Hajra Naz
OpenAI CEO Sam Altman recently disclosed that the company is incurring losses on its $200-per-month ChatGPT Pro plan due to higher usage. Altman said in a series of posts on X “I chose the price and thought we would make some money.”
ChatGPT Pro Usage Exceeds Expectations
Introduced late last year, ChatGPT Pro offers users access to OpenAI’s advanced o1 “reasoning” AI model, the exclusive o1 Pro mode, and fewer restrictions on tools like the Sora video generator. While these premium features have attracted a significant user base, the current pricing model has fallen short of covering the unexpected surge in usage.
Financial Pressures on OpenAI
Despite raising nearly $20 billion in funding (according to Crunchbase), OpenAI is yet to achieve profitability. Reports indicate that the company is anticipating losses of $5 billion against projected revenue of $3.7 billion in 2024 (according to CNBC.com). These challenges stem from high operational costs, including staffing, office expenses, and the significant resources required to maintain and train AI models. According to ycombinator.com, ChatGPT reportedly cost OpenAI $700,000 per day to run at its height.
As a result, OpenAI is looking into ways to raise more money, such as reorganizing its business to draw in new investors. As part of these efforts, the company is considering increasing subscription plan prices to help offset its substantial operational expenses.
Optimistic Goals for the Future
Notwithstanding its present financial difficulties, OpenAI is optimistic about its future expansion. The business expects its revenue to reach an incredible $100 billion by 2029, matching that of global giants like Nestlé.
But reaching this lofty goal will necessitate thoughtful strategy changes, such as reconsidering subscription pricing and cutting expenses. By taking these steps, OpenAI intends to overcome its financial difficulties and maintain its position as a pioneer in the AI sector.
