You could soon be paying more for ChatGPT, as OpenAI reportedly plans to raise the monthly subscription price for its popular AI tool. According to sources, OpenAI is looking to charge users US$22 a month by the end of this year and increase that price to as much as US$44 per month within the next five years.
Rising costs expected to offset expenses
The report, first obtained by The New York Times, indicates that OpenAI is sharing these details with potential investors as part of its fundraising efforts. The company expects significant revenue growth, with projections showing an intake of US$300 million in August 2024 alone. OpenAI anticipates total sales to reach US$3.7 billion by the year's end. Despite these impressive figures, the company is still forecast to face a financial shortfall, losing around US$5 billion in 2024 due to various operational expenses such as staff salaries, rent, and other overhead costs.
To bridge this gap, OpenAI is turning to investors. The company is valued at a staggering US$150 billion and hopes to attract up to US$7 billion in fresh investments. This funding would help to cover the shortfall and support OpenAI's plans to continue growing its product offerings and services. These financial projections reflect the company's aggressive push to secure its future amidst rising costs and demands.
Transition to a for-profit model
One key change underway at OpenAI is transitioning from a non-profit model to a for-profit one. By moving away from its original non-profit status, OpenAI will be able to eliminate the restrictions that limit the return investors can make. This shift could make it easier for OpenAI to attract more significant investments at higher rates, giving it more room to negotiate favourable terms with new financial backers.
The price increase for ChatGPT could also boost the company's income. OpenAI's plans to charge US$22 per month for the service this year are expected to help offset rising costs, and the projected US$44 monthly fee within five years could bring in even more revenue. The higher subscription costs will likely cover the expenses of maintaining and advancing AI technology.
As OpenAI looks for ways to fund its future, this price increase will be one of the steps the company takes to remain competitive in the artificial intelligence space. ChatGPT has quickly become one of the most popular AI tools globally, and OpenAI's pricing strategy will be closely watched by both users and industry experts alike.
For now, users will need to monitor potential pricing updates as OpenAI continues to push for growth. The company's ambitious plans to secure its financial future signal that changes are on the horizon for the AI landscape.
