Technology commentator Edward Zitron said that OpenAI, the creator of ChatGPT, currently has no viable business model to support the company’s outlook and spends too much money. However, there are quite a few industry executives who do not concur.
I for one now find it impossible to imagine OpenAI in its present configuration Zitron proclaimed in the latest Where’s Your Ed At? newsletter. This comes after earlier this year, it was reported that OpenAI may report a net operating loss of up to $5 billion in 2024; which means the company may run out of cash in the next 12 months.
Zitron said for OpenAI to ‘survive’ beyond 2026 it would require more equity funding than any start up in history and do so year in and year out.
Furthermore, he said that OpenAI needs to solve a grand challenge to cut the cost of developing GPT by at least an order of magnitude.
“Have a technological shift that will ensure the costs of construction and running of GPT or a model that will replace it are easily reduced by a factor of thousands of percentages,” he added.
He also said that to substantiate the ‘massive’ capital and infrastructure investments needed to proceed, OpenAI’s utilizations have to both generate clean new occupation and displace ageing ones.
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Brian Merchant of the LA Times made similar comments in a July 25 X post stating that generative AI, is ‘intensely expensive to train and run,’ and that OpenAI’s ‘gonna have to raise more money this year to stay in business.
Industry execs disagree
But some people in the industry do not agree that OpenAI is headed for bankruptcy.
“OpenAI clearly did shift the status quo and will NEVER become a bankrupt company,” Abacus. The specific X post by the AI CEO Bindu Reddy came on July 29, so it included the following.
On the other hand, Ather Energy CEO Tarun Mehta demystified the OpenAI possible bankruptcy rumours when they began in August 2023.
“Uber at its peak was burning 10X more capital for YEARS,” Metha in an August 2023 X post elaborating the issues and asserting that OpenAI is “perhaps” one of the most important startup of recent years.
“They will be fine folks,” he added.
This is a positive sign for OpenAI; Elon Musk pull out his defamation lawsuit against OpenAI as well as its CEO Sam Altman on the 12 th of June. The lawsuit had accused the AI company of deviating from its cause – that was that the company was supposed to be creating AI technologies for the improvement of mankind and not for corporate gains.
And on February 29, Musk sued OpenAI and its CEO Sam Altman for breach of contract, claiming that the ChatGPT maker deviated from its mission to build large language models, for the advancement of the ‘humanity, but for the sake of profit.