On Sunday, Microsoft Corp (NASDAQ:MSFT) backed OpenAI CEO Sam Altman disclosed that the company is currently operating at a loss on its $200 per month ChatGPT Pro plan.
Although the plan was designed to generate revenue, it is not producing the profits OpenAI had anticipated. Altman shared his thoughts on the issue through a series of posts on X, stating that the price was set under the assumption that it would help the company earn revenue, but usage has exceeded their expectations.
"we are currently losing money on openai pro subscriptions! people use it much more than we expected," he said.
OpenAI launched ChatGPT Pro late last year to offer its users an upgraded experience. The new plan offers unlimited access to all of OpenAI's models, including the advanced "o1" reasoning model.
Internal testing showed a 34% reduction in major errors on difficult questions compared to the preview version.
The latest funding is said to be one of the largest private investments ever alongside SpaceX and TikTok parent ByteDance.
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It is to be noted that the company plans to transition from being controlled by a nonprofit board to a new structure, paving the way for an initial public offering (IPO) in the future.
However, Billionaire and OpenAI co-founder Elon Musk has filed for an injunction to halt the transition, accusing OpenAI of deviating from its original mission.
In 2023, the company projected losses of about $5 billion on $3.7 billion in revenue. High operating expenses, including costs of approximately $700,000 per day to support the ChatGPT platform, are contributing to its financial struggles.
To counter these losses, OpenAI is exploring strategies to become profitable. One potential solution involves increasing the price of its subscription tiers.
Also, Sam Altman shared his thoughts in a blog post regarding the company's ongoing efforts to build artificial general intelligence (AGI) and its eventual goal of superintelligence.
"With superintelligence, we can do anything else. Superintelligent tools could massively accelerate scientific discovery and innovation well beyond what we are capable of doing on our own, and in turn massively increase abundance and prosperity."
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