OpenAI is reportedly spending around $7 billion on AI experiments this year, putting the company at risk of running out of money within 12 months.
According to an analysis by The Information of internal financial documents related to OpenAI, the company behind ChatGPT is on track to spend around $7 billion on training AI models alone and $1.5 billion on staff. That far outpaces rivals like Amazon-backed Anthropic, which is expected to spend $2.7 billion on similar activities this year.
Skyrocketing operating costs could see OpenAI lose $5 billion in 2024, putting Sam Altman's company at risk of running out of money within 12 months. OpenAI has raised more than $11 billion in funding over the past seven rounds, according to data from research firm Tracxn. Most recently, the company raised an undisclosed amount from ARK Investment Management in April.
OpenAI did not immediately respond to a request for comment.
ChatGPT is estimated to cost $700,000 a day to run since early 2023 due to its expensive server infrastructure. That figure is based on the aging GPT-3, while newer models require more money and have higher user queries than last year.
OpenAI unveiled GPT-4o mini on July 18, a fork of the fastest and most powerful GPT-4o it launched in May. It is described as “the most capable and cost-effective small model to date,” and is part of the company’s push to lead multimodality, or the ability to provide multiple types of AI-generated media within a single tool, such as text, images, audio, and video.
The company is also building an AI with advanced reasoning capabilities that will surpass GPT-4o’s capabilities and move toward generalized artificial intelligence (AGI), according to Reuters. The project, internally called “Strawberry,” is an extension of the previously mysterious Q* project, which promises to demonstrate “human-like responses and reasoning.”
In addition to financial issues, OpenAI also faces management challenges. The company is currently under scrutiny by the US Securities and Exchange Commission (SEC) over allegations of illegal investment deals. On July 23, US lawmakers also sent a letter to CEO Sam Altman, expressing concerns about OpenAI's safety standards and hiring practices, according to the Washington Post.