The New York Times, citing internal OpenAI documents, said the company plans to raise the price of individual ChatGPT subscriptions from $20 a month to $22 a month by the end of this year.
The bigger increase will come in the next five years: by 2029, ChatGPT Plus is expected to cost $44 a month. The plan reflects pressure from OpenAI’s investors to reduce losses.
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| ChatGPT is currently priced at $20/month. (Source: Bloomberg) |
According to the New York Times , although the company's monthly revenue reached $300 million in August, the startup predicts a loss of nearly $5 billion this year.
Costs like staff, office space, and AI training infrastructure are the main culprits. ChatGPT alone can sometimes cost $700,000 a day.
OpenAI could face backlash if it raises its prices too quickly. While ChatGPT has nearly 10 million paying users, surveys show many believe its current $20-a-month price is too high.
OpenAI is expected to generate $3.7 billion in revenue in 2024, according to CNBC . The $300 million in revenue in August represented a 1,700% increase from the beginning of the year. Revenue could rise to $11.6 billion in 2025.
OpenAI is currently in the midst of a new funding round that could value the company at more than $150 billion. Trive Capital is leading the round and plans to invest $1 billion. The round will close next week, CFO Sarah Friar said.
Over the past week, a number of key OpenAI staff members have announced their departures, most notably Chief Technology Officer Mira Murati, who left after 6.5 years at the company.
Also this week, news emerged that OpenAI’s board is considering restructuring as a for-profit company. The company will maintain its nonprofit arm as a separate entity.
OpenAI's offerings have exploded since ChatGPT launched in late 2022. The company licenses a variety of tools, including GPT's large language models. Running such models requires a huge investment in Nvidia graphics processors.
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