OpenAI’s ChatGPT was launched in November 2022, it is one of the fastest growing apps in the history after its launch and it has created the excitement and fear among the people for replacing humans with the automation in the jobs. The AI studio that opened the way for the discussions among the non-technical individuals about AI is now encountering notable challenges.
According to the Analytics India Magazine,The AI development studio directed by Sam Altman while attempting to strengthen its position in generative AI with its chatbot had faced the financial crisis and it is estimated that the company might go bankrupt by the end of 2024. The report said that when OpenAI applied for a trademark on GPT, it was considered as a problem for the company. It was even predicted that many users might gradually stop using the technology. The operating expenses to the ChatGPT for its AI services costs around ₹5.80 crores per day, these costs were being borne by the Microsoft and other recent investors from their own pockets and if it does not see profits soon, this can eventually lead them to the depletion of their own funds over time.
OpenAI and ChatGPT had initially experienced a record-breaking flow of users during the early stages of their vigorous launch; a gradual decline was observed in user engagement over the recent months. The company’s losses were doubled to 540 million dollars in the month of May since it started to develop the AI chatbot. Moreover, the company has projected an annual revenue of $200 million for 2023 and it is expected to reach $1 billion in the year 2024. But, this seems impossible as the losses for the company are increasing day by day, the report said.
As per the SimilarWeb data, “it witnessed a 12 % decrease in the user base in July 2023 when compared to June 2023, sinking from 1.7 billion number of users to 1.5 billion users. This data is especially related to the users who visit the ChatGPT website and does not include the API factor of OpenAI”.
The report highlighted a user on platform X who pointed out the significant factor that contributed to this decline of API cannibalization. Many companies have restricted the use of API for their employees for the work purposes, but they are allowed to use the large language model (LLM) to integrate it into their workflows.
Analytics India Magazine has spotlighted another reason for this as the emergence of Meta’s Llama 2 chatbot. Meta, formerly known as Facebook, had recently introduced Llama 2 and collaborated with Microsoft. Llama 2 can be accessed through the Windows OS and the Llama 2 source code was released as open source, allowing researchers and developers to freely study and modify the original code.
