OpenAI facing financial challenges as internal documents suggest potential bankruptcy within 12 months

From Vulcan Post: 2024-07-28 22:58:19

OpenAI is revealed to be burning through billions of dollars to sustain itself, with net losses for 2024 expected to reach $5 billion. While it raises $11 billion, most of it is not in cash, leading to concerns about its financial sustainability. The company spends $7 billion on training its GPT models.

Microsoft’s $10 billion investment in OpenAI largely consists of Azure cloud compute credits, tying the companies closely together. Microsoft’s CEO reportedly stated that it wouldn’t matter if OpenAI disappeared tomorrow. Despite financial challenges, OpenAI’s intellectual property and AI services are valued in the billions.

OpenAI may face financial trouble in the near future, but potential buyers are likely to step in given the company’s value. Microsoft is a strong contender for acquisition or partnership, given its financial capabilities. Other big players like Alphabet or Apple could also be interested in OpenAI’s potential.

Even with a recent valuation of $80 billion, OpenAI is overshadowed by larger companies like Microsoft. Microsoft likely has arrangements with OpenAI to access any new developments. Google or Apple could also step in to support or acquire OpenAI, but new revenue streams may be necessary for survival.

Despite potential breakthroughs like SearchGPT and GPT-5, OpenAI may struggle to survive independently due to financial pressures. The company may eventually become part of a larger tech corporation if new revenue streams are not successful. Concerns about an AI bubble burst could further impact OpenAI’s future.



Read more at Vulcan Post: Is AI bubble about to pop? Internal documents reveal OpenAI may go bankrupt within 12 months