OpenAI sees $5 billion in losses and plans a huge ChapGPT fee increase

According to documents seen by New York Timesthe company expects $3.7 billion in revenue in 2024. ChatGPT, which launched in 2022 and sparked the current generative AI frenzy, is expected to generate $2.7 billion this year, while $1 billion of dollars will come from other businesses.

But OpenAI sees a $5 billion loss, which doesn’t include stock-based compensation, Times said. Its biggest cost is the computing power it gets from top partner and investor Microsoft, whose cloud services host OpenAI’s products.

The losses come despite monthly revenue in August hitting $300 million, up 1,700 percent since the start of 2023, the report added. Growth will continue to grow, with OpenAI forecasting revenue to triple in 2025 to $11.6 billion and eventually reach $100 billion in 2029.

Part of the future revenue gains would come from increasing the fee that ChatGPT users pay. right Timesit will rise to $22 per month by the end of the year from $20 today, then rise to $44 over the next five years.

OpenAI declined to comment Times and didn’t answer right away Of luck request for comment. CNBC confirmed the annual revenue and loss forecasts separately.

Documents seen by Times were presented to potential OpenAI investors as the startup seeks to bring in $7 billion in a fundraising round that could value the company at $150 billion.

OpenAI has reportedly held talks with Microsoft as well as other tech giants like Apple and Nvidia for the funding round, which is expected to close next week.

Venture capital firm Thrive Capital is the lead investor with Tiger Global Management and UAE-backed MGX also in talks.

But the sources said Wall Street Journal that Apple is no longer in talks to participate in the fundraising. Apple did not immediately respond to a request for comment.

Meanwhile, OpenAI is preparing to announce a new structure that will see its for-profit arm no longer subordinate to its nonprofit foundation’s board of directors.

Wednesday’s sudden resignation of chief technology officer Mira Murati was the latest executive departure to signal future change at OpenAI following the 2023 attempt to oust CEO Sam Altman.

Amid the transition to a for-profit business, sources told Bloomberg that OpenAI could give Altman a 7 percent stake in the company, which could lead to a $10 billion infusion of wealth for the CEO the 39-year-old. But the company denied the report.

“The board discussed whether it would be beneficial to the company and our mission for Sam to be compensated with equity, but no specific figures were discussed or decisions made,” said Bret Taylor, president of OpenAI. a statement to wealth Friday.

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