OpenAI Incurs $540M Net Losses as Operating Costs Soar

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In November 2020, OpenAI launched ChatGPT, a generative AI chatbot that has taken the tech industry by storm. Experienced tech personnel such as those from Google were hired in the development of this complicated technology, leading to an increase in costs that nearly doubled OpenAI’s operating losses to $540 million for the year.

Although this was brought on by paying customers accessing OpenAI’s AI software, a stroke of luck from Microsoft’s $10 billion investment into the company means that a large portion of the ChatGPT-powered revenue will be returned to them. This deal was finalized so that Microsoft can resell the software through its own product, Azure, as well as implementation into its search engine Bing and several other apps.

Even by conservative estimates, the revenue for OpenAI for 2023 is projected to be at least double what it was in 2022, and is enabled to a great degree because of Microsoft’s investment. Sam Altman, OpenAI’s founder, even went so far as to say that it would be the most capital-intensive venture in Silicon Valley’s history, requiring an estimated $100 billion to fully reach its potential.

The innovative ChatGPT concept is touted by many as the future of AI, and the OpenAI and Microsoft partnership has been essential in proving this. By combining Microsoft’s financial resources in OpenAI’s cutting-edge technology, they could shape the course of the industry.

See also  OpenAI lawsuit reignites privacy debate data scraping

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