OpenAI’s decision to pause new signups to its popular ChatGPT platform is the right move, according to analysts at Wedbush.
Microsoft-backed OpenAI temporarily halted new users on its ChatGPT large-language model due to a surge in usage that surpassed the platform's capacity, it said earlier this week.
The pause follows OpenAI's recent DevDay, where new features, including the GPT-4 Turbo model, were introduced. GPT-4 Turbo boasts knowledge of world events up to April 2023 and can process up to 300 pages of text in a single prompt, a substantial enhancement from previous limitations.
The platform's innovations, however, have seemingly overwhelmed OpenAI's servers, leading to the suspension of new registrations.
During DevDay, OpenAI also unveiled the integration of the AI-based image generator DALL·E 3 into GPT-4 and the inclusion of text-to-speech protocols into developers' API calls. The conference highlighted the platform's widespread adoption, with approximately 100 million individuals using OpenAI's services weekly, and over 90% of Fortune 500 companies developing tools using the platform.
“We see this news as generally positive for AI related infrastructure names,” Wedbush wrote in reaction.
According to Wedbush, the primary concern in the near future is whether the revenue generated by large-language models (LLMs) can justify the ongoing significant investment in AI hardware.
“In our view, the largest intermediate term question around AI hardware is, can revenue growth tied to LLMs justify continued accelerated infrastructure spend?" analysts wrote.
"As such, indications of growing user revenue/use cases for AI models (even if amounts are still modest when compared with spend on AI hardware to support LLM development) in turn moderate the likelihood of an elongated pause and or severe pullback in AI infrastructure spend.”
Amid the surge in demand, users have resorted to selling ChatGPT Plus accounts on platforms like eBay. While aftermarket sales aren't outright scams, purchasers receive shared access to an account, violating the platform's terms of service.
OpenAI advises potential subscribers to join the official waitlist for ChatGPT Plus to secure direct access and avoid potential account-sharing issues associated with resold subscriptions.