Microsoft-backed OpenAI projects $5B loss on $3.7B sales this year
Microsoft-backed OpenAI anticipates a loss this year despite generating approximately $1.7B in sales, as rising costs impact profitability. The company plans to increase ChatGPT subscription fees significantly over the next five years, aiming for $3.6B in revenue next year. OpenAI's monthly revenue surged to $100M in August, with a user base of 350M. The firm is closing a funding round with major investors like Microsoft and Nvidia, while Apple has withdrawn from discussions. The valuation is expected to rise significantly compared to last year.
Microsoft (NASDAQ:MSFT)-backed generative AI company OpenAI expects to lose roughly $5B this year despite generating about $3.7B in sales as the firm behind ChatGPT grapples with rising costs.
The financials, first reported by The New York Times, also indicate that OpenAI, one of Silicon Valley’s hottest tech startups, intends to generate $11.6B in revenue next year and $100B in 2029, with aggressive price hikes planned for ChatGPT.
By the end of the year, the company expects to raise the ChatGPT monthly fee by $2 to $22 before increasing it to $44 over the next five years.
However, OpenAI is expected to remain in the red this year, driven by costs related to running its services, employee salaries, office rent, and other expenses.
Meanwhile, OpenAI’s monthly revenue reached $300M in August, an over-threefold rise from a year ago, as its monthly user base swelled to roughly 350M people as of June, up from about 100M in March.
The NYT analysis, backed by company documents reviewed by a financial professional, comes as OpenAI plans to close its latest funding round next week with the participation of tech giants such as Microsoft (MSFT) and Nvidia (NVDA).
According The Wall Street Journal, Apple (AAPL) has withdrawn from the discussions to join the round, which could value the San Francisco-based firm at $150B, sharply higher than the $30B value it commanded only a year ago.