Daily Morning News

OpenAI is projected to incur a $5 billion loss this year and could deplete its cash in 12 months, according to a report.

OpenAI is projected to earn between $3 billion to $4.5 billion in 2024, but it is also on track to incur losses of $5 billion, as reported by The Information.

The company is expected to exhaust all of its cash within the next 12 months due to high capital expenditure on cloud infrastructure for training and running AI programs, particularly for ChatGPT. OpenAI heavily relies on Microsoft for providing computing infrastructure and has invested in around 350,000 Nvidia chips, with a significant portion dedicated to running ChatGPT. Most of these servers are rented from Microsoft at $1.3 per hour, resulting in an estimated expenditure of $4 billion in 2024 alone.

In addition to infrastructure costs, OpenAI plans to spend $3 billion on training and $1.5 billion on employee salaries in 2024. Despite generating revenue of about $2 billion through ChatGPT and $1 billion through providing access to its large language model, the company is still facing a significant deficit. OpenAI will need to secure additional funding as it continues its pursuit of developing Artificial General Intelligence (AGI).