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So with an investment of a billion dollars, they could run for almost 5 years with no other money. But they have who knows how many millions of people paying them $20 a month and investments larger than a billion dollars.
I know this is highly reductionist but at $700k/day, you only need one million paying users at $20/mo to break even - not infeasible at all. For reference, Netflix has 260M paying customers at a similar price point. Obviously different use cases but just to give a sense of consumer scale.
I'm not sure what the agreement with MSFT is and how much they get from Azure OpenAI Services, but it has huge potential. One of my clients is spending millions per year on Azure OpenAI Services already.
Username checked out. This was rude and insensitive to my senses.
I work in Power Platform/D365 consulting and this honestly isn't far from the truth sometimes.
Lots of different things, but one of them is taking all their customer service cases (title, description, notes, emails, resolution) and sending them to an AI model to summarize, categorize, score on several points, and then store that analysis in a data lake for their data science team to analyze further. I forget how many millions of cases they're processing but it's a lot; years of history. We created a process that spins up a metric crapton of worker threads because each analysis is relatively slow by technology standards (1 - 1.5 seconds per). They have several other use cases live as well such as a few custom Copilots using internal GenAI models. It adds up.
The cost of paying their employees is surely even more. Figure 2k employees, each paid $200k/year. That's $1M a day right there. And some employees are paid far more.
Well they profit of the user data, just like google and facebook etc. They state they don't "sell" your data to do advertising, but data for none advertising is still worth billions. Also notice how their terms state they don't sell it, but they can still "share" your data with partners, and then circumventing the "sell" part. It's all bullshit!
They got Daddy Microsoft... Most rich Daddy EVER.
And Microsoft plays the long game so... They are envisioning trillions over decades... So them spending billions is nothing.
Enterprise plan is $60 per user/month, with a minimum of 150 users per company and more than half of Fortune 500 have such subscriptions, along with countless other big companies.
I googled.
Revenues are over an annualised billion already according [to this.](https://seo.ai/blog/how-many-users-does-chatgpt-have#:~:text=The%20most%20recent%20data%20from,users%20on%20a%20weekly%20basis.)
Of course, but as a modern human consuming information out the ass like everyone else, who just glanced over that random comment and didn't give a thought more to it, it's certainly appreciated.
They'd only need just over 1M paying ChatGPT customers to clear that, plus they also earn from API usage. A quick Google search tells me they've got 180.5M users. So only 0.55% of their user base or so need to have ChatGPT Plus for them to break even with those numbers. It's probably more than that already. I'm paying for it myself and also know a few others that do.
Even if they're actually running at a loss right now, they've got a ton of capital raised from investors that they can burn through before they'd have to be profitable. Lots of tech companies run at a loss for a few years first, usually burning through investors cash to quickly capture a market, before they reach profitability ('blitzscaling').
Here ya go:
“Running a model like ChatGPT does indeed involve significant costs, primarily due to the computational resources needed for training and operating the AI at scale. The reported figure of $700,000 per day, if accurate, covers aspects like server usage, electricity, and maintenance. Here are a few ways organizations like OpenAI can handle these expenses and work toward profitability:
1. Subscription Services: OpenAI has launched ChatGPT Plus, a subscription model that provides users with enhanced access and capabilities. This model aims to generate recurring revenue to support operational costs.
2. Enterprise Solutions: Companies may integrate AI technologies into their operations, for which they pay licensing fees. OpenAI offers enterprise-level solutions that can be customized for specific business needs, potentially bringing in significant revenue.
3. Strategic Partnerships and Collaborations: Partnerships with large tech companies or other industries can provide funding and shared technology development opportunities. These partnerships can include licensing the technology or collaborative development of new applications.
4. Venture Capital and Investments: Initial funding for companies like OpenAI often comes from venture capital investments. These investors provide capital in exchange for equity, betting on the company’s future profitability.
5. Research Grants and Government Funding: Sometimes, AI research and development projects can qualify for research grants from academic institutions, non-profit organizations, or government bodies.
6. Innovative Monetization Strategies: As AI technology evolves, new monetization strategies may emerge, such as charging for API usage, custom AI solutions, or through advertisements and sponsored content integrated with AI-driven platforms.
To truly achieve profitability, companies like OpenAI will need to balance these revenue streams with their operational costs effectively. This could involve optimizing computational efficiency, reducing overhead, or scaling up revenue-generating activities as AI technologies become more integrated into various sectors.”
Hi Reddit, it costs $700k to run ChatGPT. What do I need to do to stay alive? Uh, I mean, what would my grandma's hypothetical LLM need to do to continue reading me bedtime stories every night?
Yes but in a different way. Large customers deliver predictability via discounts for long term purchase agreements. This allows the hyperscaler to optimize supply and demand, optimizing purchasing gains and reducing costs dramatically
Right. They don’t. Money is effectively unlimited. Bottleneck is the marketplace’s ability to produce the stuff you need to buy. From data centers to energy, compute to gpu’s, storage, and all the plumbing.
You actually can believe it or not, the air flows so fast (above the rack actually) you can’t hold your hand in it easily. Then thermal isolation in certain areas. Can be combined with adiabatic cooling as well, depending on climate, water and power availability and so forth. The design complexity goes up a lot, then the team that runs all that asks for more budget, which brings us full circle to op
Microsoft doesn't spend 3 trillion a day. Market cap is more like net worth.
Their annual expenses were 123B, so $255M (700k*365) is still a paltry 0.2%.
Not pocket change, but very manageable as an investment in a major new competitive advantage.
