OpenAI’s ChatGPT, which saw unprecedented growth after its launch in November 2022, now faces a perilous future due to dwindling user engagement and financial losses.
According to a recent report from Analytics India Magazine, concerns are mounting about the company’s financial viability, with predictions suggesting that OpenAI might declare bankruptcy by the end of 2024.
The report highlights a potential cause for this uncertainty – OpenAI’s intention to trademark GPT. This move has sparked fears that users might gradually abandon the platform.
Data from SimilarWeb reveals a decline in ChatGPT’s traffic for the second consecutive month, with a 9.6% drop in July followed by a 9.7% drop in June.
Moreover, the number of users decreased by 12% in July alone, going from 1.7 billion in June to 1.5 billion.
One factor contributing to this decline is the concept of API cannibalization. Some employers have restricted the use of ChatGPT for business purposes, opting instead to incorporate the large language model into other workflows.
According to reports, OpenAI faces significant operational costs, with ChatGPT’s daily operation amounting to around $700,000. While recent investments from companies like Microsoft have covered these expenses, sustaining such costs without substantial revenue could be detrimental.
OpenAI’s recent trademark filing for “GPT-5” and its ongoing model training efforts underline the organization’s commitment to further advancing its product. However, the report cautions that without securing additional funding, OpenAI could find itself in financial hell by the end of 2024.
RELATED: Jack Dorsey Isn’t So Pleased About Sam Altman’s Eye-Scanning Crypto Project
Information for this story was found via Analytics India Magazine, X/Twitter, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.