OpenAI
If you’ve been enjoying the perks of ChatGPT’s subscription, you may soon notice a change in the plan’s pricing. OpenAI, the company behind ChatGPT, is facing significant financial challenges, despite rapid growth in its user base and revenue. While its monthly revenue surged to $300 million in August, the company still expects to lose around $5 billion this year.
OpenAI has been sharing these financial updates with potential investors as part of a funding round that could bring in $7 billion and value the company at $150 billion, reports The New York Times. While the revenue numbers seem impressive—OpenAI projects $3.7 billion in sales for this year and a jump to $11.6 billion next year—the company’s expenses have skyrocketed alongside its growth.
Also read: Apple no longer in talks to join OpenAI’s $6.5 bn funding round, check details
A major expense for OpenAI comes from its reliance on Microsoft’s computing infrastructure. As OpenAI’s biggest investor, Microsoft has poured over $13 billion into the company. However, a significant portion of that investment is directed back to Microsoft’s cloud services, which power OpenAI’s products.
ChatGPT’s growing popularity has been a major revenue driver, with around 350 million users interacting with the platform each month. Of these, roughly 10 million users pay $20 per month for premium access. But to balance rising costs, OpenAI is reportedly planning to increase this price to $22 by the end of the year, with a more substantial hike to $44 expected within five years.
Despite these challenges, OpenAI is optimistic about its future. It expects to bring in $100 billion by 2029, a figure that rivals the annual revenue of major corporations like Nestle and Target. OpenAI is also restructuring its business model and considering a shift to a full for-profit company, which would attract more investments in the future.