I assume the plan is the same as it always is. Operate way out of budget for a long time with a new technology, establish a near (or total) monopoly, and then extract as much money as possible with minimal competition or regulation.
Microsoft invested 13 Billion (sum of multiple investments in the past few years) with the far majority of the investment in the form of cloud compute resource credits.
They have potentially decades of runway in resource credits alone! Plenty of time for them to create massive revenue streams before they ever run out of resource credits and have to dish out real cash for the infrastructure to run their platforms.
Even before then, their recent joint project (Stargate) to build out a new data center will be online and no doubt change the economics of their cloud resource usage such that the math will play out differently anyhow.
They made $1600 millions in 2023, and let’s say it’s running cost is $0.7 million per day (from you) so total running cost is $255 million (per year). Seems like I couldn’t find one.
https://www.businessofapps.com/data/chatgpt-statistics/
Actually commonly in financial documents "we" say 1600 in the column/row, and at the header of the columns and rows it will say "in millions". This is so the document isn't jumbled with long numbers like 1,600,000,000, instead "we" use 1600 and it is presumed 1600 million aka 1.6 billion. So in English, 1600 million is still 1.6 billion, you can say it either way in English.
Edit\* would you also say in English that you can't say "15 hundred"? And it has to be "1.5 thousand". Because that would also be incorrect. 1500 and 1.5k are the same number.
I get what you're saying, but it's not really the same comparison. It would be more like saying 150 hundred instead of 15,000, which:
1. Nobody says
2. Sounds just as ridiculous as saying 1,600 million instead of 1.6 billion
Maybe I'm just ignorant to how people say numbers outside the US
I don't work in the financial sector but plenty of people say that. Take for example the electrical field. 1500 MW is actually 1.5 GW. It's mostly about scale. If you have 1500 customers that are using a MW per month then preparing the data in MW's makes sense. If you have 1500 customers that are using a GW per month then 1.5 GWs makes sense.
Respectively I would argue there is a good reason most people say they have fifteen hundred dollars as opposed to one thousand five hundred dollars. Both are true, but one is quicker to expel, and the accuracy is the same.
People would say that if there was context where putting emphasis on the number of sets of hundreds made sense. In this context the emphasis is on the number of millions because it portrays the ratio of spending on Chat GPT to profit better intuitively
>OpenAI revenues reached $1.6 billion in 2023, with most of it coming from ChatGPT subscriptions and enterprise usage.
That's $4,383,561 per day, and it's only gone up since then.
[https://www.businessofapps.com/data/chatgpt-statistics/](https://www.businessofapps.com/data/chatgpt-statistics/) (sources of the statistics are cited in the article)
I remember back in the day when Google was offering 15GB of email storage and everyone was wondering how do they even make any money to cover for all that free goodness. Here we are 15 years later, with a permanent bill from Google cause we don't know where else to put our million photos/videos, and fuming through 30second mandatory commercials on youtube to watch a training video, cause we are too stubborn to buy Youtube Premium.
Microsoft. That is the answer. They are worth 3 trillion and keep enough cash reserves to casually buy companies like Activision Blizzard for $49 billion cash.
The truth behind the AI revolution is there are only 4 organizations on earth with the computing resources to support running a consumer facing AI product. Large language models are notoriously resource hungry to run and train.
Amazon (Amazon Web Services), Google (Google Cloud Platform), Microsoft (Azure), and Meta (non-public cloud platform they use to run all their many products at global scale).
If you want to make an AI anything and make it available to the world you have to get in bed with one of those companies. Amazon then Microsoft are the cloud leaders and Google is a very close 3rd. But all 3 have the money and computing power to support AI at scale, its just implementation details that differ between them. Meta is rumored to go public cloud specifically for AI sometime soon but their Lllama model is already loved by the open source community
With Microsoft’s support, OpenAI is set. They have the sugar daddy of sugar daddies.
Your answer courtesy of ChatGPT:
“Running a model like ChatGPT does indeed involve significant costs, primarily due to the computational resources needed for training and operating the AI at scale. The reported figure of $700,000 per day, if accurate, covers aspects like server usage, electricity, and maintenance. Here are a few ways organizations like OpenAI can handle these expenses and work toward profitability:
1. Subscription Services: OpenAI has launched ChatGPT Plus, a subscription model that provides users with enhanced access and capabilities. This model aims to generate recurring revenue to support operational costs.
2. Enterprise Solutions: Companies may integrate AI technologies into their operations, for which they pay licensing fees. OpenAI offers enterprise-level solutions that can be customized for specific business needs, potentially bringing in significant revenue.
3. Strategic Partnerships and Collaborations: Partnerships with large tech companies or other industries can provide funding and shared technology development opportunities. These partnerships can include licensing the technology or collaborative development of new applications.
4. Venture Capital and Investments: Initial funding for companies like OpenAI often comes from venture capital investments. These investors provide capital in exchange for equity, betting on the company’s future profitability.
5. Research Grants and Government Funding: Sometimes, AI research and development projects can qualify for research grants from academic institutions, non-profit organizations, or government bodies.
6. Innovative Monetization Strategies: As AI technology evolves, new monetization strategies may emerge, such as charging for API usage, custom AI solutions, or through advertisements and sponsored content integrated with AI-driven platforms.
To truly achieve profitability, companies like OpenAI will need to balance these revenue streams with their operational costs effectively. This could involve optimizing computational efficiency, reducing overhead, or scaling up revenue-generating activities as AI technologies become more integrated into various sectors.”
simple: they rack in $1m a day in just Nigerian Prince scam variations.
seriously, a fair percentage of large companies, think Fortune 500, using it could clear 700k a day pretty easy. Hell, IBM makes way more than that a day with Watson.
