OpenAI, the company responsible for the wildly popular chatbot ChatGPT, has over 1 million paying subscribers, each contributing $20 (or more for Teams and Enterprise plans). However, this doesn’t seem to be enough to sustain the company’s financial health, especially considering that hundreds of millions of people use the chatbot for free. According to The Information, OpenAI is considering a dramatic increase in its subscription prices, potentially reaching a staggering $2,000 per month for access to its latest AI models. This move comes amidst persistent rumors of the company’s potential bankruptcy.
While anyone can access OpenAI’s ChatGPT for free, subscribers enjoy certain advantages. These include priority access to the AI model during peak usage periods, early access to new features, and the ability to create custom GPTs. OpenAI only recently made its Dall-E image generator available behind a paywall, following a similar model.
Citing internal discussions, The Information reports that OpenAI is considering hiking the price of its subscription service by a whopping 9,900%. However, the reasoning behind this drastic move remains unclear. It’s also unclear whether this price increase would apply to the current ChatGPT service running on the GPT-4 model or to the upcoming Strawberry and Orion models.
Generative AI, like the technology powering ChatGPT, is an expensive business. From hardware procurement and data center infrastructure to the energy and cooling required, the costs are significant. Furthermore, training large language models is a resource-intensive process. OpenAI, often seen as the leader in the field, reportedly spent $7 billion training its models – a figure that dwarfs its $1.5 billion staffing costs. The company is projecting losses of a staggering $5 billion and, based on current projections, could be facing bankruptcy within the next year. However, a recent round of funding from investors will likely delay any immediate financial crisis.
OpenAI is also facing growing competition from other generative AI companies. Google and Anthropic continue to develop increasingly capable and competent chatbots, offering similar features to ChatGPT at comparable subscription prices. Apple Intelligence is also poised to enter the market, with plans to roll out its AI services on mobile devices and desktop computers next month.
This news comes at a time when investors are increasingly concerned about the massive amounts of money companies like Google and Microsoft are investing in AI technology without a clear path to profitability. The future of OpenAI and the generative AI landscape remains uncertain, but the potential price increase and the growing competition suggest a challenging path ahead for the company.
