There is growing speculation about the financial viability of OpenAI, the entity responsible for developing ChatGPT. A recent report published by Analytics India Magazine has highlighted a noticeable decline in user engagement on the platform since May 2023, prompting concerns about its future financial health.
OpenAI, a startup with substantial support from Microsoft, made a significant impact in December 2022 by initiating a competitive surge in the field of artificial intelligence. The introduction of their chatbot, ChatGPT, garnered rapid popularity and garnered the attention of regulatory bodies worldwide. The technology quickly became synonymous with cutting-edge AI developments.
Declining user base for ChatGPT
According to the report, predictions that users would eventually quit using it were made because of uncertainties about the viability of OpenAI’s desire to file for a trademark on GPT. The research indicates that fewer users used ChatGPT in June and July compared to May. According to SimilarWeb statistics as of August 3, ChatGPT traffic has dropped again after dropping by 9.6% in July and 9.7% in June. Notably, from 1.7 billion users in June to 1.5 billion in July, a 13% decline in users was seen.
Cost of maintaining ChatGPT
The cost of maintaining ChatGPT has been estimated at an astonishing $700,000 per day. Currently, these expenses are being covered by recent investors, including Microsoft. However, there is a looming apprehension that if the platform does not achieve profitability soon, it could place considerable strain on the financial resources of these backers.
OpenAI has projected a target revenue of $1 billion by the year 2024. Nevertheless, the financial stability of the organisation heavily relies on the substantial $10 billion investment from Microsoft. To enhance its revenue streams, OpenAI has embarked on a transition to a paid subscription model for its services. This shift, combined with income generated from APIs (Application Programming Interfaces) and the utilisation of a GPT-4 based chatbot, is anticipated to contribute to the company’s efforts to achieve profitability.
