OpenAI, maker of ChatGPT, is expected to lose about $5 billion this year on revenue of $3.7 billion.
The company brought in $300 million in revenue last month, up 1700% increase from the beginning of last year, and is on track for revenue of $11.6 billion next year, said a person close to OpenAI who asked for anonymity because the figures are private.
The New York Times first reported the financials of OpenAI on Friday, after seeing company documents.
OpenAI, which is backed by Microsoft, is seeking a funding round that would value the company for more than $150 billion, said a person briefed on the matter. Thrive Capital is leading the round and plans to invest $1 billion. Tiger Global is also expected to take part.
OpenAI’s Chief Financial Officer, Sarah Friar, told investors via email on Thursday it’s an oversubscribed funding round and is expected to close next week. That news follows a spate of high profile exits most prominently that of technology chief Mira Murati, whose departure from OpenAI after six and a half years was announced a day earlier.
News broke this week that the board of OpenAI is weighing a plan that would reshape the company as a for profit entity. The business will retain its nonprofit element as a separate entity, sources with direct knowledge of the matter said. It’s cleaner for investors, and it’s easier for OpenAI employees to gain liquidity, the sources said.
The services of OpenAI have exploded in popularity since the launch late last year of ChatGPT, to which the company sells subscriptions to a range of tools and licenses to the GPT family of large scale language models powering much of the generative AI boom. Running those models requires huge investments in graphics processors from Nvidia.
The Times reported the nearly $5 billion loss this year was attributed to employee salaries and office rent, as well as service operations costs. The expense does not include stock compensation but is “one of several large expenses that are not fully explained in the documents,” the paper said.
