Upon its release in November 2022, OpenAI’s ChatGPT established itself as the fastest-growing app in history. The company’s financial destiny, according to a recent news report by a Magazine has, however, sparked worries. The research suggests that by the end of 2024, the parent company of ChatGPT might go bankrupt.
ChatGPT users going away
The study claims that concerns about the feasibility of OpenAI’s intention to register for a trademark on GPT led to predictions that users could eventually stop using it. According to the report, fewer people used ChatGPT in June and July than they did in May. According to SimilarWeb data as of August 3, ChatGPT traffic has decreased for a second time in a row after falling by 9.6% in July and 9.7% in June. Notably, the number of users fell by 12% in July, from 1.7 billion in June to 1.5 billion.
API cannibalization may make ChatGPT to Bankrupt
The paper ascribed some of this loss to API cannibalization, where employers forbade employees from utilising ChatGPT for business-related activities but permitted the large language model (LLM) to be incorporated into other workflows.
According to media reports, running ChatGPT costs OpenAI about $700,000 per day. While recent investors like Microsoft cover these costs, continuing to incur such costs in the absence of revenue could be harmful.
Earlier losses of $540 million for 2023 have doubled when OpenAI’s chatbot development started, with optimistic revenue projections of $200 million for 2023 and $1 billion for 2024. However, growing losses make accomplishing these goals uncertain. Model development was additionally complicated by ongoing GPU (Graphics Processing Unit) shortages.
OpenAI to face serious trouble due to competition
The latest trademark filing for “GPT-5” by OpenAI and its ongoing model training initiatives demonstrate the company’s commitment to making progress in this field. Despite these efforts, the research warns that OpenAI may be in financial trouble by the end of 2024 if more funding is not quickly secured.
Elon Musk’s assertions that his AI startup xAI is superior and Apple’s impending entry into the market for chatbots powered by AI have made things more difficult for OpenAI throughout this period. Musk, a co-founder of OpenAI, slammed the organisation for its ties to Microsoft and its approach to developing artificial intelligence.