Without a doubt, ChatGPT is the most popular AI-powered tool available on the consumer market. The AI chatbot is becoming what Google is to online search, but in the artificial intelligence segment. You probably think that OpenAI is making a ton of money from the premium subscriptions for the service. However, the company is losing money even with the expensive ChatGPT Pro plan.
OpenAI is still losing money even with its latest $200 ChatGPT Pro plan
Sam Altman, CEO of OpenAI, confirmed that the ChatGPT Pro plan is not profitable for the company. The main problem is that people are using it too much, even at higher levels than the company itself expected. It’s noteworthy that ChatGPT Pro is not cheap, costing $200 per month or $2,400 per year. OpenAI just launched this tier in early December 2024, but it didn’t choose the price/perks correctly.
Apparently, OpenAI is a bit arbitrary when it comes to setting prices for its plans. Companies that offer paid tiers usually do thorough market and cost-benefit studies before choosing a price that is profitable, whether in the short, medium, or long term. However, ChatGPT’s parent company keeps things much simpler.
“I personally chose the price…and thought we would make some money,” Altman said recently in a series of X/Twitter posts. The CEO of OpenAI had already said that he did something similar with the price of ChatGPT’s first premium plan. He arbitrarily came up with $20 and $42 as potential prices for the plan, without any prior study or analysis. “People thought $42 was a little too much. They were happy to pay $20. We picked $20. Probably it was late December of 2022 or early January. It was not a rigorous ‘hire someone and do a pricing study’ thing,” he added.
By 2024, the company reportedly projected revenues of $3.7 billion and expenses of $5 billion. This could be one of the reasons why OpenAI wants to switch to a for-profit model. Even the roughly $20 billion in funding it has raised since its founding has not saved it from losses. It costs a lot to make AI-powered products, especially if it wants to be the market leader.
The company could change some things to seek profitability
OpenAI could be considering some measures to take the path to profitability. Altman suggested the arrival of a possible use-based pricing model for some services or features. A potential increase in paid plans is also on the table. It would also be smart for the company to hire financial analysts to help it set the right prices for its plans and services.
That said, OpenAI has some optimistic expectations for this year and going forward. They expect to achieve revenue of $11.6 billion in 2025 and reach $100 billion by 2029.