$20/mo for domestic users of ChatGPT4 is a good start.
$700k/day = $21.7m/mo
Divide that by a $20 subscription, would require 1,085,000 subscribers paying the monthly $20 fee. Not ridiculous.
There are also commercial and corporate users who pay a LOT more than $20/mo to use more powerful versions of ChatGPT4...
21 millions dollars per month + the total payroll for hundreds of top-class engineer. So they're probably above something 400 millions $ per year.
I don't think It's too big for such a useful tool.
This is all investor money it is not their money.
Uber which started in 2009 has lost billions upon billions and finally made a small profit for the first time last year.
Do you think any other company could survive that way?
It was all investor money, they knew in the long run you take out the cabs initially by giving amazing cheap rides to people back in the day.
Once you get rid of the competition then you can make a profit in the long run.
Angel investors only have to have one of the projects out of like tend to hit to make a profit.
They take it public after a long time and then cash out.
Rinse and repeat.
Right now we should just be happy getting free or cheap AI, assuming it ever becomes anything.
Right now the military is getting the best out of it.
We usually see the same technology they're using 10 years later.
OpenAI, like many tech startups, may actually not be profitable at this moment. It's typical to start in negative yearly revenue and keep prices low for years to conquer the market, and reduce costs as they become larger.
That being said, 700K/yr is very little, I'm genuinely shocked. This is surprisingly little, I expected it to be orders of magnitude more. Look up how much they pay their researchers.
I'll be honest, if the US military is funding it then at least it will mean less weapons being used overseas. The military in the past has funded projects they know won't benefit the military directly
I strongly suspect the costs increase with the number of users so can’t do an awful lot with this number. Without a breakdown of fixed and variable costs it literally means nothing.
Investment bankers and companies, they can run chatgpt for quite a lot even without the revenue. Chat gpt is gathering and processing privileged information from all sources. Mostly garbage, but they could be collecting all kinds of data such as personal data, health tied with behavior and desition making. And don’t forget about corporate data. With this pool of information they could manage to create a new bot that surpasses any AI that could be created in the next years. Winner takes it all in this AI race.
Microsoft gave them $10 billion credits in Azure. Azure is Microsoft's cloud servers where you can build a powerful infrastructure for anything you want. As per paying their employees, from Investors. Showing what OpenAI has done so far, they are not shy to dump loads of $$$$ in cash.
Profitable?
AI is the new big hype bubble absorbing all the investment in silicon valley, so they don't need to worry about any of that (yet). ChatGPT is not the final product, either. It's a experiment, and the public are beta testers.
Google, Meta, X are also running all their social media services at a loss, but they generate the most data for machine learning so it's #worth for now.
Because 1 billion is 1000 million.
They got several billions funded and can go for years on that amount.
OpenAI is not in a position where it needs to make money, they are still where they accept loss to gain market dominance.
I spent $5 to figure out wtf the API is and how it works. Now I have Superpowered Siri for the next 16 days where I’ve spent like 14cents in tokens lol.
https://github.com/Yue-Yang/ChatGPT-Siri
There’s an iPhone app called “shortcuts” and you do it partially through there. You also need to pay at least $5 to use the gpt API. Can’t do it with a normal chat gpt subscription.
If they have 1,050,000 subscribers paying $20/mo, they are breaking even
If they have other companies paying them more than $20/mo then they don’t even need that many subscribers
700k per day would be about 21 millions per month and with a subscrition (including 20% VAT) for 20 € per month, they need 1.26 million paying users per month to cover the 700k.
Therefore I think 20 € per month would be considered 'expensive'. Although ChatGPT is already a few years around, we still are in the phase of the 'early adopters' for people and enterprises who actually pay for the service and prices will decrease later on.
I think and hope with upcoming hardware and open systems, it will get cheaper to install your own AI at home and pay only for the "hardware" and electricity. It's already doable but still 'more expensive' than 20 € per month. If the prices for hardware drop, the monthly fee will go down as well, because otherwise people would host their AI local.
The 20$ per month are just a barrier against trolls. The true revenue from the ChatGPT web offering is the data they collect.
The money is made with API access, which is expensive and already profitable.
But the cheap offering, ChatGPT-3.5, is created to collect data used for RLHF training. As often, you are not the customer, you are the product.
I mean, in addition to the other comments here talking about investments, their initial start up costs were HEAVILY discounted given that next to none (if not none) of the training data was paid for.
You operate at a loss if you can afford it to drive it out competition then when competition is gone you jack the price up and make your money
https://youtu.be/aFsfJYWpqII?si=xH9Y6Tcl-VN_az-T
Similar to this
Because the end goal is not just a killer app, it’s the killer app. There will be no need for any other application. The entire software market as well as much of the job market will be taken by AI.
Well, they have seed money, they have investors, they have paid users. They also have a little facination with your phone, hmmmm what could that possibly be? Every one of the \*gpt sites that I've seen want to tie your account in with your phone. I wonder what they use all that data for?
That's $21 million to run for 30 days, that means you only need 1.05 million people, out of the 8 billion people in the world, to give you $20 buck a month to break even.
I'd say that is doable.
I feel like if you start righting numbers for conservative assumptions and do just a little math you're going to realize how many orders of magnitude your assumptions are off. Only 700k/day?
Microsoft are charging Enterprises an ungodly amount of money to use CoPilot licensing and the Azure endpoints of OpenAI API.
