OpenAI CEO Sam Altman has revealed that the company is currently losing money on its $200-per-month ChatGPT Pro plan due to unexpectedly high user demand.
Altman stated this in a post on X, formerly Twitter.
ChatGPT Pro, launched in late 2023, offers users access to an upgraded AI model, “o1 Pro,” and removes rate limits on other tools, including OpenAI’s Sora video generator.
However, the cost of operating the platform has outpaced revenue generated by the subscription.
“Insane thing: we are currently losing money on OpenAI Pro subscriptions! People use it much more than we expected,” Altman said.
Suggesting that the current price for the service may be reviewed to generate more revenue for the company, Altman added “I personally chose the price, and thought we would make some money.”
Far from profitability
Despite raising around $20 billion since its inception, OpenAI has yet to achieve profitability. Reports indicate the company faced losses of approximately $5 billion in 2023, compared to revenue of $3.7 billion.
- Key expenses include staffing, office rent, and the substantial costs of training and running AI infrastructure. At one point, ChatGPT alone was costing OpenAI an estimated $700,000 daily to operate.
- As OpenAI prepares for a corporate restructuring to attract additional investments, the company has admitted it requires “more capital than it imagined.”
- To move toward profitability, OpenAI is reportedly considering price increases across its subscription tiers.
Over 300 million active users
Meanwhile, in a new year reflection posted on his blog on Monday, Altman highlighted the company’s growth in the last two years.
“We have done what is easily some of our best research ever. We grew from about 100 million weekly active users to more than 300 million.
“Most of all, we have continued to put technology out into the world that people genuinely seem to love and that solves real problems,” he said.
Attacks from competition
While noting that OpenAI has faced all sorts of attacks from competitors because it was taking the lead in the industry, Altman said that would not change the company would not change its vision as a result of that.
“Our tactics will continue to evolve. For example, when we started we had no idea we would have to build a product company; we thought we were just going to do great research.
“We also had no idea we would need such a crazy amount of capital. There are new things we have to go build now that we didn’t understand a few years ago, and there will be new things in the future we can barely imagine now.
“We are proud of our track record on research and deployment so far and are committed to continuing to advance our thinking on safety and benefits sharing,” he said.
What you should know
OpenAI has been heavily attacked by Elon Musk, who was also one of the company’s founders before he pulled out.
- Specifically, Musk, who is also promoting his AI company, xAI, is fighting the company’s moves to transit into a for-profit entity.
- In December, Musk escalated his legal battle against OpenAI by seeking a court injunction to halt the company’s transition to a for-profit structure.
- Musk alleged the move is “illegal” and warned of the potential dominance of OpenAI’s ChatGPT in the artificial intelligence market, which he claims threatens competitors, including his own AI startup, xAI.
- In court filings, Musk accused OpenAI and its CEO, Sam Altman, of abandoning the nonprofit mission they founded together in 2015.
