OpenAI losing money on $200 ChatGPT Pro Plan due to overuse

OpenAI has expressed that the company is currently on the losing end of its $200 ChatGPT Pro monthly plan due to its overuse. According to the company’s CEO, Sam Altman on Sunday, he noted that subscribers are using it more than the tech firm expected.

Expressing the reaction on his X post, the OpenAI Chief highlighted how he fixed the monthly plan price with the thought that it would fetch more returns. “I personally chose the price and thought we would make some money,” he said.

Following its launch late last year, ChatGPT Pro grants access to an upgraded version of OpenAI’s o1 “reasoning” AI model, o1 pro mode. It also lifts rate limits on the company’s other tools, including its Sora video generator.

Despite raising around $20 billion since its founding, OpenAI has not been profitable. In the same light, the company expected to accumulate losses of about $5 billion on revenue of $3.7 billion in 2024. 

Operating costs such as staffing, AI training infrastructure and office rent have been milking the company’s revenue while ChatGPT reportedly cost OpenAI an estimated $700,000 per day at some point. 

In its efforts to accumulate more capital, the tech giant is preparing to undergo a corporate restructuring in a bid to attract new investors. This follows its realization that it needs “more capital than it imagined.” 

Additionally, OpenAI optimistically projects that its revenue will reach $100 billion in 2029, which will match the current annual sales of Nestlé. This might see OpenAI increase the price of its various subscription tiers.

Recent OpenAI developments

Recall that in December, OpenAI introduced an advanced-priced tier for its chatbot ChatGPT featuring unlimited access to its most powerful artificial intelligence designs where it announced that ChatGPT pro costs $200 (N150,000) a month.

Moreover, OpenAI said that the new advanced model was upgraded to perform human-like reasoning tasks and offers access to an expanded version of its current reasoning model — o1. In addition to the OpenAI software development, it also offered a ChatGPT Plus subscription for $20 (N15,000) a month, which is a tenth of the new option’s cost.

The new feature release matched a period when the San Francisco-based OpenAI was looking to raise billions in funding and faced heightened competition in the race to develop more sophisticated artificial intelligence systems. Like other competitors in the AI industry such as Google and Anthropic, Open AI has been working to convince customers and businesses to pay for its software. This will help offset the high costs of building cutting-edge artificial intelligence systems.

Also in December during its 12 days of live-streamed product events, OpenAI unveiled a new version of its text-to-video generation model called Sora Turbo. Nearly 10 months after the company previewed the Sora model, it announced that the latest version would be available to Chat GPT Plus and Pro users via a designed website. The new model generates videos up to 20 seconds long at resolutions of 1080p from a text or image prompt.

“We developed a new version of Sora—Sora Turbo— that is significantly faster than the model we previewed in February. We’re releasing it today as a standalone product at Sora.com to ChatGPT Plus and Pro users,” the company said in a statement.

The company stressed that the new Sora’s availability will be limited and those who pay $20 monthly for a ChatGPT Plus subscription will have access to generate only 50 videos monthly. However, users who pay $200 for a ChatGPT Pro subscription only have unlimited access to “slower” generations and 500 videos created at a faster speed.

In addition, Sora Turbo also includes an option called Storyboard. This feature allows people to write out what they want to happen at different points in a video in order to better direct a sequence of clips. There’s also an option to explore a feed of videos created by other users.

However, the company acknowledged technical limitations in the latest release while noting during the live stream launch that the early version of Sora will make mistakes as it’s not perfect.

Meanwhile, other tech giants have also ventured into the building of reasoning ability with their advanced AI models. Open AI, Google, and others have also been working to build more convincing models that can field challenging queries by taking extra time to compute an answer.

The “reasoning” process could help improve the performance of leading AI systems at a time when Open AI and some of its rivals are seeing diminishing returns from their costly efforts to build better models. 

Also Read: Open AI launches ChatGPT pro that performs human-like reasoning, to cost $200 a month.