OpenAI

Performance indicators

2022: Double loss growth to $540 million

On May 4, 2023, it became known that the American company OpenAI, the developer of the advanced chat bot ChatGPT based on artificial intelligence, suffered losses of $540 million in 2022. This is approximately twice as many losses recorded a year earlier.

According to The Information, referring to data obtained from three persons aware of the financial situation of OpenAI, the bulk of the losses are associated precisely with the creation of ChatGPT. The cost of developing and operating a chatbot comes down primarily to its need for enormous computing power, which plays a key role in generating responses to user requests.

According to Dylan Patel, chief analyst at consulting firm SemiAnalysis, maintaining ChatGPT can cost OpenAI about $700 thousand per day. At the same time, John Hennessy, chairman of Alphabet, previously said that searching in his own Google Bard chatbot costs 10 times more than a regular search. In other words, the operation of large-scale AI models requires huge financial investments.

OpenAI CEO Sam Altman believes the company will need about $100 billion more to further develop AI technologies. The fact is that OpenAI is working on the so-called artificial intelligence of the general level - Artificial General Intelligence (AGI). Such a system will be able to perform any task, completely mimicking the activities of the human brain. As a result, according to Altman, OpenAI could become the most "capital-intensive startup in the history of Silicon Valley." On the one hand, Microsoft support can help improve the financial situation of OpenAI. However, on the other hand, OpenAI will face additional costs amid the growing popularity of its AI products.^[1]

History

2024

Elon Musk filed a lawsuit against the company for its renunciation of its status as a non-profit organization

Elon Musk at the end of February 2024 filed a lawsuit against Open AI and Sam Altman and Greg Brockman for violating the agreement concluded since the founding of Open AI to maintain the status of a non-profit company.

The businessman also believes that the company violated the condition of commitment to the development of AI for the benefit of humanity, and not for profit.

"OpenAI, Inc. has been turned into a closed-source subsidiary of the de facto largest tech company in the world: Microsoft. Under the leadership of the new board of directors, the company is not just developing, but actually improving artificial intelligence in order to maximize Microsoft's profits, and not for the benefit of humanity. "

OpenAI co-founder Andrei Karpaty left the company

On February 13, 2024, a Canadian scientist of Slovak origin Andrei Karpaty, one of the co-founders of OpenAI, announced his departure from this company. He intends to focus efforts on his own projects. Read more here.

2023

Altman returns to the post of CEO

On November 22, 2023, it was announced that OpenAI would return Sam Altman to his post and overhaul the board to include new directors, including Larry Summers, in a stunning twist in the drama that has rocked Silicon Valley and the global AI industry.

Altman is returning as CEO, with Bret Taylor, former co-chairman of the Salesforce.com board and director of Twitter prior to its acquisition by Elon Musk, as chairman of its original lineup. Other directors include Summers, a former U.S. Treasury secretary under President Barack Obama, and already-serving board member Adam D'Angelo, co-founder and CEO of Quora. OpenAI is working "to find out the details."

Hundreds of OpenAI employees leave after fired CEO Sam Altman

On November 20, 2023, hundreds of OpenAI employees signed an open letter announcing their decision to leave the company if the board did not announce their resignation, and CEO Sam Altman and President Greg Brockman would not be reinstated. Meanwhile, other participants in the AI market are literally lining up for OpenAI specialists.

Altman's dismissal from OpenAI turned into a loud scandal. Following him, three senior researchers of the company announced their resignation - Jakub Pachocki, Alexander Madry and Szymon Sidor. Then more than 700 employees of the company, which as of November 2023 has approximately 770 employees, announced their intention to leave OpenAI. If this happens, OpenAI's activities will actually be paralyzed.

Hundreds of OpenAI employees sign open letter threatening to quit company

After being fired from OpenAI, Altman and Brockman will head Microsoft's new AI division. Other OpenAI employees can move to rival companies. In particular, the American developer of CRM systems Salesforce reportedly said that it would hire any OpenAI researcher who leaves this startup amid Altman's dismissal. Offers of employment to OpenAI employees were made by the Canadian artificial intelligence platform Cohere and the Adept research laboratory specializing in machine learning technologies.

Analytics firm GlobalData reports that large enterprises in various business sectors are hiring engineers with experience with the GPT-4, the OpenAI AI model. Companies looking for GPT-4 experts include Citigroup, Merck, Microsoft, Thomson Reuters and Travelers Companies. Some OpenAI specialists can go to the AI division of Google DeepMind.^[2]

Emmet Shire appointed CEO of the company, because scientists are concerned that the expansion of the company is out of control and this is dangerous

The OpenAI Board of Directors in November 2023 appointed Emmett Shear, formerly of Twitch, as CEO. The move runs counter to calls from investors to reinstate the fired Sam Altman.

