This post was originally published on this site
https://content.fortune.com/wp-content/uploads/2023/08/GettyImages-1258459883-e1693390112231.jpg?w=2048
OpenAI, the A.I. start-up behind chatbot phenomenon ChatGPT, is on track to generate more than $1 billion in annual revenue, according to a new report.
Details about the A.I. start-up’s earnings were first reported by The Information on Tuesday, with the publication revealing that OpenAI’s income exceeded the figures the company had previously given shareholders.
The Information reported that OpenAI was currently generating around $80 million a month, defying previous expectations that the $1 billion annual revenue milestone would be reached by 2024, as reported by Reuters last December.
Last year—before it began charging users to access its generative A.I. chatbot ChatGPT—OpenAI’s annual revenue reached just $28 million, according to The Information.
The chatbot, powered by OpenAI’s large language model (LLM), became the fastest-growing app in history earlier this year, reaching 100 million users far quicker than earlier Internet sensations like Instagram, Netflix and TikTok.
Its uncanny ability to mimic human conversation while completing tasks like writing poetry, recommending restaurants and breaking down complex topics made ChatGPT an internet star—but for some users, the bot also came across as “unhinged” and argumentative.
The success of ChatGPT—which sparked a wave of investment in artificial intelligence from Big Tech and beyond—could put OpenAI on track to recover some of its losses, which doubled to around $540 million in 2022 as the start-up developed its flagship chatbot.
A spokesperson for OpenAI was not immediately available to comment on the firm’s earnings.
Revenue drive
This year, the company—which was privately valued at around $27 billion after a $300 million share sale in April—has doubled down on its efforts to build revenue.
OpenAI launched a business version of ChatGPT this week, with the ChatGPT Enterprise model featuring improved security and privacy features. The company said in a blog post on Monday that early users included Canva, Estée Lauder and PwC.
“Since ChatGPT’s launch just nine months ago, we’ve seen teams adopt it in over 80% of Fortune 500 companies,” OpenAI added.
The launch came seven months after OpenAI rolled out a $42-a-month premium subscription service for ChatGPT’s most dedicated users.
For now, ChatGPT remains free to use for casual users, but access can be impacted by high demand levels, and non-subscribers cannot access all of the features available to those who pay for the chatbot.
The company’s CEO Sam Altman said in December that OpenAI would “have to monetize [ChatGPT] somehow at some point,” revealing that the computing costs involved with running the program were “eye-watering.”
Aside from making money via ChatGPT, OpenAI generates revenue by selling API access to its A.I. models.
However, it may be some time before the company fully reaps the rewards of its own success. Under the terms of a deal it made with Microsoft earlier this year, the tech giant is entitled to 75% of OpenAI’s profits until its $13 billion investments in the start-up are repaid.
The Information also previously reported that Altman expects OpenAI’s ambitions around artificial general intelligence (AGI) to cost it another $100 billion.
