OpenAI’s gamble with ChatGPT Pro – the premium subscription service – has not worked out as the AI research company had planned (the subscription service is too popular, from the looks of it). According to Sam Altman, the company is losing money on the $200-per-month plan, contrary to initial expectations. In a post on X (formerly Twitter), Altman admitted that he had set the price with the intention of generating revenue, but the usage of the service has exceeded their projections, leading to unexpected costs.
insane thing: we are currently losing money on openai pro subscriptions!
people use it much more than we expected.
— Sam Altman (@sama) January 6, 2025
To provide some context, ChatGPT Pro was rolled out last year – a $200-per-month subscription plan that allows users to gain greater access to OpenAI’s advanced AI models. Notably, subscribers can use the “o1 reasoning” model, which is designed to deliver more accurate and reliable answers to questions. The subscription also offers an upgraded mode and removes rate limits on other OpenAI tools, such as the Sora video generator, as well as advanced voice mode.
The features themselves promise an upgraded experience for users, and Altman explained that while the company anticipated a strong user response to the advanced features, the sheer volume of usage has caused the company to incur more operational costs than planned.
OpenAI’s financial difficulties are not entirely new. Despite raising an impressive $20 billion in funding since its inception, the company has yet to achieve profitability. In 2023, OpenAI reported losses of approximately $5 billion, despite generating $3.7 billion in revenue. The company’s financial losses are largely attributed to the substantial costs of maintaining its AI models, which can run into hundreds of thousands of dollars per day. For instance, operating ChatGPT alone was estimated to cost OpenAI roughly $700,000 per day at peak usage.
These operational costs, including expenses for staffing, office space, and AI infrastructure, have made it difficult for OpenAI to turn a profit. As a result, the company is exploring new ways to address its financial challenges. The AI research firm has earlier admitted that more funding is required for the firm to remain financially viable in the long term.
Going forward, it is likely that the company may increase subscription fees for its various offerings, including the ChatGPT Pro plan. Additionally, OpenAI is exploring the possibility of introducing usage-based pricing models for certain services, alongside raising more capital. The firm currently projects substantial revenue growth, with expectations to reach $11.6 billion in revenue in 2024 and an ambitious target of $100 billion in annual revenue by 2029.
