OpenAI CEO Sam Altman said the company was not making money on its most expensive offering, the $200 ChatGPT Pro subscription. While this should not be surprising, given that OpenAI is a loss-making company, Altman revealed that he expected otherwise.
“We are currently losing money on OpenAI Pro subscriptions! People use it much more than we expected,” he said in a post on X. “I personally chose the price and thought we would make some money,” he added. These expectations align with the company’s plans to further transition away from a non-profit business model.
In December of last year, OpenAI announced the $200 ChatGPT Pro plan. This plan includes all the features of the Plus plan and access to the additional o1 Pro mode, which is said to use “more compute for the best answers to the hardest questions”. The model has been met with praise ever since its debut.
Pretty high praise for o1 pro out on reddit pic.twitter.com/nObgXcQ5Ja
— Alex Teichman (@alex_teichman) December 31, 2024
There was initial scepticism when the high-price tag subscription was launched, but Altman clarified that it’s not for everybody and a majority of the users will not need it. “Most users will be very happy with the o1 in the plus tier,” he said, indicating that the $20 ChatGPT Plus plan would suffice for the majority.
Altman’s statements today indicate that people are open to paying big bucks for OpenAI’s models, which costs the company much more in computing and inference. Eventually, it seems like OpenAI will release more expensive plans.
It’s recently announced o3 model ranks atop all benchmarking tests but has high costs. The model scored the highest in the ARC-AGI benchmark but costs a whopping $1000 per task.
Recently, OpenAI CFO Sarah Friar suggested that the company may charge $2000 a month to replace humans with a PhD-level assistant.
Overall, profitability will mean more than ever for OpenAI, which also dictates the definition of artificial general intelligence (AGI). As of now, the company defines it as “a highly autonomous system that outperforms humans at most economically valuable work.” When they announce AGI, Microsoft, one of its major investors, will lose access to OpenAI’s most powerful models.
Microsoft does not want to settle for a subjective, vague definition of AGI, and both companies have reportedly agreed that AGI will only be achieved when OpenAI earns $100 billion in profits. In 2024, OpenAI reported a $5 billion loss on $3.7 billion in revenue. Reports suggest that it is unlikely to become profitable before 2029.
However, reports also suggested that OpenAI was trying to remove the ‘AGI’ clause from their agreement. While OpenAI has yet to officially announce the ‘profit-driven’ definition for AGI, Altman said in a blog post that the company was ready to announce it in 2025.
“We are now confident we know how to build AGI as we have traditionally understood it. We believe that, in 2025, we may see the first AI agents “join the workforce” and materially change the output of companies,” he said.
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