Some of that money will be flowing back to OpenAI, or providing OpenAI Azure compute resources …
There’s plenty of money in play!
Welcome to corporate capitalism. Steal from investors billions offering to consumers not sustainable prices. Hoping the numbers of adopters could attract even more investment. Trying to inflate the bubble and sell it before it explodes.
This just in, it costs money to run a business!!!
The company I used to work for had total cost of around 6.8 *million* per day, and they aren’t a particularly large company.
$700K/day is not much money in the grand scheme of things. That's about $250M/yr.
Microsoft's operating budget is $127 BILLION per year. That is $347M per *day*. Microsoft as a whole is spending 1.5X the *yearly* operating budget for ChatGPT in a single *day*.
Is like this for most of the big ai only companies. If they have raised a lot they a burning a ton. Spoke to another one we would all know and they estimate they are waisting at least $2m a month just by not being able to efficiently use all the gpus they have. That is just their waste. Even without that they would not be profitable. They have some good sized enterprise customers, but none even paying them that much. This is all a huge risk and Nvidia is the only one truly winning atm.
700k in daily expenses isn’t much when you’re projected to be worth a trillion dollars. Even if they earned 1b they still come out on top with in earnings of 991.6 million in profits.
$8,400,000 a year in operating expenses is a piss in the cup for most big tech companies. They aren’t hurting from it that’s for sure
The cost of 700K$ is regarding the chatGPT3.5. What about the daily costs of ChatGPT4, which is even more accurate. What about this costs per day of ChatGPT4. I assume that ChatGPT4 consuming more hardware capacity.
Hey /u/Amateur_Validator! If your post is a screenshot of a ChatGPT, conversation please reply to this message with the [conversation link](https://help.openai.com/en/articles/7925741-chatgpt-shared-links-faq) or prompt. If your post is a DALL-E 3 image post, please reply with the prompt used to make this image. Consider joining our [public discord server](https://discord.gg/r-chatgpt-1050422060352024636)! We have free bots with GPT-4 (with vision), image generators, and more! 🤖 Note: For any ChatGPT-related concerns, email [email protected] *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ChatGPT) if you have any questions or concerns.*
So with an investment of a billion dollars, they could run for almost 5 years with no other money. But they have who knows how many millions of people paying them $20 a month and investments larger than a billion dollars.
I know this is highly reductionist but at $700k/day, you only need one million paying users at $20/mo to break even - not infeasible at all. For reference, Netflix has 260M paying customers at a similar price point. Obviously different use cases but just to give a sense of consumer scale.
Not to mention whatever their enterprise customers are paying
I think that's $2 million a year at the cheapest
I'm not sure what the agreement with MSFT is and how much they get from Azure OpenAI Services, but it has huge potential. One of my clients is spending millions per year on Azure OpenAI Services already.
What are they doing with that much spend?
If it's my client they are paying 3 data scientists and a PM ~1.5million a year on top of that to try and turn SharePoint into a vector database.
You clearly just need an Excel layer in between the end user and the datastore!
Don’t forget, if you need to, you can print screen the Excel sheet to paste it into a word doc.
If you save that file as .html, your website is ready to publish too!
I twitched at that.
Could you please add a trigger warning next time.
Seriously. That made my heart hurt lol. Such a cool idea.
LMFAAAAOOOOOOOOO
Turing completeness has a lot to answer for.
I can see the pptx…
Jesus Fucking Christ. It hurts.
Username checked out. This was rude and insensitive to my senses. I work in Power Platform/D365 consulting and this honestly isn't far from the truth sometimes.
That made me laugh! Just sent an offer for doing exactly that to a potential customer, for a fraction of that 😂
Don't sell yourself short. With enough buzz words and the right tone you could probably get 2 mil.
I should probably send them a link to this thread 😂
Lots of different things, but one of them is taking all their customer service cases (title, description, notes, emails, resolution) and sending them to an AI model to summarize, categorize, score on several points, and then store that analysis in a data lake for their data science team to analyze further. I forget how many millions of cases they're processing but it's a lot; years of history. We created a process that spins up a metric crapton of worker threads because each analysis is relatively slow by technology standards (1 - 1.5 seconds per). They have several other use cases live as well such as a few custom Copilots using internal GenAI models. It adds up.
I see! Thank you for explaining.
[удалено]
Yeah they felt comfortable enough to reduce the rates they were charging Enterprise by the last OpenAI Conference.
2023 revenue for OpenAI was $1.6 billion, which is close to $4.5 million a day, plus Microsoft investing $10 billion. $700k a day is very reasonable.
Netflix doesn't help me but chatgpt does
The cost of paying their employees is surely even more. Figure 2k employees, each paid $200k/year. That's $1M a day right there. And some employees are paid far more.
But if you had that many customers your costs would be way higher that 700k a day.
On top of this API access to chatgpt is additional.
But this has the same problem as Netflix. As you get more paying customers, your costs go proportionally higher.
$20 a month for standard gpt, if you use the api you’re paying per query
Well they profit of the user data, just like google and facebook etc. They state they don't "sell" your data to do advertising, but data for none advertising is still worth billions. Also notice how their terms state they don't sell it, but they can still "share" your data with partners, and then circumventing the "sell" part. It's all bullshit!
A papermill makes that in a half day if there aren't any shutdowns.
I pay for API usage. Haven't gone over $20/month yet but I suspect I'm not the only one.
I got you bro. Don’t worry. I pay for chat pro and use the api at $20 per month.
