Some companies are leaders in building AI models such as OpenAI, Google DeepMind, Anthropic and others. These companies earn their revenues from multiple revenue streams — product offering, partnerships, licensing and cloud infrastructure.
API and Subscription Services
ChatGPT has paid tiers, say available for use at $ 20 a month. Thus, one major source of revenue is through subscriptions.
Companies make access available to their AI models through APIs. Later, businesses integrate these to their products and pay per usage (tokens, queries etc.)
Enterprise and B2B Services
Model making companies offer tailored or customized solutions to large enterprises, say OpenAI’s service to PwC.
Clients fine-tune base models or proprietary data for specific tasks and pay the model companies.
Cloud Infrastructure and Partnerships
Cloud providers such as Azure, Google and AWS invest in AI companies and then resell AI capabilities through their cloud platforms. Azure gets exclusive rights to host and sell OpenAI services against Microsoft’s investment in OpenAI.
Licensing
Companies license their models for use in third party applications, e.g. integration of ChatGPT in Microsoft Word, Excel as Co-pilot for which Microsoft has to pay OpenAI.
Advertising
This is not a common source for foundation models. Models that offer AI search, say Gemini or Perplexity can monetize through ads or sponsored results on the lines of traditional search engines.
Grants, Investments and Strategic Tie-ups
Venture capital firms, governments tech grants schemes offer funds to foundation model building companies. They are later monetized.
To illustrate, ChatGPT plus receives @ $20 a month from 10 million users (10 million x $20 =200 million per month. It equals a yearly revenue of $2.4 billion). It earns from Microsoft via Azure usage a share of user revenue. It earns for API access from business using GPT. PwC has made available ChatGPT to 1 lac employees, and OpenAI earns tens to hundreds of millions per client per year. Fine-tuned GPT models for legal, medical and financial usage provide earnings to OpenAI.