This was really interesting to forecast! Here’s my prediction, and my thought process is below. I decomposed this into several questions:
Will OpenAI commercialize the API?
94% – this was the intention behind releasing the API, although the potential backlash adds some uncertainty [1]
When will OpenAI commercialize the API? (~August/September)
They released the API in June and indicated a 2 month beta, so it would begin generating revenue in August/September [2]
Will the API reach $100M revenue? (90%)
Eliezer is willing to bet there’ll be 1B in revenue from GPT-like services in 2025. This broader than just the revenue from the OpenAI API, but is also a lot more than 100M
A tiny list of industries OpenAI API will affect, to give reference points:
It seems absurd to me that OpenAI wouldn’t generate 100M from the API *at some point*, but I’ve adjusted down because it’s easy to be overconfident about exciting tech like this
If it does reach $100M, when will it?
This article suggests that SaaS companies started in the last 15 years took 8 years to reach $100M ARR
The question asks about total revenue not ARR, so this timescale would be a lot shorter
What do you think? Are you more bullish on it generating 100M sooner? (My median was April 17, 2022 – this seems like it could be a bit late, but ultimately I’m not that certain in the 2021 – 2024 range). Here’s a blank distribution if you want to make your own!
This was really interesting to forecast! Here’s my prediction, and my thought process is below. I decomposed this into several questions:
Will OpenAI commercialize the API?
94% – this was the intention behind releasing the API, although the potential backlash adds some uncertainty [1]
When will OpenAI commercialize the API? (~August/September)
They released the API in June and indicated a 2 month beta, so it would begin generating revenue in August/September [2]
Will the API reach $100M revenue? (90%)
Eliezer is willing to bet there’ll be 1B in revenue from GPT-like services in 2025. This broader than just the revenue from the OpenAI API, but is also a lot more than 100M
A tiny list of industries OpenAI API will affect, to give reference points:
Journalism: 63B in 2014 in the US (100M is 0.1% of this)
Gaming: 159B globally in 2020 (100M is 0.06% of this)
Chatbot: 2.6 billion globally in 2019 (100M is 3.8% of this)
It seems absurd to me that OpenAI wouldn’t generate 100M from the API *at some point*, but I’ve adjusted down because it’s easy to be overconfident about exciting tech like this
If it does reach $100M, when will it?
This article suggests that SaaS companies started in the last 15 years took 8 years to reach $100M ARR
The question asks about total revenue not ARR, so this timescale would be a lot shorter
What do you think? Are you more bullish on it generating 100M sooner? (My median was April 17, 2022 – this seems like it could be a bit late, but ultimately I’m not that certain in the 2021 – 2024 range). Here’s a blank distribution if you want to make your own!