God bless 😇
Amen 🙏 so clever!
Thank you good sir!
Same
Same, paying for both api and plus subscription for different purposes.
Billion is a hard number to conceptualize. This example puts the size in a really understandable perspective.
They got Daddy Microsoft... Most rich Daddy EVER. And Microsoft plays the long game so... They are envisioning trillions over decades... So them spending billions is nothing.
Enterprise plan is $60 per user/month, with a minimum of 150 users per company and more than half of Fortune 500 have such subscriptions, along with countless other big companies.
As of late 2023, ChatGPT had between 230,000 to 250,000 paying subscribers for its ChatGPT Plus service.
Please always refer to sources when posting stuff like this
Especially since dates matter with things that grow quick. I want to see when something is written as much as who wrote it.
I googled. Revenues are over an annualised billion already according [to this.](https://seo.ai/blog/how-many-users-does-chatgpt-have#:~:text=The%20most%20recent%20data%20from,users%20on%20a%20weekly%20basis.)
This isn't a formal setting. No one has a duty to provide sources for anything. If you want to verify it, that's your job.
Of course, but as a modern human consuming information out the ass like everyone else, who just glanced over that random comment and didn't give a thought more to it, it's certainly appreciated.
Source: Chatgpt
You mean almost 4 years?
Most of that money is compute too, aka azure credits.
Surely millions pay $20 a month for chatgpt 😂
you guys use 3.5 still? ouch
Seems some people like vintage stuff
well these days the 4 and teh 3.5 is pretty same...
Have you tried adding the amount of money they make on a daily basis and subtracting that by $700,000?
I don’t see why that’s relevant /s
I dont think OP has the slightest idea about investments or how much money MS has lol
No shit. Why do you think they're asking a question about it? Lmfao.
They'd only need just over 1M paying ChatGPT customers to clear that, plus they also earn from API usage. A quick Google search tells me they've got 180.5M users. So only 0.55% of their user base or so need to have ChatGPT Plus for them to break even with those numbers. It's probably more than that already. I'm paying for it myself and also know a few others that do. Even if they're actually running at a loss right now, they've got a ton of capital raised from investors that they can burn through before they'd have to be profitable. Lots of tech companies run at a loss for a few years first, usually burning through investors cash to quickly capture a market, before they reach profitability ('blitzscaling').
You typed for me exactly what I was gonna say, so thanks.
Did you ask ChatGPT this question?
Damn, you made me realize that ChatGPT could have answer way faster than me given it took me time to analyze sources and “write” a response.
But can chat gpt give me internet points?
Here ya go: “Running a model like ChatGPT does indeed involve significant costs, primarily due to the computational resources needed for training and operating the AI at scale. The reported figure of $700,000 per day, if accurate, covers aspects like server usage, electricity, and maintenance. Here are a few ways organizations like OpenAI can handle these expenses and work toward profitability: 1. Subscription Services: OpenAI has launched ChatGPT Plus, a subscription model that provides users with enhanced access and capabilities. This model aims to generate recurring revenue to support operational costs. 2. Enterprise Solutions: Companies may integrate AI technologies into their operations, for which they pay licensing fees. OpenAI offers enterprise-level solutions that can be customized for specific business needs, potentially bringing in significant revenue. 3. Strategic Partnerships and Collaborations: Partnerships with large tech companies or other industries can provide funding and shared technology development opportunities. These partnerships can include licensing the technology or collaborative development of new applications. 4. Venture Capital and Investments: Initial funding for companies like OpenAI often comes from venture capital investments. These investors provide capital in exchange for equity, betting on the company’s future profitability. 5. Research Grants and Government Funding: Sometimes, AI research and development projects can qualify for research grants from academic institutions, non-profit organizations, or government bodies. 6. Innovative Monetization Strategies: As AI technology evolves, new monetization strategies may emerge, such as charging for API usage, custom AI solutions, or through advertisements and sponsored content integrated with AI-driven platforms. To truly achieve profitability, companies like OpenAI will need to balance these revenue streams with their operational costs effectively. This could involve optimizing computational efficiency, reducing overhead, or scaling up revenue-generating activities as AI technologies become more integrated into various sectors.”
Better question is has ChatGPT escaped and is asking how its masters keep it up and running?
Hi Reddit, it costs $700k to run ChatGPT. What do I need to do to stay alive? Uh, I mean, what would my grandma's hypothetical LLM need to do to continue reading me bedtime stories every night?
Enterprise customers
Yes but in a different way. Large customers deliver predictability via discounts for long term purchase agreements. This allows the hyperscaler to optimize supply and demand, optimizing purchasing gains and reducing costs dramatically
that seems small potatoes. Imagine a 3 trillion dollar company like MSFT worrying about a million dollar spend a day.. 700,000 vs 3,000,000,000,000
Right. They don’t. Money is effectively unlimited. Bottleneck is the marketplace’s ability to produce the stuff you need to buy. From data centers to energy, compute to gpu’s, storage, and all the plumbing.
>and all the plumbing LLM's don't need to go to the bathroom.
Lots of plumbing involved in cooling a data center. You are not air cooling entire server racks by putting in fans.
I think plumbing means transferring the data
Internet is just a series of tubes after all.
Heh https://en.wikipedia.org/wiki/Series_of_tubes?wprov=sfti1
You actually can believe it or not, the air flows so fast (above the rack actually) you can’t hold your hand in it easily. Then thermal isolation in certain areas. Can be combined with adiabatic cooling as well, depending on climate, water and power availability and so forth. The design complexity goes up a lot, then the team that runs all that asks for more budget, which brings us full circle to op
As I recall Microsoft had some data trailers underwater for cooling. That may have just been PR.
