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OpenAI Lost $540 Million After Launching ChatGPT Last Year

ChatGPT Operating Cost Revealed

OpenAI faced a significant financial setback of $540 million following the launch of its AI chatbot, ChatGPT, last year. The company’s losses nearly doubled during that period, as reported by The Information, based on insights from sources familiar with OpenAI’s financial performance.

Despite the substantial losses, OpenAI has experienced a boost in revenue, reaching a yearly rate in the hundreds of millions of dollars. However, the growing demand for ChatGPT, which attracted 100 million active users within just two months of its launch, is expected to further drive up costs.

According to Dylan Patel, the chief analyst at consulting firm SemiAnalysis, the daily cost of utilizing the ChatGPT chatbot amounts to approximately $700,000. Most of the amount goes to the purchase of servers with GPU-based computing accelerators.

Last February, OpenAI introduced a paid version of ChatGPT to reduce expenses and manage financial losses. However, their financial situation has improved significantly due to the multimillion-dollar agreement they made with Microsoft earlier this year.

As part of this partnership, Microsoft recently collaborated with AMD to develop an AI chip named Athena. This advancement will accelerate the progress of initiatives like OpenAI’s ChatGPT and GPT-4, significantly reducing implementation costs.

OpenAI’s CEO, Sam Altman, revealed plans to potentially raise around $100 billion in the forthcoming years as the company strives to advance artificial general intelligence (AGI) technology.

Furthermore, OpenAI is actively seeking fresh datasets for its chatbot, including ones that are currently unavailable online. However, the acquisition of these datasets has sparked controversy, with companies like Samsung expressing concerns that their proprietary data could be incorporated into the ChatGPT dataset. This concern was exemplified by a recent ban on the use of generative AI by Samsung employees.

OpenAI’s revenue is projected to experience significant growth this year, with estimates suggesting it could reach $200 million. By 2024, expectations are that revenue will soar to $1 billion, according to Reuters.

SabariNath

Written by SabariNath

Sabarinath is the founder and chief-editor of Code and Hack. With an unwavering passion for all things futuristic tech, open source, and coding, he delves into the world of emerging technologies and shares his expertise through captivating articles and in-depth guides. Sabarinath's unique ability to simplify complex concepts makes his writing accessible and engaging for coding newbies, empowering them to embark on their coding journey with confidence. With a wealth of knowledge and experience, Sabarinath is dedicated to providing valuable insights, staying at the forefront of technological advancements, and inspiring readers to explore the limitless possibilities of the digital realm.

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