At the time, the startup made between $80 million and $130 million in revenue per month. Annualized revenue is an estimate of the total amount of money that a firm generates over a year.
ChatGPT drives revenue growth
OpenAI makes its money from the “sale of artificial intelligence software and the computing capacity that powers it,” the media outlet previously reported. In 2022, the company’s annualized revenue was just $28 million before it started charging people to access ChatGPT.
Launched in February 2023, the premium version of ChatGPT costs $20 per month. ChatGPT’s ability to generate human-like text and complete tasks, such as writing poetry, made it popular online, even though some people found its behavior to be nonsensical.
The Microsoft-backed company isn’t only making money from paid ChatGPT subscriptions, it also generates additional revenue by selling API access to its AI models to corporate customers. In August 2023, OpenAI launched a business version of its chatbot known as ‘ChatGPT Enterprise’.
The model comes with improved security and privacy features. Early users include Canva, Estée Lauder, and PwC. OpenAI said teams in over 80% of Fortune 500 companies had adopted ChatGPT Enterprise. Recently, the company revealed it had started to train a new AI system to succeed GPT-4, which could help grow earnings and beat the competition.
OpenAI suffers reputational damage
OpenAI’s revenue increase comes after a period of high drama for the American startup – the ouster and then the return of CEO and co-founder Sam Altman. In November, the company’s board fired Altman amid unclear circumstances, precipitating a mutiny from the company’s staff.
Also read: OpenAI Lines up GPT-4 Successor Amid Safety Concerns
A week later, Altman was reinstated to his position. The crisis led some of OpenAI’s corporate customers to jump ship, according to earlier reports. Rival firms like Anthropic, Google and Microsoft went after the clients. However, the revenue growth suggests OpenAI was able to keep some of its customers.
The company’s reputation has taken a beating in recent weeks, as former top brass, including Jan Leike, Gretchen Krueger and Tasha McCauley, questioned OpenAI’s safety culture. The firm also had a fallout with actress Scarlett Johannson over the illegal use of her voice in ChatGPT.
Cryptopolitan Reporting by Jeffrey Gogo