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Not even OpenAI's $200/mo ChatGPT Pro plan can turn a profit (www.theregister.com)
submitted 2 years ago by to c/technology@lemmy.world
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[–] 84 points 2 years ago (2 children)

With OpenAI being at the center of the AI hype, I would've thought they'd be raking in the dough instead of losing $5 billion. So it's really just Nvidia making money on this bullshit, huh? It'll hurt when the hype dies down and Nvidia drops from the second top spot on the S&P 500. We're all going to feel that one.

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  • [–] 114 points 2 years ago (2 children)

    You know, to make money in a gold rush, don't dig, sell shovels.

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  • [–] 2 points 2 years ago (2 children)

    What is AI gold then?

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  • [–] 4 points 2 years ago (1 child)

    Obsolescence of human workers/employees.

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  • [–] 1 point 2 years ago (1 child)

    Makes no sense given that 80% of jobs are bullshit jobs.

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  • [–] 1 point 2 years ago*

    Not sure you understood my point. The "Gold" that people search for when trying to push "AI" is that they have to pay less wages, because they need fewer employees. Wherever they find it, or not is irrelevant.

    Automation was always heralded as a time saver, but do employees really need to work less to get the same amount of money? No, because automation is always used to give the top percentages more money for less work, not the workers or the broad public.

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  • [–] 23 points 2 years ago* (3 children)

    Eh all these companies operate as loss leaders until they capitalise the market.

    • CNBC has confirmed that OpenAI expects about $5 billion in losses on $3.7 billion in revenue this year — figures first reported by The New York Times.
    • Revenue is expected to jump to $11.6 billion next year, a source with knowledge of the matter confirmed.

    So yeah some small loses here and there to make back far more in the future.

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  • [–] 12 points 2 years ago

    The assumption is that they'll develop some kind of moat, but there are plenty of other AI models on offer or in development. It would also be useless capturing a market when the companies that would be their customers realize they're not making money on the AI themselves.

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  • [–] 9 points 2 years ago

    Which is fine in theory, but "expected" based on what?

    They haven't demonstrated any ability to meaningfully improve their models ("meaningfully" meaning "sufficient to actually address the very serious concerns about their practical usability), they haven't shown any ability to meaningfully capture enterprise sales for their API, and their conversion rate on free users to paid users is abysmal. Their only stated plan to increase revenues is doubling their prices, which given their already terrible user retention doesn't actually seem like a reliable way to bring revenue up. Jacking up prices only works when your users find you indespensible, and everything OpenAI offers can be found elsewhere for less.

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  • [–] 6 points 2 years ago (1 child)

    You have to get people hooked on your product, though.

    If they and every other AI company just evaporated no one would really be bothered.

    You can't capitalize a market that doesn't really exist.

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  • [–] 4 points 2 years ago

    This is exactly the problem. There are plenty of people who will crawl out of the woodwork to tell you how they've found a way to make AI "useful", but very, very few could put their hand on their heart and say that it was "essential" to their workflow or their own happiness and wellbeing in any meaningful way.

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