OpenAI, the creator of ChatGPT, is expected to report approximately $5 billion in losses this year, despite generating $3.7 billion in revenue, according to sources familiar with the matter. The company, which saw a staggering 1,700% increase in revenue since early last year, earned $300 million in September alone and is forecasted to hit $11.6 billion in revenue by 2024.
Backed by Microsoft, OpenAI is currently in the midst of a funding round led by Thrive Capital, valuing the company at over $150 billion. The round, reportedly oversubscribed, is expected to close next week, bringing in $1 billion from Thrive and additional investment from Tiger Global.
This comes on the heels of key departures, including Mira Murati, OpenAI’s Chief Technology Officer, and talks of restructuring the firm into a for-profit entity while retaining a nonprofit segment. The restructuring would streamline investor relations and provide better liquidity options for employees.
Despite its financial losses, which are largely attributed to the high operational costs of running its AI services and salaries, OpenAI’s tools and GPT models have fueled a surge in the generative AI sector. This rapid growth has necessitated a massive investment in Nvidia’s graphics processing units, critical for the performance of OpenAI’s models.
OpenAI’s evolving financial structure and investor interest reflect the company’s significant role in the AI landscape as it continues to scale its operations and tools.
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