#AI #GenerativeAI #OpenAI #AIBubble #AIHype: "As I've said before, OpenAI is unprofitable, unsustainable and untenable in its current form, but I think it's important to explain exactly how untenable it is, and I'm going to start with a few statements:
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#AI #GenerativeAI #OpenAI #AIBubble #AIHype: "As I've said before, OpenAI is unprofitable, unsustainable and untenable in its current form, but I think it's important to explain exactly how untenable it is, and I'm going to start with a few statements:
- For OpenAI to hit $11.6 billion of revenue by the end of 2025, it will have to more than triple its revenue.
- At the current cost of revenue, it will cost OpenAI more than $27 billion to hit that revenue target. Even if it somehow halves its costs, OpenAI will still lose $2 billion.
- However, OpenAI's costs are likely to increase, because (as the New York Times notes) if this company grows by 300%, it's very likely that the free user base of ChatGPT increases along with it, burdening the company with more costs.
- Even a $2 price increase (the first expected price hike for ChatGPT Plus, as the company reportedly works towards charging $44 per month) and similar price hikes on the Teams and Enterprise plans won’t do much to stem the flow of red ink on its balance sheet.
- GPT-4 — and this isn't inclusive of GPT-4o — cost $100 million to train, and more complex future models will cost hundreds of millions or even a billion dollars to train. The Information also estimated back in July that OpenAI's training costs would balloon to $3 billion in 2024."
OpenAI Is A Bad Business
OpenAI, a non-profit AI company that will lose anywhere from $4 billion to $5 billion this year, will at some point in the next six or so months convert into a for-profit AI company, at which point it will continue to lose money in exactly the same way. Shortly after
Ed Zitron's Where's Your Ed At (www.wheresyoured.at)
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wraptilereplied to Miguel Afonso Caetano last edited by
@remixtures I'm not sure who is this targeted at? Why should consumers care that openAI is bleeding money?
That's basically all VC funded market grabs (uber, airbnb etc are all the same) and I think as users we have the right to take advantage of this until the service inevitably enshitifies itself but there's no moat and I'll gladly switch.
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@remixtures I don't think anyone who has watched tech for the past few years thinks OpenAI will continue to offer ChatGPT for free. It was a brand strategy to make a name for themselves but there's no way they're going to continue to do that - it's super unaffordable, and they even ask on the form when people cancel their subscription "Umm.. so like... theoretically... how mad would you be if there was no more free ChatGPT? 🥺"
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Miguel Afonso Caetanoreplied to wraptile last edited by
@wraptile The bursting of the AI bubble could result in a financial crisis with more serious consequences for everyone, including or especially workers in the IT sector such as programmers, data scientists, AI specialists, etc. Remember the dotcom bubble that started in 1995 and ended in its burst in 2000?
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@janeadams Yes, but they have lots of competition such as Grok from xAI, Gemini from Google/Alphabet, Claude from Anthropic, and Llama from Meta. So, they can't raise their prices very suddenly. Also, you can play with some of OpenAI's models for free here: https://lmarena.ai/