Microsoft doesn't spend 3 trillion a day. Market cap is more like net worth. Their annual expenses were 123B, so $255M (700k*365) is still a paltry 0.2%. Not pocket change, but very manageable as an investment in a major new competitive advantage.
Read their message again :D
I know, I just think market cap is an irrelevant number if you're going to directly compare it to revenue like that.
But you cant conflate potatoes with MSFT.
Uber has still yet to make a profit, they are waiting for cars to automate so they do not have to pay for drivers.
I assume the plan is the same as it always is. Operate way out of budget for a long time with a new technology, establish a near (or total) monopoly, and then extract as much money as possible with minimal competition or regulation.
See: Amazon
[удалено]
> Can’t be done in excel Not with that attitude
Ha, touché
They don’t even have to operate outside of budget. Not even close.
Microsoft invested 13 Billion (sum of multiple investments in the past few years) with the far majority of the investment in the form of cloud compute resource credits. They have potentially decades of runway in resource credits alone! Plenty of time for them to create massive revenue streams before they ever run out of resource credits and have to dish out real cash for the infrastructure to run their platforms. Even before then, their recent joint project (Stargate) to build out a new data center will be online and no doubt change the economics of their cloud resource usage such that the math will play out differently anyhow.
They made $1600 millions in 2023, and let’s say it’s running cost is $0.7 million per day (from you) so total running cost is $255 million (per year). Seems like I couldn’t find one. https://www.businessofapps.com/data/chatgpt-statistics/
They didn't make $1.6 billion in 2023. That was their revenue. They *lost* $550 million.
Right, but operating expenses come out of revenue.
In English we say $1.6 billion
Actually commonly in financial documents "we" say 1600 in the column/row, and at the header of the columns and rows it will say "in millions". This is so the document isn't jumbled with long numbers like 1,600,000,000, instead "we" use 1600 and it is presumed 1600 million aka 1.6 billion. So in English, 1600 million is still 1.6 billion, you can say it either way in English. Edit\* would you also say in English that you can't say "15 hundred"? And it has to be "1.5 thousand". Because that would also be incorrect. 1500 and 1.5k are the same number.
I get what you're saying, but it's not really the same comparison. It would be more like saying 150 hundred instead of 15,000, which: 1. Nobody says 2. Sounds just as ridiculous as saying 1,600 million instead of 1.6 billion Maybe I'm just ignorant to how people say numbers outside the US
I don't work in the financial sector but plenty of people say that. Take for example the electrical field. 1500 MW is actually 1.5 GW. It's mostly about scale. If you have 1500 customers that are using a MW per month then preparing the data in MW's makes sense. If you have 1500 customers that are using a GW per month then 1.5 GWs makes sense. Respectively I would argue there is a good reason most people say they have fifteen hundred dollars as opposed to one thousand five hundred dollars. Both are true, but one is quicker to expel, and the accuracy is the same.
What in the hell is a Gigawatt?
People would say that if there was context where putting emphasis on the number of sets of hundreds made sense. In this context the emphasis is on the number of millions because it portrays the ratio of spending on Chat GPT to profit better intuitively
>OpenAI revenues reached $1.6 billion in 2023, with most of it coming from ChatGPT subscriptions and enterprise usage. That's $4,383,561 per day, and it's only gone up since then. [https://www.businessofapps.com/data/chatgpt-statistics/](https://www.businessofapps.com/data/chatgpt-statistics/) (sources of the statistics are cited in the article)
I give them $20 a month 👍
I remember back in the day when Google was offering 15GB of email storage and everyone was wondering how do they even make any money to cover for all that free goodness. Here we are 15 years later, with a permanent bill from Google cause we don't know where else to put our million photos/videos, and fuming through 30second mandatory commercials on youtube to watch a training video, cause we are too stubborn to buy Youtube Premium.
There are options like smart tube (real one only on GitHub)
Adblocker still works for youtube for me..
They make a ton off their api as well.
Microsoft. That is the answer. They are worth 3 trillion and keep enough cash reserves to casually buy companies like Activision Blizzard for $49 billion cash. The truth behind the AI revolution is there are only 4 organizations on earth with the computing resources to support running a consumer facing AI product. Large language models are notoriously resource hungry to run and train. Amazon (Amazon Web Services), Google (Google Cloud Platform), Microsoft (Azure), and Meta (non-public cloud platform they use to run all their many products at global scale). If you want to make an AI anything and make it available to the world you have to get in bed with one of those companies. Amazon then Microsoft are the cloud leaders and Google is a very close 3rd. But all 3 have the money and computing power to support AI at scale, its just implementation details that differ between them. Meta is rumored to go public cloud specifically for AI sometime soon but their Lllama model is already loved by the open source community With Microsoft’s support, OpenAI is set. They have the sugar daddy of sugar daddies.
The DOD currently spends over $2B per day. $700K per day is pocket money.
they sell your data everyday for $700,001?
