OpenAI Losses Doubled to $540 Million Amid ChatGPT Expense

OpenAI Losses Doubled to $540 Million Amid ChatGPT Expense

ChatGPT creator OpenAI reportedly doubled its losses to $540 million in 2022 as development expenses for the chatbot surged. The company may now try to raise as much as $100 billion in the coming years.

The AI research company, which is focused on the application of AI technology, is famous for AI programs like ChatGPT and image generator Dall-E 2.

Also read: Microsoft Opens Bing AI Chat to Everyone, Adds Third-Party Plugins

Launched last November, ChatGPT is capable of generating articles, lyrics, stories, jokes and even code based on user prompts. It can also answer most questions intelligently.

While there is no doubt that large AI language models are expensive businesses, it is not exactly clear how costly it is to build them. OpenAI’s losses sheds a light on the topic.

Skilled staff – but pricey

A report by The Information suggests OpenAI’s loss also ballooned due to employment costs, citing close sources with knowledge of the firm’s financials.

OpenAI reportedly lured key employees like engineers and research experts from Google to work on its chatbot, which went viral immediately after its release, prompting other tech firms to join the bandwagon for chatbots or incorporate the tech into their services.

In March this year, OpenAI reportedly poached AI researcher Jacob Devlin from Google. Devlin had tried to warn Google not to use ChatGPT data to train its AI chatbot Bard as it violated OpenAI’s terms of service. Additionally, Bard’s answers resembled ChatGPT’s.

The $540 million figure also reflects the steep costs of training its machine-learning models during the period before it started selling access to the chatbot.

Although revenue has picked up, reaching an annual pace of hundreds of millions of dollars weeks after the launch of a paid version in February, costs are likely to keep rising. This comes as more customers use AI technology and the company trains future versions of the software.

Costly AGI

According to The Information report, CEO Sam Altman has privately suggested the firm may try to raise as much as $100 billion in coming years to achieve its aim of developing artificial general intelligence (AGI); AI advanced enough to improve its own capabilities.

Mohit Pandey thinks this means Altman wants to establish a monopoly on AI, and the plans are already evident.

After buying the domain, and redirecting it to ChatGPT, OpenAI has now also filed for a trademark on ‘GPT.’ The company is also keen to acquire fresh data sets for its software, some of which are currently not on the internet.

However, these data sets are a point of contention elsewhere. Companies like Samsung are wary of their proprietary data slipping into the ChatGPT data pool, as evidenced by a recent ban on generative AI usage with company materials.

No quick relief yet

Other experts believe that as the AI arms race intensifies, OpenAI’s costs will escalate even further, likely deepening its losses.

Apart from investing in cloud computing for powering its language models and training new versions, data costs are also expected to skyrocket as platforms like Reddit and StackOverflow introduce policies that charge AI firms access to their previously free data sets.

A New York Times article revealed that Elon Musk terminated OpenAI’s access to the Twitter data set after discovering they were paying only $2 million annually.

The AI firm had initially projected revenue to hit $200 million for 2023, though internal estimates suggest they may surpass that forecast.

OpenAI was co-founded in 2015 by Silicon Valley technology tycoons like Musk and Altman, as well as PayPal co-founder Peter Thiel.

A recent report by Semafor says that Musk tried, in 2018, to take over as CEO – before walking away after pushback from Altman and others. Musk has implied that OpenAI’s profit incentives could potentially interfere with the ethics of AI models.

Image credits: Shutterstock, CC images, Midjourney, Unsplash.