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Alarm bells are ringing on OpenAI.
What was once a healthy lead over its competitors thanks to its blockbuster AI chatbot ChatGPTT has turned into a razor-thin lead, prompting OpenAI CEO Sam Altman. Declare a “Code Red”,
The financial stakes are almost ridiculous in their size: the company is burning through billions of dollars, with no end in sight; It has committed to spending more than $1 trillion together over the next several years lose a staggering amount Every quarter.
And with revenues lagging far behind, most ChatGPT users are balking at the idea of paying for a subscription.
Meanwhile, Google has made big strides and is on pace to catch up with OpenAI’s claim of 800 million or more weekly active ChatGPT users as of September. What’s worse, Google is in a far better position to turn generative AI into a viable business — all while investing a comfortable $30 billion. Benefit each quarter, as Washington Post tells,
The question on many investors’ minds is: If the AI bubble collapses, will OpenAI survive?
“We’re going to see a situation where ChatGPT was the early winner,” said Ross Hendricks, equity analyst at Porter & Company. WaPo“They’re going to end up just like MySpace did with their inability to really monetize and separate from the pack,”
In a note Thursday, Deutsche Bank analyst Jim Reed estimated that OpenAI would lose a staggering $140 billion between 2024 and 2029.
“OpenAI can continue to attract significant funding and eventually develop products that will generate substantial profits and revolutionize the world,” they wrote. WaPo“But currently, no start-up in history has operated on this scale with expected losses,”
“We’re firmly in uncharted territory,” Reed said.
Even to cover the interest on all the money OpenAI is borrowing, the company’s revenues will have to increase significantly. But according to a recent review of Sensor Tower data WaPoChatGPT’s monthly active users increased by just five percent between July and November. Google’s Gemini AI app grew by more than 30 percent during the same period.
Recent data also shows that ChatGPT user growth in Europe is stalling, highlighting a slowdown that couldn’t come at a worse time for OpenAI.
Google’s latest Gemini 3, in particular, impressed when it was announced for release last month, with benchmarks exceeding OpenAI’s most powerful AI models. Its Nano Banana Pro AI Image Model pushed the envelope tooWhile OpenAI’s Sora video-generating app has received comparatively less media attention following a storm of controversies surrounding its launch.
It’s not just Google. OpenAI also faces stiff competition from open-source AI models in China, such as startup DeepSeq, whose ultra-energy-efficient R1 model sent Silicon Valley into chaos earlier this year.
In short, by many indications, OpenAI appears to be in deep water, and analysts are becoming concerned about the company spending large amounts of money at an unprecedented pace.
Even the so-called “Godfather of AI” and former Google AI chief, Geoffrey Hinton, is not optimistic about the future of OpenAI.
“I think it’s actually even more surprising that it took so long for Google to get ahead of OpenAI,” he said. told business insider This week.
“I think they’re just starting to move past it,” he said. “Google has very good researchers and obviously a lot of data and a lot of data centers.”
“My prediction is that Google will win,” Hinton concluded.
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