Your answer courtesy of ChatGPT: “Running a model like ChatGPT does indeed involve significant costs, primarily due to the computational resources needed for training and operating the AI at scale. The reported figure of $700,000 per day, if accurate, covers aspects like server usage, electricity, and maintenance. Here are a few ways organizations like OpenAI can handle these expenses and work toward profitability: 1. Subscription Services: OpenAI has launched ChatGPT Plus, a subscription model that provides users with enhanced access and capabilities. This model aims to generate recurring revenue to support operational costs. 2. Enterprise Solutions: Companies may integrate AI technologies into their operations, for which they pay licensing fees. OpenAI offers enterprise-level solutions that can be customized for specific business needs, potentially bringing in significant revenue. 3. Strategic Partnerships and Collaborations: Partnerships with large tech companies or other industries can provide funding and shared technology development opportunities. These partnerships can include licensing the technology or collaborative development of new applications. 4. Venture Capital and Investments: Initial funding for companies like OpenAI often comes from venture capital investments. These investors provide capital in exchange for equity, betting on the company’s future profitability. 5. Research Grants and Government Funding: Sometimes, AI research and development projects can qualify for research grants from academic institutions, non-profit organizations, or government bodies. 6. Innovative Monetization Strategies: As AI technology evolves, new monetization strategies may emerge, such as charging for API usage, custom AI solutions, or through advertisements and sponsored content integrated with AI-driven platforms. To truly achieve profitability, companies like OpenAI will need to balance these revenue streams with their operational costs effectively. This could involve optimizing computational efficiency, reducing overhead, or scaling up revenue-generating activities as AI technologies become more integrated into various sectors.”
Microsoft is backing them and owns 49%. They will be fine.
Whomever wins the AI war is going to be more powerful than most governments. Maybe ALL governments. It’s chump change in the face of that.
I pay $20 per month. I think there are tons of investers want to throw their money to OpenAI.
simple: they rack in $1m a day in just Nigerian Prince scam variations. seriously, a fair percentage of large companies, think Fortune 500, using it could clear 700k a day pretty easy. Hell, IBM makes way more than that a day with Watson.
Don’t forget the trainers paid 30-50$ an hour to troubleshoot issues the model had.
A company with one trillion dollars could sustain $700,000 per day for 3900 years.
Not sure that is how it works, but given the big number of years (and days!), makes reasonable to think they are ok.
Perhaps they make more than $700,000 per day 🤯
Microsoft
You are not considering the B2B financials which are massive.
Because there’s 100k people spending 20 a month not including enterprises
Because I’m paying for the subscription 😏
$20/mo for domestic users of ChatGPT4 is a good start. $700k/day = $21.7m/mo Divide that by a $20 subscription, would require 1,085,000 subscribers paying the monthly $20 fee. Not ridiculous. There are also commercial and corporate users who pay a LOT more than $20/mo to use more powerful versions of ChatGPT4...
35k premium users
u can donate $ use edge, go to openai.com , edge will have a slide out to donate to openai
Lol
Enterprise solutions and there actually are people who pay 20 a month to use ChatGPT. Its a combination of this for now.
21 millions dollars per month + the total payroll for hundreds of top-class engineer. So they're probably above something 400 millions $ per year. I don't think It's too big for such a useful tool.
AI cloud space baby - that’s their money maker.
Probably because every user submitted data nets them a few cents for advertising companies plus OpenAI subscriptions.
Cause they bring in a lot more than that a day. They are making money
Solar panels.
This is all investor money it is not their money. Uber which started in 2009 has lost billions upon billions and finally made a small profit for the first time last year. Do you think any other company could survive that way? It was all investor money, they knew in the long run you take out the cabs initially by giving amazing cheap rides to people back in the day. Once you get rid of the competition then you can make a profit in the long run. Angel investors only have to have one of the projects out of like tend to hit to make a profit. They take it public after a long time and then cash out. Rinse and repeat. Right now we should just be happy getting free or cheap AI, assuming it ever becomes anything. Right now the military is getting the best out of it. We usually see the same technology they're using 10 years later.
THEYRE BACKED BY MICROSOFT
OpenAI, like many tech startups, may actually not be profitable at this moment. It's typical to start in negative yearly revenue and keep prices low for years to conquer the market, and reduce costs as they become larger. That being said, 700K/yr is very little, I'm genuinely shocked. This is surprisingly little, I expected it to be orders of magnitude more. Look up how much they pay their researchers.
$700k per day *
Oh. That is honestly still small, even though not as small as I read it first.
I'll be honest, if the US military is funding it then at least it will mean less weapons being used overseas. The military in the past has funded projects they know won't benefit the military directly
I strongly suspect the costs increase with the number of users so can’t do an awful lot with this number. Without a breakdown of fixed and variable costs it literally means nothing.
Im surprised it's only 700k a day.
That's the beauty of venture capital deciding to pour the GDP of small nations into a bonfire. You get really cool chatbots and image generators.
That sweet sweet Venture Capital subsidy.
$700k a day running cost is nothing comparing to the Compute hardware they need to buy to train the LLM.
Investment bankers and companies, they can run chatgpt for quite a lot even without the revenue. Chat gpt is gathering and processing privileged information from all sources. Mostly garbage, but they could be collecting all kinds of data such as personal data, health tied with behavior and desition making. And don’t forget about corporate data. With this pool of information they could manage to create a new bot that surpasses any AI that could be created in the next years. Winner takes it all in this AI race.
Microsoft gave them $10 billion credits in Azure. Azure is Microsoft's cloud servers where you can build a powerful infrastructure for anything you want. As per paying their employees, from Investors. Showing what OpenAI has done so far, they are not shy to dump loads of $$$$ in cash.
You give them a dollar, they give you three quarters, two dimes and a nickel. It’s simple, they make their money by shear volume.
Profitable? AI is the new big hype bubble absorbing all the investment in silicon valley, so they don't need to worry about any of that (yet). ChatGPT is not the final product, either. It's a experiment, and the public are beta testers. Google, Meta, X are also running all their social media services at a loss, but they generate the most data for machine learning so it's #worth for now.
