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The Street
The Street
Ian Krietzberg

Despite drama, ChatGPT maker OpenAI is growing revenue at a rapid pace

ChatGPT maker OpenAI recently exceeded $1.6 billion in annualized revenue, two people familiar with the number told The Information

The total indicates monthly revenue of $133 million. 

The number represents a 20% increase from the $1.3 billion in annualized revenue The Information reported as of mid-October. In August OpenAI was on track to generate $1 billion in annualized revenue. 

OpenAI took in a total of $28 million in revenue in 2022. 

Related: New York Times slaps Microsoft, ChatGPT maker with copyright lawsuit

The revenue boost was led by sustained growth from OpenAI's popular ChatGPT product, which as of November boasted a weekly user base of around 100 million people, according to Chief Executive Sam Altman. 

The company additionally offers a subscription service called ChatGPT Plus, which offers users a more powerful version of the chatbot for $20 per month. 

Tumultuous November at ChatGPT

The continued growth for ChatGPT came in the wake of a tumultuous November for OpenAI, marked by the sudden removal — and then reinstatement — of Altman, the company's co-founder and CEO. 

Though it started as a nonprofit research lab in 2015, OpenAI was reorganized into a hybridized "capped profit" model in 2019, where the business is controlled by a small nonprofit board. 

The San Francisco company was structured such that the nonprofit board was required to serve the company's mission of safely developing artificial general intelligence, rather than its shareholders.

The board, saying that Altman had not been "consistently candid" in his communications with them, ousted him Nov. 17. Part of Altman's reinstatement involved the installation of a new set of directors, including representation from investor Microsoft (MSFT) -)

Microsoft has invested around $13 billion into OpenAI. 

The revenue numbers suggest that OpenAI's enterprise clients, which as of August included cosmetics giant Estée Lauder (EL) -), graphic-design platform Canva, and consultants PwC, were not scared off by the November drama

The Information reported that some members of management at OpenAI believe that number could rise beyond $5 billion by the end of 2024. 

Bloomberg reported in December that OpenAI was raising new funding at a $100 billion valuation. 

Related: Human creativity persists in the era of generative AI

Generative AI and questions of copyright 

Even as its business prospects continue to strengthen, OpenAI has become embroiled in several copyright-infringement lawsuits. 

The New York Times last week sued both OpenAI and Microsoft, alleging rampant copyright infringement in both the training of ChatGPT and the output produced by the model. 

The Times' complaint requests the destruction of all models trained on Times content, which could serve as a harsh blow to the generative AI industry. 

It's not just text either. AI researcher and expert Gary Marcus, citing numerous examples of copyright-infringing output, said Dec. 29 that generative AI systems like ChatGPT have been trained on copyrighted content, and that the companies behind these models have not been transparent about what their models are trained on.

CEO Sam Altman has often warned of the dangers of more powerful AI systems. 

Bloomberg/Getty Images

David Holz, the creator of Midjourney, an image-rendering AI platform, said in September that the company never sought consent from artists to use copyrighted work in training its models. 

He said that there "isn't really a way" to access a hundred million images and "know where they're coming from." 

"If OpenAI does collapse, WeWork style, it will likely be seen as a tale of hubris," Marcus said. "They knew infringement was going to be a major issue. They proceeded anyway. That will not play well in front of juries. In the end it could devour them."

Contact Ian with AI stories via email, ian.krietzberg@thearenagroup.net, or Signal 732-804-1223.

Related: Users of Midjourney text-to-image site claim issues with new update

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