"The alarm bells are going off at OpenAI. What was once a healthy lead over its competition thanks to its blockbuster AI chatbot ChatGPT has turned into a razor-thin edge, motivating OpenAI CEO Sam Altman to declare a "code red." The financial stakes are almost comical in their magnitude: The company is lighting billions of dollars on fire, with no end in sight; it's committed to spending well over $1 trillion over the next several years while simultaneously losing a staggering sum each quarter."
"And revenues are lagging far behind, with the vast majority of ChatGPT users balking at the idea of paying for a subscription. Meanwhile, Google has made major strides, quickly catching up with OpenAI's claimed 800 million or so weekly active ChatGPT users as of September. Worse yet, Google is far better positioned to turn generative AI into a viable business - all while minting a comfortable $30 billion in profit each quarter, as the Washington Post points out."
"In a Thursday note, Deutsche Bank analyst Jim Reid estimated staggering losses for OpenAI amounting to $140 billion between 2024 and 2029. "OpenAI may continue to attract significant funding and could ultimately develop products that generate substantial profits and revolutionize the world," he wrote, as quoted by WaPo. "But at present, no start-up in history has operated with expected losses on anything approaching this scale.""
OpenAI's early lead from ChatGPT has narrowed to a razor-thin edge, prompting CEO Sam Altman to declare a "code red." The company is burning billions and plans to spend over $1 trillion in coming years while incurring massive quarterly losses. Monetization of ChatGPT remains weak as most users resist subscriptions. Google has rapidly closed the user gap and is better positioned to commercialize generative AI, generating about $30 billion in quarterly profit. Analysts warn that projected losses could reach $140 billion from 2024 to 2029, creating unprecedented financial strain and raising questions about long-term viability.
Read at Futurism
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