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!
Conditional on OpenAI API generating at least $100M in total revenue for OpenAI, by what year will that happen?
(You might also want to combine this with an estimate of the binary variable of whether it will generate $100M in revenue at all.)
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!