OpenAI CEO Sam Altman on Sunday said that the company is currently losing money on its $200-per-month ChatGPT Pro plan because people are using it more than the company expected.
“I personally chose the price,” Altman wrote in a series of posts on X, “and thought we would make some money.”
ChatGPT Pro, launched late last year, grants access to an upgraded version of OpenAI’s o1 “reasoning” AI model, o1 pro mode, and lifts rate limits on several of the company’s other tools, including its Sora video generator.
ChatGPT Pro’s price point wasn’t a slam dunk at launch. It’s $2,400 per year, and the value proposition of o1 pro mode in particular remains murky. But judging by Altman’s posts, it seems that users who have bitten the bullet are making the most of it — at OpenAI’s expense.
It’s not the first time OpenAI has priced a product somewhat arbitrarily. In a recent interview with Bloomberg, Altman said that the original premium plan for OpenAI’s AI-powered chatbot, ChatGPT, didn’t have a pricing study.
“I believe we tested two prices, $20 and $42,” he told the publication. “People thought $42 was a little too much. They were happy to pay $20. We picked $20. Probably it was late December of 2022 or early January. It was not a rigorous ‘hire someone and do a pricing study’ thing.”
OpenAI isn’t profitable, despite having raised around $20 billion since its founding. The company reportedly expected losses of about $5 billion on revenue of $3.7 billion last year.
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Expenditures like staffing, office rent, and AI training infrastructure are to blame. ChatGPT was at one point costing OpenAI an estimated $700,000 per day.
Recently, OpenAI admitted it needs “more capital than it imagined” as it prepares to undergo a corporate restructuring to attract new investments. To reach profitability, OpenAI is said to be considering increasing the price of its various subscription tiers. Altman also hinted in the Bloomberg interview that OpenAI may explore usage-based pricing for certain services.
OpenAI optimistically projects that its revenue will reach $11.6 billion this year and $100 billion in 2029, matching the current annual sales of Nestlé.
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