In a surprising revelation, OpenAI CEO Sam Altman disclosed that the company is currently incurring losses on its ChatGPT Pro plan, priced at $200 per month. The unexpected high demand for the subscription service has led to operational costs outpacing revenue.
Altman shared this information on X, formerly Twitter, stating that users are utilizing the service much more than anticipated. He also hinted that the current pricing may be reviewed to generate more revenue for the company.
OpenAI’s Financial Struggles
Despite raising around $20 billion since its inception, OpenAI has yet to achieve profitability. The company reportedly 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.
To move toward profitability, OpenAI is considering price increases across its subscription tiers. The company has also admitted that it requires “more capital than it imagined” and is preparing for a corporate restructuring to attract additional investments.
Growth and Competition
In a separate blog post, Altman reflected on the company’s growth over the past two years, highlighting the increase in active users from 100 million to over 300 million. However, OpenAI has faced criticism and attacks from competitors, including Elon Musk, who co-founded the company before pulling out.
Musk has been vocal about his opposition to OpenAI’s transition to a for-profit entity, seeking a court injunction to halt the move. Musk alleges that the transition is “illegal” and warns of the potential dominance of OpenAI’s ChatGPT in the artificial intelligence market, which he claims threatens competitors, including his own AI startup, xAI.
As OpenAI navigates its financial struggles and competitive landscape, the company remains committed to advancing its research and deployment of AI technologies, while prioritizing safety and benefits sharing.