OpenAI Raises ChatGPT Subscription Fee to $44 by 2029 • DigiCala Mag

OpenAI, the artificial intelligence giant that wowed the world with ChatGPT, is stuck between profitability and costs. Documents obtained by The New York Times show that the startup plans to raise ChatGPT’s subscription fee to $22 by the end of the year and to $44 over the next five years.

The decision comes as OpenAI earned $300 million in revenue this August and expects to reach $3.7 billion in sales by the end of the year. However, skyrocketing expenses such as personnel salaries, rent, and operating expenses will cause the startup to lose $5 billion this year.

OpenAI seems to be attracting new investors to deal with this growing loss, and the said documents are part of the company’s efforts to encourage investors to participate in the new round of financing. OpenAI is currently valued at $150 billion and is expected to raise up to $7 billion in this new round.

But a significant increase in the ChatGPT subscription fee could be a big risk for OpenAI. While ChatGPT currently has around 10 million paid users, surveys show that many current users find the $20/month fee too expensive. A sudden price increase can lead to a drop in users and a decrease in revenue.

Along with this challenge, OpenAI is changing its structure from a non-profit to a for-profit company. This change will allow investors to earn more profit without limits and OpenAI will be able to negotiate with new investors more strongly.

However, becoming a for-profit company can also bring criticism. Critics believe that this change will shift OpenAI’s focus from artificial intelligence development to mere profit-making, and could be detrimental to scientific and ethical progress in the field.

The future of OpenAI is uncertain. Can this startup become profitable by increasing subscription fees and attracting new investors, or will it sink in the swamp of expenses? Time will tell the answer to this question.

Source: Engadget