OpenAI runs into Financial Despair.
Sam Altman, the CEO of OpenAI is apparently in distress as he stated that due to the unexpected excessive ChatGPT Pro usage, they are facing immense loss on its 200$ per month ChatGPT Pro Plan. Altman in one of his recent posts on X stated, “I determined the cost and figured that we would earn money.” This implies a lack of strategy and long-term vision, as a ChatGPT-powered AI chat box did not have a completely structured pricing plan that could be followed. This is not the first time OpenAI swiftly set its pricing structures without considering them in detail.
Enchanting Features
ChatGPT Pro emerged a year ago and enchanted its users with various features, such as unlimited access to the o1 reasoning AI Model with o1 professional mode and even access to Sora, a video-generating tool made by the OpenAI squad.
Is ChatGPT Pro worth $2,400 a year?
The fact that ChatGPT Pro was primarily criticized for being too expensive lies in the idea of it being considered mainstream. The annual fee of about $2,400 is quite a hefty price, especially when the worth of o1 pro mode at least has not been established. As per Altman’s tweets, those who chose this plan are just heavy grey users consuming the service to its max. Altman, in one of his latest interviews with Bloomberg, recognized that the markup for ChatGPT was charged in the beginning without conducting any research. He said, we considered $20 and $42 as two possible prices and they went with $20 because $42 was believed to be too much, it was not a thoughtful plan and a snap decision towards the end of December 2022 or the start of January.
OpenAI’s Lofty Revenue Targets
After garnering cumulatively around $20 billion since its startup, OpenAI continues to experience a loss of around $5 billion on revenue of $3.7 billion. To become profitable, the company is believed to be increasing subscription fees, and some services may be transitioned into usage-based pricing. In the future, OpenAI intends to reach $100 billion in revenue in 2029.
