OpenAI is losing money on its pricey ChatGPT Pro plan, CEO Sam Altman says

OpenAI is losing money on its $200-a-month ChatGPT Pro due to higher-than-expected usage.

: OpenAI CEO Sam Altman reveals losses in the $200/month ChatGPT Pro plan due to unexpected user engagement, despite its high cost. Initially launched without a pricing study, the plan grants access to enhanced AI features, but the cost isn't offset by revenue. OpenAI, with expenditures like staffing and AI training, isn't yet profitable despite $20 billion in fundraising. The company foresees a $11.6 billion revenue in 2023, potentially restructuring to seek new investments.

OpenAI is currently experiencing financial losses with its $200-per-month ChatGPT Pro plan due to people utilizing the service more extensively than anticipated. According to CEO Sam Altman, prices were set based on his discretion but did not undergo a thorough pricing study, similar to other OpenAI products. The Pro plan offers an advanced version of OpenAI’s AI and removes rate limits, though its value remains unclear to some.

Despite raising around $20 billion since its inception, OpenAI remains unprofitable, with expenditures such as staffing and AI infrastructure adding significant costs. ChatGPT incurred expenses of an estimated $700,000 daily at its peak, contributing to OpenAI’s challenging financial state. Altman, in a Bloomberg interview, suggested exploring alternative pricing models, including usage-based fees, to improve profitability.

OpenAI is undergoing corporate restructuring to attract further investment and anticipates a future revenue increase, estimating $11.6 billion for this year and projecting $100 billion by 2029. Despite its high fundraising total, the company reported a loss of approximately $5 billion compared to last year's $3.7 billion in revenue. In the interim, adjustments to subscription prices across different tiers may be considered to reach financial stability.

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