Fri October 11, 2024 ▪
3
min reading ▪ acc
OpenAI is a leading company in the artificial intelligence market. It currently faces major challenges in terms of profitability, despite the dazzling growth. With losses expected to reach $14 billion by 2026, the AI expert doesn’t expect to turn a profit before 2029.
The colossal cost of AI innovation: a key element
With its GPT-3 and GPT-4 models, OpenAI has considerable increased his income. Unfortunately, this does not offset the huge costs required to scale generative AI technologies.
In 2024, the company is expected to record a loss of 5 billion dollars (despite the expected turnover of 3.7 billion). This situation results from massive spending on:
- cloud computing,
- AI infrastructure,
- AI research.
Of course, the partnership with Microsoft Azure allows OpenAI to support its operations. However, it also contributes to increased costs. The infrastructure needed to maintain and develop advanced AI models remains one of them the biggest financial challenges for OpenAI.
Despite these losses, OpenAI continues to attract massive investment in AI
In October, OpenAI raised $6.6 billion. This takes its toll valuation at $157 billion. These resources are necessary to remain competitive against other AI giants such as Google DeepMind and Anthropic.
These competitors are increasing the pressure, forcing OpenAI to invest more in technological innovation and talent acquisition. The company also needs to improve its large language models and computing capacity meeting the growing demand for generative artificial intelligence.
OpenAI thus finds itself at a fundamental turning point in its development. Yet it remains a key player in the AI revolution.
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My name is Ariela and I am 31 years old. I have been working in the field of web development for 7 years. I only discovered trading and cryptocurrencies a few years ago. But it’s the universe that interests me a lot. And the topics covered within the platform allow me to learn more. A singer in my spare time, I also have a great passion for music and reading (and animals!)
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The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.