Have you ever wondered how much GPT engineers at OpenAI make? Well, the answer is $925,000, and that’s just the median salary. Even the average Joe at OpenAI is paid $300,000 in cash and $625,000 in stock every year. It’s clear that working at OpenAI is a lucrative opportunity.
But is it worth it for OpenAI? The cost of running a company like OpenAI is astronomical. Just employing a thousand engineers would result in an annual payroll of a billion dollars. And if they were to scale up to the size of Google, with nearly 200,000 employees, the payroll would reach nearly 200 billion dollars.
And that’s only half the puzzle. Developing a language model like ChatGPT requires not only the smartest human brains but also the most advanced computer systems. Each of these systems can cost between $10,000 to $15,000, and OpenAI would need thousands of them. Additionally, they would require servers, databases, and infrastructure to support their massive operation.
To make matters worse, OpenAI has been facing significant losses. They lost approximately $540 million last year, and with the expansion of GPT, their losses are expected to be even higher this year. It’s clear that OpenAI’s ambitious goals come with a hefty price tag.
So, how does OpenAI plan to afford all of this? One way is through monetization strategies like Pro subscriptions. They currently offer a Pro Plan that costs $20 per month, providing better availability, faster responses, and early access to new features. While this may not be appealing to casual users now, as the disparity between the free plan and the Pro Plan grows, it could become more enticing.
Another revenue stream for OpenAI is selling API access to ChatGPT. Companies can make requests to ChatGPT using code, integrating it into their apps or websites. The pricing for these requests is based on tokens, with each 1,000 tokens costing three cents for input and six cents for output. For large-scale integration, the costs can quickly add up, making it an expensive endeavor.
While OpenAI has a viable business model, the challenge lies in acquiring and maintaining customers. Big tech companies like Google and Apple are potential partners, but they come with their own demands and costs. Google, for example, pays Apple billions of dollars each year to integrate its services into Siri and Safari. OpenAI would need similar partnerships to scale its business.
However, competition in the AI space is fierce. Companies like Google and Meta are developing their own language models, making it challenging for OpenAI to secure partnerships. While there are still companies that could benefit from ChatGPT, such as Apple, convincing them to invest billions of dollars is no easy task.
Furthermore, OpenAI’s reliance on external funding is evident. The CEO of OpenAI, Sam Altman, has suggested that they will need $100 billion in the coming years. This level of investment is beyond what traditional startups require, and it highlights the magnitude of OpenAI’s ambitions.
In conclusion, OpenAI’s vision of creating advanced language models like ChatGPT comes at a significant cost. The company needs substantial investments, partnerships with big tech companies, and a sustainable revenue model to survive. While the potential rewards are immense, the challenges ahead are equally daunting.
