OpenAI recently surpassed 1 million subscribers, each paying $20 (or more, for Teams and Enterprise), but that doesn’t seem to be enough to keep the company financially afloat given that hundreds of millions of people use the chatbot for free.
According to The Information, OpenAI is reportedly mulling over a massive rise in its subscription prices to as much as $2,000 per month for access to its latest and models, amid rumors of its potential bankruptcy.
Anyone can use OpenAI’s ChatGPT service for free; however, subscribers gain priority access to the AI model during times of peak usage, early access to new features, and the ability to create custom GPTs (the company only recently wheeled out its Dall-E image generator from behind the paywall). Citing early internal discussions, The Information reports that OpenAI is reportedly considering hiking the price of access by a whopping 9,900%, however there is no official word yet on the reasoning for such a move. It is also unclear if that price increase would apply to the current ChatGPT service running on the GPT-4o model, or to the upcoming Strawberry and Orion models.
Between hardware procurement, data center infrastructure, energy and cooling, not to mention the cost of actually training a large language model, generative AI is an expensive business. OpenAI, arguably the standard bearer for the industry, reportedly has spent $7 billion on training its models (compared to just $1.5 billion on staffing), is projecting losses of $5 billion (with a “B”), and based on projections, could be filing for bankruptcy within the next year — though a recent round of funding from investors will likely delay the need for drastic financial action.
OpenAI is also facing increased competition from the rest of the generative AI field. Google and Anthropic continue to iterate more competent and capable chatbots while matching OpenAI’s current subscription pricing, and Apple Intelligence is expected to begin rolling out to mobile devices and the desktop next month. This news also comes as investors grow increasingly anxious about the amount of money companies like Google and Microsoft are sinking into AI technology without seeing a particularly strong path to profitability.
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