What led to Altman's shock exit? Insiders claim it started with a group of scientists worried that the company's expansion was out of control - perhaps even dangerous.

The company has failed to balance nonprofit goals with high-value businesses and billion-dollar commercial ties.

Microsoft said Sam Altman will lead a new team of artificial intelligence software developers after the OpenAI co-founder was ousted from his post.

Greg Brockman, a board member and co-founder of OpenAI who also left the company, will join Altman at Microsoft and Microsoft will "act quickly to provide them with the resources they need to succeed," the company's CEO Satya Nadella said.

Poaching Google AI specialists with a promise of $10 million a year

In early November 2023, it became known that OpenAI, the developer of the ChatGPT chatbot, is poaching Google's best artificial intelligence specialists, promising them millions of dollars in rewards packages. Qualified personnel are needed by OpenAI to accelerate the development of large language models and further strengthen its position in the rapidly growing AI market.

It is said that OpenAI offers Google AI specialists compensation packages in the amount of $5 million to $10 million. It is noted that earlier OpenAI hired at least 93 people who had previously worked for Google and Meta (recognized as an extremist organization; activities on the territory of the Russian Federation are prohibited). In particular, according to LeadGenius and Punks & Pinstripes, as of February 2023, OpenAI employed about 59 former Google employees and approximately 34 former Meta specialists. Moreover, the list of thanks for the launch of ChatGPT in November 2022 lists five former Google employees.

Co-founder and Chief Scientist (Chief Scientist) of OpenAI Ilya Sutskever (left) and CTO Greg Brockman

The list of vacancies for the position of research engineer in the OpenAI team as of November 2023 indicates the range of annual wages from $245 thousand to $450 thousand. In addition, applicants are promised "generous equity" and other benefits. The company needs specialists who "strive to make AI safer, able to think critically, understand machine learning and are able to program."

In April 2023, OpenAI was valued at about $29 billion amid fundraising from investors including Microsoft and Thrive Capital. The company intends to organize the sale of existing shares of employees in order to reach an estimated value of $86 billion. This, analysts predict, will bring significant profits to Microsoft.^[3]

Raising $300 million for development

At the end of April 2023, it became known that OpenAI, the developer of the advanced chat bot ChatGPT based on artificial intelligence, raised $300 million for development.

According to reports, the TechCrunch funds were provided by several venture capital companies, including,, Tiger Global, Sequoia Capital Andreessen Horowitz Thrive and K2 Global. In addition, the Founders Fund was among the investors. Thus, the market value of OpenAI is estimated at $27- $29 billion - excluding the $10 billion that was previously received from the corporation. Microsoft It is noted that the new investment round, apparently, closes the tender offer, which was being prepared in January 2023. OpenAI itself refuses to comment.

OpenAI raised $300 million for development

OpenAI has formed several technical teams working in various fields related to AI technologies. However, the direction of GPT (short for Generative Pre-trained Transformer) - a family of large language models, access to which is provided to third parties through the program interface (API), attracted the most attention. It was on the basis of GPT that the ChatGPT bot was built, which debuted at the end of November 2022. It is estimated that in February 2023 alone, the ChatGPT website was visited by more than 1 billion users - this is not counting those who use the platform through third-party systems.

In addition to ChatGPT, OpenAI has its own artificial intelligence imaging tool called Dall-E, as well as the Whisper AI speech recognition model. In general, as noted, OpenAI has significant weight among competitors, including due to the fact that it has focused on AI technologies since its inception in 2015. For investors, the company looks like a developer of promising products in the rapidly developing artificial intelligence market.^[4]

Buying a AI.com domain for $11 million

OpenAI, a developer chat boat based on, artificial intelligence ChatGPT bought domain AI.com. This was reported on February 20, 2023 in. According "Coordination Center for Domains.RU/.РФ" to the center's specialists, the deal has excellent chances to become, if not the largest, then one of the largest in the domain market in 2023.

OpenAI bought the AI.com domain for $11 million
Photo: compote.slate.com

The broker of the transaction was Saw.com, and the seller was Future Media Architects, which owned the domain name for many years. None of the parties to the transaction disclosed its amount, but Insane, referring to the head of the Saw.com, Jeffrey Gabriel, reports that the domain name was acquired for $11 million.^[5]

AI.com was registered in May 1993. AI is an abbreviation for Artificial intelligence artificial intelligence("").

Now, to launch the ChatGPT chatbot, you do not need to go to the OpenAI site - just enter a AI.com in the address bar of the browser, and the user will automatically be redirected to the ChatGPT chatbot site chat.openai.com.^[6]

Raising $10 billion from Microsoft

On January 23, 2023, Microsoft announced a multi-year agreement with OpenAI, the developer of the ChatGPT AI chatbot. We are talking about the third stage of a long-term partnership, during which Microsoft will provide OpenAI with multi-billion dollar support for the development of innovative technologies.

