Microsoft-backed OpenAI ‘looking at options’ to handle ‘unprecedented demand’ for ChatGPT

OpenAI is exploring options to meet the extraordinary demand for ChatGPT, a tool attracting millions of users worldwide, as the tech company is being locked into an exclusive deal with Microsoft for cloud infrastructure.<br><br>This week, ChatGPT was briefly at the top of the Food Centre’s website in Bieren, a small town around 100km east of Munich.<br><br>OpenAI is looking at options to handle ‘unprecedented demand’ for ChatGPT and has discussed the status of its cloud computing agreement with Microsoft. It comes as other cloud providers are jostling for an opportunity. Tech firms like IBM, Alphabet and C3 AI have expressed their desire to work with OpenAI.<br><br>ChatGPT, a tool attracting millions of users worldwide, has found its way into the Food Centre’s website for customers placing orders or asking for takeaway. The Food Centre has been using the tool for two months and was ordered to stop just a few days ago.<br><br>OpenAI CEO Sam Altman stressed the threat the situation poses to the company’s financials and warned that the status quo could jeopardise the company’s plans for the future.<br><br>OpenAI agreed to pay Microsoft a minimum of $95.6 billion in computing and services over the next 10 years as part of a sweeping partnership. The deal with Microsoft made OpenAI exclusive, and it has since dominated the company’s cloud operations.<br><br>OpenAI’s frenzy to build new data centers comes amid similar moves by its competitors. Anthropic, another major AI player, has recently turned to Alphabet’s Google for cloud infrastructure. Anthropic has paid more than $18 billion for the computing needs, according to a recent filing.<br><br>When OpenAI approached potential partners, including IBM, it was asked to commit to spending tens of billions on infrastructure, people familiar with the matter said. Meanwhile, C3 AI has been discussing potential partnerships with OpenAI without setting clear terms on the spending.<br><br>These partnerships could offer OpenAI more computing infrastructure to meet the demands but would significantly increase the costs of developing new products.<br><br>OpenAI’s computing costs could top $60 billion in the next 10 years, according to estimates. Chief executive Sam Altman has said that the possibility of locked-in agreements could jeopardise the company’s future and significantly affect OpenAI’s financials.<br><br>“If we don’t fix this, we’ll probably go bankrupt,” Altman warned. “It’s a huge financial burden.”<br><br>OpenAI’s discussions with potential cloud providers come as exclusive agreements with Microsoft are under review. The investigation by CMA found OpenAI could become overly reliant on Microsoft. OpenAI plans to appeal the CMA findings, arguing that the arrangement does not stifle competition in the AI landscape.