OpenAI, the artificial intelligence start-up responsible for the ChatGPT chatbot, is on course to exceed $1 billion in annual revenue. The figure surpasses the company's earlier projections shared with its shareholders.
According to a source with direct knowledge, as reported by The Information, OpenAI's current revenue trajectory suggests that app developers and various companies, including the discreet Wall Street firm Jane Street Capital, are increasingly leveraging OpenAI's conversational text technology for profit or cost-saving measures.
This revelation indicates that OpenAI is currently generating an impressive $80 million monthly. To put this in perspective, the company's revenue was a mere $28 million last year before it introduced charges for its ChatGPT chatbot.
ChatGPT's Rapid Success
ChatGPT, which is powered by OpenAI's large language model GPT-4, has been recognized as the fastest-growing application in history. It achieved a user base of 100 million at a pace faster than previous internet sensations such as Instagram, Netflix, and TikTok. The chatbot's unique capability to emulate human conversations, perform tasks like poetry writing, restaurant recommendations, and simplifying intricate subjects has garnered significant attention. However, some users have described the bot as occasionally appearing “unhinged” and confrontational.
Impact on OpenAI's Financial Health
The success of ChatGPT has led to a surge in AI investments from major tech companies. This could potentially aid OpenAI in recovering from its losses, which escalated to approximately $540 million in 2022 during the development of its flagship chatbot. Despite the losses, OpenAI's valuation stood at around $27 billion after a share sale of $300 million earlier this year.
Monetization and Partnerships
OpenAI has been proactive in its revenue-building strategies. The company recently introduced a business version of ChatGPT, known as the ChatGPT Enterprise model, which boasts enhanced security and privacy features. Early adopters of this model include notable names like Canva, Estée Lauder, and PwC. OpenAI revealed that since the launch of ChatGPT, over 80% of Fortune 500 companies have integrated it into their operations. Additionally, seven months prior, OpenAI introduced a $42-a-month premium subscription for ChatGPT's most avid users. While casual users can still access ChatGPT for free, certain features remain exclusive to subscribers.
Sam Altman, OpenAI's CEO, mentioned in December the necessity to monetize ChatGPT, highlighting the substantial computing costs associated with running the program. Apart from ChatGPT, OpenAI's revenue streams also include selling API access to its AI models. However, a deal with Microsoft stipulates that the tech behemoth is entitled to 75% of OpenAI's profits until its $13 billion investment in the start-up is fully repaid.