The article discusses the challenges facing OpenAI in the competitive generative AI landscape, emphasizing the financial unsustainability of its business model. Noted AI expert Kai-Fu Lee highlights how OpenAI's significant operating costs, approximately $7 billion to $8 billion annually, make it vulnerable to competitors like DeepSeek AI, which operates at much lower expenses. As AI models become commodities, maintaining a sustainable business model becomes crucial for OpenAI. Lee also mentions DeepSeek's capabilities, stating it can perform similar tasks as OpenAI's systems for a fraction of the cost, thereby threatening OpenAI's position in the market.
"The issue isn't really whose [AI] model is 1% better; I think they're all very good. The issue is: Is OpenAI's [business] model even sustainable?"
"You're spending $7 billion or $8 billion a year, making a massive loss, and here you have a competitor coming in with an open-source model that's for free."
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