Capital Economy, Business and Finance
For a company founded as a non-profit, OpenAI is doing pretty well. Its December 2023 sales generated revenues equivalent to $2 billion on an annualised basis, and it expects to double that in 2025. That doesn't mean it earned $2 billion last year – two months earlier, in October, its annualised run rate was a mere $1.3 billion. Nor is it in profit yet. Its founder, Sam Altman, told the FT in November the huge costs of building large language models still outweigh income. But it does mean that even though private individuals can do ad hoc ChatGPT queries for free, the company has a solid business model. So far it's largely B2B; businesses buying the right to adapt ChatGPT for their own purposes. But if competing products from Google and others are any guide ($20 a month for Google's Gemini), premium retail subscriptions will soon add significantly to that. The software engineers who arm-wrestled Altman back to OpenAI from Microsoft last year are sharing in the bounty. Word is more than 100 of them got as much as $20 million each from a secondary share sale dependent on his return. Others aren't so lucky. One US outplacement firm says AI is to blame for 4,600 redundancies since last May.