Is ChatGPT screwed?
How cool would it be if I had to write an entire article using ChatGPT?
Last year that might have been cool but now that would just be normal. Normal is exactly the term that follows ChatGPT, OpenAI’s latest weapon in the AI war. So normal, that it features in everyday conversation around the water cooler, news, and even on the local radio.
Everyone knows about ChatGPT
So what is ChatGPT?
I won't even bother explaining it, if you don't know what it is, then climb out from that rock you have been hidden under.
My favorite explanation of ChatGPT is by ChatGPT when you ask it to explain ChatGPT to a 10-year-old…
“ChatGPT is like a super smart robot who can talk to you and answer your questions. It uses a lot of information from books and the internet to come up with answers. Think of it as a magic genie who can help you find information and answer your questions!”
What is the big deal?
If you are a lazy student then this is a game changer. If you are a lazy lawyer then this is a game changer. if you are a lazy programmer then it's a game changer, there are even stories of ChatGPT passing entrance exams to big tech companies.
Impact on education
There have been reports of ChatGPT passing exams from law and business schools, although not scoring high marks it was able to pass the exams
With distance learning and online education the implications are endless, how will markers be able to determine which answers are human-generated and which are AI-generated?
Impact on content creation
I run an e-commerce store and central to what I do is SEO, we need to make sure the website is discoverable when customers search
Part of optimizing SEO involves writing articles
If you just search on Fiverr you will find tons of ‘experts’ who can write articles to improve your SEO
Then I thought what if I could use ChatGPT to write SEO articles for my website… Then I thought what if I can use Dall-e to generate the images for the articles
That's exactly what I did
Article 1 — https://thegrateapp.com/2023/02/04/to-router-or-not-to-router/
Article 2 — https://thegrateapp.com/2023/02/04/airfry-it-up/
Images for the articles using Dall-e
This is a game changer from a productivity perspective, now i don't have to spend hours and hours writing articles but can do it all in 5minutes
Then I thought of all those fiverr content creators, will their jobs be under treat….
Monetization of ChatGPT
It might cost around $ 3 million per month for OpenAI to run ChatGPT, not as bad as Twitter's $ 4 million daily burn rate but still significant
With all those dollars being spent, it would only make sense for ChatGPT to monetize.
I then thought, is it not too soon to monetize?
I thought back to Facebook and how they operated for a fair bit of time before having any idea on how it would monetize
I thought back to Google and how they monetized its API’s, they don't charge from the first call you make to the API but rather based on volume. They charge its super users and leave us mini-users with the same quality of service
But ChatGPT is different to a certain extent…
Simply put, OpenAI did not have the luxury of waiting. They blitz-scaled with no marketing and face a wave of new users daily
As per the current rate, Microsoft charges $3 an hour for a single A100 GPU and each word generated on ChatGPT costs $0.0003. [1] With a typical response consisting of anything between 15–150 words, you can see how the costs add up.
Microsofts grip on ChatGPT
In 2019, Microsoft invested $1 billion into the buzzy artificial intelligence research outfit OpenAI, cofounded by Y Combinator alum Sam Altman, Elon Musk, and a group of others just over seven years ago. Financial details of the deal weren’t disclosed at the time, but MIT Tech Review reported in 2020 that the $1 billion was split between cash and credits for Azure, Microsoft’s cloud business. [2]
The thing is ChatGPT needs GPU’s and Microsoft has GPU’s and with ChatGPT burning through GPU’s the initially offered credits are probably depleted, especially considering that ChatGPT has seen astronomical growth.
There are estimates of between $250 million and $1 billion annual run rate of expenses at OpenAI, “much of which is likely being spent on Azure.”
Part of the deal includes Microsoft Azure being used as the exclusive cloud provider for the tool since OpenAI uses Azure to train all of its models. [3]
ChatGPT is practically married to Microsoft, there are also talks of a further investment with the tech giant looking to invest an additional $10 billion into the startup for 49% equity and 75% of all OpenAI profits
Exclusivity
Having the backing of a tech giant such as Microsoft seems appealing but has its drawbacks. Microsoft Azure competes with AWS and Google Cloud and if either of those offers a better rate Open AI would not be able to jump on the opportunity due to the exclusivity agreement.
75% of profits
OpenAI has projected to hit $ 1 Bill in revenue in 2023, a large majority of revenue will go towards covering operating expenses and what is their largest operating expense — Azure, then 75% of any profit they generate would go to Microsoft too.
OpenAI basically belongs to Microsoft…
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