OpenAI Loses $5Billion In 2024 On $3.7Billion Revenue
...Earnings Projected To Reach $11.6Billion In 2025
By Edu Abade
OpenAI, the creator of ChatGPT, expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC has confirmed.
The company generated $300 million in revenue last month, up 1,700 percent since the beginning of last year and expects to make $11.6 billion in sales next year, according to sources close to OpenAI who pleaded anonymity because the numbers are confidential.
The New York Times first reported OpenAI’s financials earlier on Friday, September 27, 2024 after reviewing the company’s documents, but CNBC hasn’t seen the financials.
Following its Chief Executive Officer, Sam Altman’s hosting of the company’s annual meeting in Atlanta on December 11, 2023, OpenAI, which is backed by Microsoft, is currently pursuing a funding round that would value the company at over $150 billion, those familiar with the matter have told CNBC.
Thrive Capital is leading the round and plans to invest $1 billion, with Tiger Global planning to join as well.
Chief Financial Officer (CFO) of OpenAI, Sarah Friar told investors in an email, at the weekend, that the funding round is oversubscribed and will close this week. Her note followed a number of key departures, most notably technology chief, Mira Murati, who announced the previous day that she was leaving OpenAI after six and a half years.
Also this week, news surfaced that OpenAI’s board is considering plans to restructure the firm to a for-profit business. The company will retain its nonprofit segment as a separate entity, a person familiar with the matter told CNBC. The structure would be more straightforward for investors and make it easier for OpenAI employees to realize liquidity, the source said.
OpenAI’s services have exploded in popularity since the company launched ChatGPT in late 2022. The company sells subscriptions to various tools and licenses its GPT family of large language models, which are powering much of the generative AI boom. Running those models requires a massive investment in Nvidia’s graphics processing units.
The Times, citing an analysis by a financial professional who reviewed OpenAI’s documents, reported that the roughly $5 billion in losses this year are tied to costs for running its services as well as employee salaries and office rent. The costs don’t include equity-based compensation, “among several large expenses not fully explained in the documents,” the paper said.
