Amid reports about ChatGPT-parent, OpenAI’s potential bankruptcy, and its impact on the artificial intelligence market, popular tech analyst Ming-Chi Kuo has offered a reassuring perspective.
What Happened: A report from Analytics India Magazine published last week projected the possibility of OpenAI facing bankruptcy by the end of 2024.
It highlighted the staggering operational cost of running ChatGPT, the company’s flagship AI service, with a daily expenditure exceeding $700,000.
Simply put, despite efforts to monetize GPT-3.5 and GPT-4, the revenue stream hasn’t kept pace with expenses.
See Also: Is ChatGPT Running Out Of Steam? AI Chatbot’s Performance Raises Burnout Concerns
Additionally, ChatGPT’s initial post-launch popularity has reportedly faced a rapid decline in user engagement over the past few months.
However, diverging from the prevailing concerns, Kuo said that the potential bankruptcy could be part of changes in the industry, which will “create new winners and losers.”
He further stated if AI/AIGC cannot figure out how to make enough money and run a successful business, the amount of investment in it may begin dwindling.
“I think one of the indicators will be Microsoft’s Capex guidance for AI/AIGC in the next two quarters and the profitability of the relevant business,” he said.
In January, Microsoft Corporation MSFT announced a $10-billion investment in OpenAI, earning a 49% stake after recouping its investment.
Why It’s Important: According to the report, the AI competition initially appeared to be primarily between OpenAI, Alphabet Inc. GOOG GOOGL, and Meta Platforms Inc. META.
However, Elon Musk’s xAI has drastically shifted the landscape.
For the unversed, Musk co-founded OpenAI along with Sam Altman and others in 2015 but left the company in 2018 over some disagreements.
Since ChatGPT’s launch, the tech billionaire has time and again taken a swipe at the AI-powered chatbot and the company and even announced to launch a rival chatbot called “TruthGPT.”
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Read Next: ChatGPT’s Website Sees A Dip In Visitors: Is The World Already Tired Of Chatting With AI?
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