Islamabad, Jan 6: OpenAI CEO Sam Altman recently revealed that the company is incurring financial losses on its $200-per-month ChatGPT Pro plan, which was launched to provide users with access to the advanced GPT-4 model and additional tools like the Sora video generator. Despite these premium offerings, the subscription price has proven insufficient to cover the unexpectedly high demand and usage. Altman admitted in a series of posts on X that he personally set the price, initially believing it would generate profit, but it turned out that the company underestimated the scale of usage.
OpenAI, which has raised nearly $20 billion since its inception, is still struggling to reach profitability. The company projected a loss of $5 billion for 2024 against expected revenue of $3.7 billion. The financial challenges are exacerbated by substantial costs associated with staffing, office space, and the high expenses required for AI training infrastructure. At one point, operating ChatGPT alone was estimated to cost OpenAI $700,000 per day.
To address these challenges, OpenAI is planning a corporate restructuring aimed at attracting new investments. As part of this effort, the company is considering increasing the prices of its subscription plans to offset its losses and move toward profitability.
Despite these immediate financial hurdles, OpenAI remains optimistic about its long-term prospects. The company projects that its revenue could reach $100 billion by 2029, positioning it alongside multinational corporations like Nestlé. However, achieving this ambitious target will likely require significant adjustments to its pricing strategy and a more sustainable approach to managing operational costs.
