Report claims that OpenAI has burned through $8.5 billion on AI training and staffing, and could be on track to make a $5 billion loss

OpenAI, the creator of ChatGPT, is facing significant financial challenges despite its popularity. An investigative report indicates that the company is on track for an operational loss of $5 billion due to the high costs of training AI models and running servers. Since its founding in 2015, OpenAI has grown significantly, aided by substantial investments, particularly from Microsoft, which invested $10 billion in early 2023. This investment included a 75% share of OpenAI’s profits, a 49% stake in the company, and integration of ChatGPT into Microsoft’s systems, along with access to Azure cloud servers at a reduced rate. However, OpenAI's expenditures, including $7 billion on model training and $1.5 billion on staffing, have outpaced its revenue. The daily operational cost of ChatGPT is estimated at $700,000 due to expensive AI servers. OpenAI's drive to be the first to achieve artificial general intelligence (AGI) also strains its finances. The company faces stiff competition from other tech giants, reducing its share of the market. Although some analysts predict possible bankruptcy, others believe that costs will decrease over time as the AI market expands. Microsoft’s significant investment suggests that it could support OpenAI further if needed, though this might attract anti-monopoly scrutiny. To improve revenues, OpenAI could raise query costs for ChatGPT, though this risks losing users. Lower operational costs through cheaper AI servers may be a more sustainable solution for the company's future.