Mike Isaac & Erin Griffith
29 September
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OpenAI, the San Francisco start-up behind ChatGPT, has been telling investors that it is making billions from its chatbot and that it expects to make a lot more in the coming years. But it has not been quite so clear about how much it is losing.
OpenAI’s monthly revenue hit $300 million in August, up 1,700 percent since the beginning of 2023, and the company expects about $3.7 billion in annual sales this year, according to financial documents reviewed by The New York Times. OpenAI estimates that its revenue will balloon to $11.6 billion next year.
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But it expects to lose roughly $5 billion this year after paying for costs related to running its services and other expenses like employee salaries and office rent, according to an analysis by a financial professional who has also reviewed the documents. Those numbers do not include paying out equity-based compensation to employees, among several large expenses not fully explained in the documents.
OpenAI has been circulating the documents with potential investors for an investment round that could bring in $7 billion and value the company at $150 billion, among the highest ever for a private tech company. The round, which could close as early as next week, comes at a crucial time for OpenAI, which is experiencing rapid growth but has lost a number of important executives and researchers in the past few months. The documents offer the first detailed look into OpenAI’s financial performance and how it is presenting itself to investors, but they do not neatly explain how much money it is losing. The fundraising material also signaled that OpenAI would need to continue raising money over the next year because its expenses grew in tandem with the number of people using its products.
OpenAI declined to comment on the documents.
OpenAI’s revenue in August more than tripled from a year ago, according to the documents, and about 350 million people — up from around 100 million in March — used its services each month as of June.
Most of that has come from the continuing popularity of ChatGPT, which was released in November 2022. The documents show a spike in growth after ChatGPT began allowing people to use the service without creating an account or logging in. The company expects ChatGPT to bring in $2.7 billion in revenue this year, up from $700 million in 2023, with $1 billion coming from other businesses using its technology.
Roughly 10 million ChatGPT users pay the company a $20 monthly fee, according to the documents.
©2024 The New York Times News Service
First Published: Sep 29 2024 | 11:09 PM IST