ChatGPT's pricey development: OpenAI reports millions of losses

Onur Demirkol
May 8, 2023

A recent report showed that ChatGPT cost over $540 million to OpenAI last year. 

ChatGPT, one of the hottest topics for the past couple of months, was pretty pricey to develop. The Information reported that the cost of developing today's most famous chatbot in the industry almost reached $540 million last year. The Information's sources are three people with knowledge of OpenAI's financials.

ChatGPT needs serious computing power, and security measures. Right now, it is not very cheap to afford that. However, this doesn't mean that OpenAI will run out of money soon, and the project will be stopped. A couple of months back, the company made a multi-year, multi-million dollar deal with Microsoft to secure its future and continue to develop artificial generative intelligence. With the partnership, it became the fastest-growing consumer app ever.

Recently, OpenAI's CEO, Sam Altman, said that it was "going to be the most capital-intensive startup in Silicon Valley history." The Information also noted that Altman has "privately suggested" that OpenAI would attempt to fund about $100 billion in the upcoming years as it tries to create artificial general intelligence (AGI), or AI that is as powerful as the human brain.


Chatbot searches are expensive

Popular search engines like Google or Bing are much cheaper compared to ChatGPT or Bard. A search on Google's own chatbot Bard costs 10 times as much as a typical search, according to John Hennessy, chairman of Google's parent company, Alphabet.

According to Dylan Patel, chief analyst at consulting firm SemiAnalysis, who previously spoke with The Information, ChatGPT could cost OpenAI over $700,000 per day in computational power expenses.

In the near future, these chatbots will be morely used as Google is expected to launch Bard at the I/O 2023 event. Besides, it is known that Elon Musk also works on a new chatbot because he thinks ChatGPT is "too woke."

A couple of days ago, the Godfather of AI, Geoffrey Hinton, quit Google to talk about the dangers of AI, and now we are entering into a new era where artificial intelligence will be the key player.


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