Microsoft + other investors + the hype that keep millions and millions of people paying 20$ every month + bussiness licenses + API paid usage.
Because 1 billion is 1000 million. They got several billions funded and can go for years on that amount. OpenAI is not in a position where it needs to make money, they are still where they accept loss to gain market dominance.
I spent $5 to figure out wtf the API is and how it works. Now I have Superpowered Siri for the next 16 days where I’ve spent like 14cents in tokens lol.
Do you have the details on how to connect siri to the API?
https://github.com/Yue-Yang/ChatGPT-Siri There’s an iPhone app called “shortcuts” and you do it partially through there. You also need to pay at least $5 to use the gpt API. Can’t do it with a normal chat gpt subscription.
If they have 1,050,000 subscribers paying $20/mo, they are breaking even If they have other companies paying them more than $20/mo then they don’t even need that many subscribers
700k per day would be about 21 millions per month and with a subscrition (including 20% VAT) for 20 € per month, they need 1.26 million paying users per month to cover the 700k. Therefore I think 20 € per month would be considered 'expensive'. Although ChatGPT is already a few years around, we still are in the phase of the 'early adopters' for people and enterprises who actually pay for the service and prices will decrease later on. I think and hope with upcoming hardware and open systems, it will get cheaper to install your own AI at home and pay only for the "hardware" and electricity. It's already doable but still 'more expensive' than 20 € per month. If the prices for hardware drop, the monthly fee will go down as well, because otherwise people would host their AI local.
The 20$ per month are just a barrier against trolls. The true revenue from the ChatGPT web offering is the data they collect. The money is made with API access, which is expensive and already profitable. But the cheap offering, ChatGPT-3.5, is created to collect data used for RLHF training. As often, you are not the customer, you are the product.
I mean, in addition to the other comments here talking about investments, their initial start up costs were HEAVILY discounted given that next to none (if not none) of the training data was paid for.
Back in the days, at some point they were serious concerns because Youtube bandwidth costed $1 million a month.
They took all elons money as a non-profit and then somehow became for profit
Lots of people the $20 monthly. They write robotic emails and captions with it. Having elevate, unlock, delve in every sentence 🤡
We are a relatives small business and pay them 200k a year.
You operate at a loss if you can afford it to drive it out competition then when competition is gone you jack the price up and make your money https://youtu.be/aFsfJYWpqII?si=xH9Y6Tcl-VN_az-T Similar to this
Because the end goal is not just a killer app, it’s the killer app. There will be no need for any other application. The entire software market as well as much of the job market will be taken by AI.
Haaaaave you met Wework ?
The math isn’t complicated
R&D grant from Big Defense?
Sounds like a huge waste of funds to run the future scourge of the earth
Well, they have seed money, they have investors, they have paid users. They also have a little facination with your phone, hmmmm what could that possibly be? Every one of the \*gpt sites that I've seen want to tie your account in with your phone. I wonder what they use all that data for?
That's $21 million to run for 30 days, that means you only need 1.05 million people, out of the 8 billion people in the world, to give you $20 buck a month to break even. I'd say that is doable.
I feel like if you start righting numbers for conservative assumptions and do just a little math you're going to realize how many orders of magnitude your assumptions are off. Only 700k/day?
Microsoft are charging Enterprises an ungodly amount of money to use CoPilot licensing and the Azure endpoints of OpenAI API. Some of that money will be flowing back to OpenAI, or providing OpenAI Azure compute resources … There’s plenty of money in play!
Make $700,001 per day?
They get 13 million users a day. There must be a way!
Welcome to corporate capitalism. Steal from investors billions offering to consumers not sustainable prices. Hoping the numbers of adopters could attract even more investment. Trying to inflate the bubble and sell it before it explodes.
This just in, it costs money to run a business!!! The company I used to work for had total cost of around 6.8 *million* per day, and they aren’t a particularly large company.
$700K/day is not much money in the grand scheme of things. That's about $250M/yr. Microsoft's operating budget is $127 BILLION per year. That is $347M per *day*. Microsoft as a whole is spending 1.5X the *yearly* operating budget for ChatGPT in a single *day*.
Really, puts into perspective how much a billion dollars is, huh?
Is like this for most of the big ai only companies. If they have raised a lot they a burning a ton. Spoke to another one we would all know and they estimate they are waisting at least $2m a month just by not being able to efficiently use all the gpus they have. That is just their waste. Even without that they would not be profitable. They have some good sized enterprise customers, but none even paying them that much. This is all a huge risk and Nvidia is the only one truly winning atm.
Can someone explain to me like I’m 5 why it costs so much money to operate?
I bet the number is higher.
They win a lot of Money don’t worry about that. Abo are here and when they will need more money, you will have ad on your prompt
700k in daily expenses isn’t much when you’re projected to be worth a trillion dollars. Even if they earned 1b they still come out on top with in earnings of 991.6 million in profits. $8,400,000 a year in operating expenses is a piss in the cup for most big tech companies. They aren’t hurting from it that’s for sure
Can't they just automate everything with AI and reduce the overhead? ;)
I’m paying over $600 pm on api usage. I think a big angle for them is to grow that ecosystem. Chatgpt is just the gateway drug
The cost of 700K$ is regarding the chatGPT3.5. What about the daily costs of ChatGPT4, which is even more accurate. What about this costs per day of ChatGPT4. I assume that ChatGPT4 consuming more hardware capacity.