OpenAI could lose up to $5 billion in 2024 and might run out of cash within 12 months, according to an analysis by The Information. The report, based on undisclosed financial data and insider information, indicates that OpenAI is set to spend around $7 billion on AI training and another $1.5 billion on staffing, far surpassing rivals like Amazon-backed Anthropic, which expects a 2024 burn rate of $2.7 billion.
These high expenses could necessitate another financing round within a year to support OpenAI’s balance sheet. Having completed seven funding rounds and raised over $11 billion, most recently with ARK Investment Management in April, OpenAI may need more capital soon.
OpenAI did not immediately respond to requests for comment. Since launching ChatGPT in November 2022, the AI assistant has gained over 100 million weekly users. On July 18, OpenAI announced a new generative AI model, “GPT-4o Mini.”
OpenAI is reportedly developing an advanced AI model named “Strawberry,” which aims to surpass the capabilities of the current flagship GPT-4o by offering more advanced reasoning and humanlike responses.
The company is also facing regulatory challenges, including a potential inquiry by the United States Securities and Exchange Commission over alleged misconduct related to non-disclosure agreements. On July 23, US lawmakers sent a letter to OpenAI CEO Sam Altman, expressing concerns about the company’s safety standards and employment practices.
The letter, first obtained by the Washington Post, questions OpenAI’s transparency and asks whether the company will “commit to making its next foundation model available to U.S. Government agencies for pre-deployment testing, review, analysis, and assessment.”