The University of Rhode Island’s AI lab estimates that GPT-5 averages just over 18 Wh per query, so putting all of ChatGPT’s reported 2.5 billion requests a day through the model could see energy usage as high as 45 GWh.
A daily energy use of 45 GWh is enormous. A typical modern nuclear power plant produces between 1 and 1.6 GW of electricity per reactor per hour, so data centers running OpenAI’s GPT-5 at 18 Wh per query could require the power equivalent of two to three nuclear power reactors, an amount that could be enough to power a small country.
Their point is that those API prices might not match reality, and the prices may be artificially low to build hype and undercut competitors. We don’t know how much it costs OpenAI, however we do know that they’re not making a profit.
Or it might not. It would be a huge short term risk to do so.
As FaceDeer said, that we truly don’t know.
OpenAI are not profitable today, and don’t estimate they’ll be profitable until 2029, so it’s almost guaranteed that they’re selling their services at a loss. Of course, that’s impossible to verify - since they’re a private company, they don’t have to release financial statements.
There’s a difference between selling at a loss, and having a loss.
OpenAI let’s people use models for free with very little limits other than reducing the model quality over time, and they have very generous limits before they limit you at that.
That all costs money and is a loss for them.
If they get someone who’s willing to pay, and they charge $20/m and on average, they net $5 profit per customer, they aren’t selling it at a loss, they just need more customers. It’s possible that a paid customer uses it even more though and it actually does incur a loss per paid customer and they’re doing that to try and gain users while they figure out how to lower their costs, but that seems less likely.
That’s not what I’m saying. They’ve all but outright said they’re unprofitable.
But revenue is increasing. Now, if it stops increasing like they’ve “leveled out”, that is a problem.
Hence it’s a stretch to assume they would decrease costs for a more expensive model since that would basically pop their bubble well before 2029.
Revenue is increasing, but according to their own estimates, it has to increase 10x in order for them to become profitable.
Sure, they might not. But he gives no basis for saying that other than what he “believes.”
People in this community, and on the Fediverse in general, seem to be strongly anti-AI and would like to believe things that make it sound bad and unprofitable. So when an article like this comes along and says exactly what you want to believe it’s easy to just nod and go “knew it!” Rather than investigating the reasons for those beliefs and risking finding out something you didn’t want to know.
It is unprofitable, though.
OpenAI recently hit $10 billion in ARR and are likely to hit $12.7b by the end of the year, but they’re still losing a lot of money. They don’t think they’ll make a profit until 2029, and only if they hit their target of $125 billion revenue. That’s a huge amount of growth - 10x in 4 years - so I’m interested as to if they’ll actually hit it.
Okay, make it sound worse and even more unprofitable.
Making their AI models cheaper to run (such as by requiring less electricity) is one step along that path to profitability.