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Expect to see a ChatGPT bankruptcy in 2024

OpenAI's ChatGPT emerged as a phenomenon, capturing both admiration and apprehension. Its meteoric rise since its November 2022 launch transformed it into the fastest-growing app in history.

However, this intriguing ascent was accompanied by growing concerns, as it sparked debates about the prospect of replacing human jobs with AI-driven automation.

Now, amidst the ongoing discussions, a startling report by Analytics India Magazine suggests that we might see a ChatGPT bankruptcy by the end of 2024.

ChatGPT bankruptcy
ChatGPT achieved unprecedented growth as the fastest-growing app after its November 2022 launch

Why has ChatGPT bankruptcy speculation emerged?

At the heart of this unfolding drama lies OpenAI's trademark application for GPT, which set off alarm bells. Many experts perceived this move as a potential harbinger of the company's downfall. Speculations emerged that the application could lead to diminishing user interest and eventual abandonment of the technology.

Analytics India Magazine's report draws attention to an alarming decline in ChatGPT's user base. Data from SimilarWeb revealed that ChatGPT's website witnessed diminishing user activity, especially during June and July, as compared to May.

August brought more bad news, as SimilarWeb reported a second consecutive month of diminishing ChatGPT traffic. July witnessed a significant 12 percent drop in users, dwindling to 1.5 billion users from June's 1.7 billion users.

API cannibalization and competition

A potential explanation for this decline is API cannibalization, where companies restrict employee usage but allow integration into other workflows.

However, another significant factor could be the rise of Mark Zuckerberg's Meta and its Llama 2 chatbot. Llama 2's open-source nature, facilitated through a partnership with Microsoft, has presented a formidable competitor, casting a shadow over ChatGPT's future.

Media outlets have reported OpenAI's staggering daily expenditure of around $700,000 to operate ChatGPT. Recent investors, including Microsoft, are reportedly shouldering these costs, raising concerns about the sustainability of such funding.

Despite projecting an annual revenue of $200 million for 2023 and aiming for $1 billion in 2024, OpenAI's financial losses have doubled to $540 million since the AI chatbot's development began.

ChatGPT bankruptcy
Global GPU shortage might be the biggest factor that leads to the ChatGPT bankruptcy

GPU shortage and future prospects

The persistent global Graphics Processing Unit (GPU) shortage has impeded OpenAI's capacity to innovate and enhance its models, exacerbating its challenges.

A recent trademark application for GPT-5 further underscores OpenAI's determination to persevere in model development, even as circumstances grow more complicated.

Considering these intricate factors, the possibility of ChatGPT bankruptcy by the end of 2024 seems increasingly plausible, unless substantial funding is secured. The company faces a crossroads, with the viability of AI models like ChatGPT hanging in the balance.

The convergence of financial woes, market competition, and technical limitations paints a picture of uncertainty for OpenAI's future, ultimately leading to an expectation of ChatGPT bankruptcy.

Thank you for being a Ghacks reader. The post Expect to see a ChatGPT bankruptcy in 2024 appeared first on gHacks Technology News.

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