The price of ChatGPT Plus could more than double in 5 years, find out why. Stay with us to learn more about this promising development.
Tl;dr
- ChatGPT is efficient but struggles to be profitable.
- OpenAI plans to significantly increase the subscription cost.
- The price increase aims to cover high operating costs.
A technological success, a financial challenge
ChatGPT’s journey illustrates a well-known reality of the technology industry: a product can be technologically revolutionary and yet financially difficult to maintain. Since its launch in November 2022 with the GPT-3.5 model, ChatGPT has taken the tech world by storm. However, as a recent New York Times report points out, it is not yet a financial success for its owner, OpenAI.
A necessary price increase
According to investor documents, OpenAI plans to “aggressively” increase the subscription price from the current $20 per month to $44 over the next five years. The objective? Reach $100 billion in annual revenue by 2029.
« Burning Through Piles of Money »the report warns, indicating that several price increases are expected for the paid ChatGPT Plus service.
The paid version of ChatGPT offers access to more advanced models, reduces the limitations of the free version and provides access to the DALL-E image generation tool. It is possible that new features will be added to make the price more attractive.
Profitability and balance
The need to increase prices is obvious. Despite forecasting healthy annual sales of $3.7 billion this year, OpenAI still expects overall losses of around $5 billion due to staff costs, rent and above all, the very high cost of the operation of its services.
It is therefore clear that the final price will depend on what the market is willing to pay. An increase in subscription costs would not close the financial gap if subscriber numbers fall due to high prices. In other words, the ambition is to reach $44 per month by 2029, but OpenAI may be forced to settle for less.
Optimism despite challenges
Investment documents remain optimistic about OpenAI’s prospects. With monthly revenue growth of 1,700% between the start of 2023 and August, the documents forecast a tripling of revenue to $11.6 billion next year and $100 billion by 2029. Despite These challenges, ChatGPT continues to regularly add new features for its users.