The first two rounds of investment were announced in 2019 and 2021. The current phase is aimed at cooperation in the field of supercomputation and AI solutions. Microsoft does not disclose the estimated amount of investments, but Bloomberg's resource says $10 billion.

Microsoft invests $10 billion in ChatGPT neural network developer

We formed our partnership with OpenAI on the basis of a common desire to promote advanced AI tools and democratize the relevant infrastructure as a new technology platform. At the next stage of our partnership, developers and organizations from different industries will have access to the best AI infrastructure, models and toolkit for Azure in order to create and launch their applications, "said Satya Nadella, Chairman and CEO of Microsoft.

It is said that Microsoft will increase investment in the development and deployment of specialized supercomputing systems in order to accelerate independent research in the field of AI as part of OpenAI projects. In addition, the expansion of the cloud infrastructure will continue Azure to support AI solutions. Microsoft will introduce OpenAI models into its consumer and enterprise products. This includes the Microsoft Azure OpenAI service, which allows you to expand the potential of applications by using large-scale AI models. In addition, Azure will support all OpenAI workloads for research, products and services. In general, the deal will kickstart the development of the Azure cloud, as well as provide OpenAI with additional specially designed supercomputers to run complex AI models.^[7]

2020

Creation of an AI service that allows you to talk to famous people, even the dead

In early July 2020, an AI service was presented that allows you to talk to famous people, even the dead. A project called AIWriter is a new experiment by magician and writer Andrew Mayne. The solution uses the OpenAI text generator API to create a simulation of conversations with virtual historical figures. Read more here.

Start of sales of previously named dangerous technology

Technology based on artificial intelligence was developed at OpenAI, co-founded by Elon Musk. Access to the closed beta version was provided by several companies, including Reddit^[8].

In fact, this tool is a text editor that takes words and sentences from users as a basis. Earlier, journalists have already learned that the service is capable of imitating the style of George Orwell's novel 1984.

The technology was first recognized as dangerous and considered that it would be used for other purposes. Last year, the developers said they would not make the tool available, but have now decided to give some companies access to it. The creators promised to stop accessing the service if it is used for harassment, sending spam and radicalization.

2019

Raising $1 billion in investments from Microsoft

July 23, 2019 it became known that Microsoft will invest $1 billion in the non-profit organization OpenAI, based in San Francisco. The parties have entered into a multi-year partnership to develop supercomputer technologies based on artificial intelligence for the Microsoft Azure cloud service.

The joint developments of Microsoft and OpenAI will be located in Microsoft Azure. Many, but not all services already created by OpenAI will also be moved there. In addition, Microsoft will be the company's "preferred" partner in commercializing new services.

"OpenAI is working on a number of increasingly powerful technologies in artificial intelligence, and this is costly. The most obvious option to make money is to create a product, but then the company's focus will shift to the side, " noted Greg Brockman, co-founder and CTO of OpenAI

OpenAI announced that it intends to spend Microsoft's money on research in the field of "strong" artificial general intelligence (AGI), that is, such an AI that is capable of performing all the same tasks as the human brain, up to the development of full thinking and self-awareness. It is opposed to "weak," that is, applied AI.

OpenAI believes that "strong" artificial intelligence can become a source of widespread economic benefits, provided it is safely deployed. As of 2017, according to CNews, about 40 organizations in the world were actively researching "strong" artificial intelligence.

OpenAI CEO Sam Altman believes that "strong" artificial intelligence will be able to master more disciplines than any person and discover such interdisciplinary connections that elude human scientists. This could help address the challenges of climate change, health care and education.

Create a commercial structure to attract external investment

In March 2019, OpenAI created a companion commercial structure to attract external investment. However, this structure is ultimately subordinate to the non-profit board of directors, and investor returns are limited.

2017

At the end of 2017, OpenAI spent about $7.9 million on cloud computing research. This is about a quarter of all functional expenses of the organization for 2017.

2015

OpenAI was founded in 2015. The organization received $1 billion from Altman, who is president of Y Combinator, PayPal creator Peter Thiel, LinkedIn co-founder Reid Hoffman and other investors.

Among the investors is Elon Musk, who was a member of the organization's board of directors, but left it in February 2018. He motivated this with a possible conflict of interest with Tesla, which is also engaged in the development of artificial intelligence. At the same time, Musk promised to continue to advise and finance OpenAI.

OpenAI deals with projects related to robotization and artificial intelligence. For example, the company's specialists are trying to teach the robotic arm to perform actions with the same dexterity as the human arm using software alone. This should reduce the cost of money and time spent training robots.

The group is also engaged in research in the field of security of the use of artificial intelligence and its consequences for society. For example, OpenAI examines how a computer can generate realistic news, and how similar algorithms can be used by attackers.

In addition, OpenAI developments include an intelligent system that can compete with professional esports players when passing the Dota 2 game.

Notes