Summary:
- OpenAI’s ChatGPT Pro plan, priced at $200 monthly, is operating at a loss due to higher-than-expected usage rates, as revealed by CEO Sam Altman who personally set the price point.
- The company faces significant financial challenges with projected losses of $5 billion against $3.7 billion revenue last year, despite raising $20 billion since its founding.
- Daily operational costs for ChatGPT reached approximately $700,000, driven by expenses in staffing, office space, and AI training infrastructure.
- OpenAI plans corporate restructuring and potential subscription price increases while maintaining an ambitious revenue target of $100 billion by 2029.
OpenAI’s ambitious ChatGPT Pro subscription service is proving costlier than anticipated, with CEO Sam Altman revealing that the $200 monthly plan is currently operating at a loss due to unexpectedly high usage rates.
“I personally chose the price and thought we would make some money,” Altman disclosed in recent posts on X, highlighting the challenges facing the AI giant’s premium offering.
The ChatGPT Pro service, launched in late 2024, provides subscribers with enhanced features including access to the advanced o1 “reasoning” AI model and removes rate limits on various tools, including the Sora video generator. However, the high operational costs have overshadowed these premium offerings.
The financial strain extends beyond the Pro plan, as OpenAI faces significant broader fiscal challenges. The company anticipates substantial losses of approximately $5 billion against revenue of $3.7 billion for the previous year, despite having secured around $20 billion in funding since its inception.
Daily operational expenses have reached staggering levels, with ChatGPT alone previously costing an estimated $700,000 per day. These costs stem from various sources, including staffing, office space, and the substantial infrastructure required for AI model training.
Looking ahead, OpenAI is exploring strategic options to address its financial challenges. The company has acknowledged requiring more capital than initially projected and is preparing for a corporate restructuring to attract new investments. One potential solution under consideration is increasing subscription prices across various tiers.
Despite current challenges, OpenAI maintains an optimistic long-term outlook, projecting ambitious revenue goals of $100 billion by 2029 – a figure comparable to Nestlé’s current annual sales. This target represents a dramatic increase from their current revenue streams and highlights the company’s confidence in the growing demand for AI services.
The situation underscores the complex economics of operating cutting-edge AI services, where high user engagement can paradoxically lead to increased financial pressure rather than profitability.
Source: Techcrunch
