OpenAI continues to burn money

Although OpenAI’s revenues are increasing significantly, the generative AI (genAI) pioneer remains dependent on financial injections, according to Reuters. 

The maker of ChatGPT generated revenue of $300 million in September alone, sources said — an increase of 1700% compared to the beginning of 2023. And the company expects revenue to jump to $11.6 billion next year.

Nevertheless, OpenAI expects to lose around $5 billion this year despite sales of $3.7 billion.

Expenses can only be partially traced

Various factors are responsible for the high losses, reports The New York Times. This year one of the biggest increased operating costs has been increased energy consumption tied to an enormous upswing since the launch of ChatGPT at the end of 2022. The company sells subscriptions for various tools and the startup grants licenses to numerous companies for the use of large language models (LLMs) from its GPT family.

Employee salaries and office rent also have a financial impact.

AI needs more money

In order to cover existing debts and further increase growth, the genAI ​​company has for some time been aiming for another round of financing, which should also help manage energy costs.

The latest financing round — led by Thrive Capital, a US venture capital firm that plans to invest $1 billion — brought in $6.6 billion and pushed the company’s valuation to $157 billion. At the same time, OpenAI is warning investors away from rivals like Anthropic, xAI and Safe Superintelligence (SSI), a startup launched by OpenAI co-founder Ilya Sutskever.

Microsoft on board, Apple shies away

Microsoft, which like Thrive has previously invested several billion dollars in OpenAI, also wants to participate in this round. But Apple, which was also interested in investing, has since dropped out, according to Reuters.

One reason for Apple’s change of heart could be internal turmoil caused by the board’s plans to transform OpenAI into a for-profit company. Following the announcement of those plans, there were a number of key departures at OpenAI, most notably the departure of CTO Mira Murati.

In the near term, the growth of OpenAI is likely to continue; according to analysts’ calculations, the ​​company has now achieved a market share of 30%.