Right now, all the top tech companies across the world are working with and around AI. OpenAI has a lead among all and is one of the leading AI companies today. But it seems that not all is well and games at the OpenAI headquarters. Recent reports suggest that the company is facing severe financial difficulties that could lead to a $5 billion loss in 2024.
OpenAI rose to popularity with its AI assistant ChatGPT in November 2022. It has over 100 million weekly users. Recently, on July 18, OpenAI introduced a new generative AI model, “GPT-4o Mini.”
However, on the other side, as per an analysis shared by The Information, OpenAI is standing on a thin line and is at risk of running out of cash within the next 12 months. This report was based on undisclosed financial data and sources familiar with the company’s operations.
As per the report, the ChatGPT maker is expected to spend approximately $7 billion on AI training and an additional $1.5 billion on staffing. If we look at the industry trends, these numbers are higher than those of any of the competitors. If we look at Amazon-backed Anthropic, it expects a burn rate of $2.7 billion in 2024.
Now because of this, the expenses will increase and OpenAI will be forced to secure another round of financing. This is pretty essential for the company to be able to secure its financial position. According to Tracxn, the company has already completed seven funding rounds and raised over $11 billion.
If reports are to be believed, OpenAI is currently developing a more advanced AI model named “Strawberry”. With this, they promise superior reasoning capabilities and more humanlike responses compared to GPT-4o.
OpenAI has not confirmed any of this yet. Let’s see how the company deals with this tricky issue.
