OpenAI is facing intense financial pressure as it shifts into survival mode, having burned through $9 billion last year and expected to hit $17 billion this year. With 800 million weekly users, the lack of paying customers poses a significant challenge against $1.4 trillion in data center commitments. Although revenue surged to over $20 billion, the company remains in the red, relying on substantial investments from backers like SoftBank and partnerships with Microsoft and Nvidia. Analysts warn that OpenAI’s competitive edge is faltering amid rising costs and a questionable business model, with IPO prospects looming. Meanwhile, Apple’s preference for Google’s AI and OpenAI’s decision to incorporate ads in ChatGPT highlight shifts in strategy. Market dynamics hint at a potential bubble, while companies like Anthropic, founded by ex-OpenAI staff, could thrive with a more sustainable model. Investors now demand proof of profitability as the landscape evolves.
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