Is openAI heading towards bankruptcy?

I can hear you saying, “What are you waffling?” You are not alone. I too whispered the same when I was watching an Indian YouTube channel waffling the same. The thing is that only Indian media are covering this. I could not find a single international media house reporting this. Why? Probably, We Indians hate Uncle Sam as he may make us lose our jobs to a freaking “Samantha” from the 2013 film “Her” in the near future. But that is not the actual reason behind this. Analytics India Magazine(AIM), an India-based online news platform that specialises in Deep technology journalism has published an out-of-the-blue report on August 10. In that report, AIM has predicted that OpenAI might have to file for bankruptcy by the end of 2024. Rubbing your eyes? So did I. Before diving into the report, let's do a brief retrospection on the journey of OpenAI so far. OpenAI is a private research laboratory-turned-company with the mission of developing and directing Artificial Intelligence (AI) in order to wipe out the whole of mankind…clears throat… to benefit all of humanity. The company was founded by Elon Musk, Sam Altman, and others in 2015 and is headquartered in San Francisco. And, it was started with a $1B endowment. Three years later, in 2018, Musk walked out due to an alleged conflict of interest with his other similar work at Tesla. And who knew he would become one of their antagonists in the near future? OpenAI’s notable product offerings are GPT-3, GPT-4, DALL-E, DALL-E 2, CLIP, CODEX, Whisper, and finally our toxic boyfriend/girlfriend ChatGPT. Microsoft made a multibillion-dollar investment in OpenAI public at the beginning of 2023, but the business has always been the centre of its attention. Microsoft and OpenAI entered into a multiyear collaboration in July 2019 that has resulted in the addition of AI-based computing technologies to Azure, Microsoft's cloud platform. The most recent investment made by Microsoft in OpenAI includes Bing, its search engine. To create an AI-enhanced version of Bing, the business is utilising the same technology created for ChatGPT. Additionally, Microsoft's Edge browser now has AI-based features, and ChatGPT technology is being extended to Microsoft 365 applications including Outlook and Teams. Moreover, in 2019, the once Not-For-Profit organisation pivoted to a For-Profit company, triggering worldwide criticisms. Above all, Sam Altman, the CEO of OpenAI, had testified before the members of a senate subcommittee in May about the need to regulate the scary AI technology.

According to AIM, the impending bankruptcy could be realised by the notable drop in users. They feel that the major reason for this may be due to the increasing trends by companies in prohibiting the usage of ChatGPT and utilising the API to build their own internal LLMs to increase their productivity in their workflows.

Secondly, the uncommon alliance between Meta and Microsoft has led to the introduction of Llama 2, yet another powerful Large Language Model(LLM). Undeniably, the open-source LLM models have heated up the Generative AI competition. Lookout for Mistral AI, a French startup that is only weeks old, has bagged $113M seed funding and is valued at $260M. Strangely, they did not even have a pitch deck. Yes, you heard me right. They did all this with a 7-page strategic memo.

Running an AI company is not easy. It involves high operational costs and infrastructure costs. And there has been a shortage of GPUs that are required to train the models. They are in desperate need of GPUs and have to acquire them soon.

As mentioned earlier, Musk has now become their archvillain. Don’t worry that the most awaited cage fight between Musk and Zuck is off, Musk may now call Sam for a cage fight. He is building his own “TruthGPT” and has already bought 10,000 Nvidia GPUs to train the models.

So, will OpenAI file for bankruptcy? We have to wait and see. While burning investors’ money and dreaming of going public soon, OpenAI has a difficult path ahead.