OpenAI, the creator of ChatGPT, is facing a dire financial situation, with reports suggesting that the company might face bankruptcy by the end of 2024 if it fails to secure additional funding promptly.
Media sources have highlighted the concerning trajectory, painting a challenging picture for the pioneering AI company.
Analytics India Magazine recently disclosed that ChatGPT’s online platform has experienced a consistent decline in user engagement during the initial half of this year.
The once-vibrant user base has dwindled steadily, with July’s user count slumping to 1.5 billion compared to 1.7 billion in June and 1.9 billion in May, based on data provided by SimilarWeb, a prominent analytics company.
These figures exclude ChatGPT’s APIs and the mobile application.
While various theories have been put forth to explain this decline, two stand out. One hypothesis suggests that the reduced usage in May could be attributed to students being out of school.
Another perspective suggests that users have been shifting towards building their own chatbot models instead of relying on the original ChatGPT offering.
OpenAI’s struggles are further compounded by significant financial losses. After the introduction of ChatGPT, which has sparked concerns over its potential to replace human creativity in various job markets, OpenAI’s losses have reportedly surged to approximately $540 million in the previous year, as indicated by a report from The Information in May.
Ironically, the operational costs of ChatGPT remain staggering. The model incurs a daily expenditure of around $700,000, making it a high-cost endeavour to maintain.