Sam Altman says OpenAI ‘losing money’ on pro subscriptions

OpenAI CEO Sam Altman said that the company is losing money on its pro subscription services, claiming that people were using it much more than expected.

“Insane thing: we are currently losing money on OpenAI pro subscriptions! People use it much more than we expected,” Altman said in a post on the social media site X on Sunday evening. 

OpenAI had in December launched a new subscription tier called ChatGPT Pro, which offers users nigh-unlimited access to ChatGPT tools for $200 a month. The subscription also provides exclusive access to a model called o1 pro mode that uses more computing power to provide answers.

Apart from pro, OpenAI has a $20 monthly subscription for access to ChatGPT’s latest model. The company also provides free access to the AI tool.

ChatGPT was one of the fastest-growing applications in terms of users, seeing over a 100 million users within months of its launch in late-2022.

But a slew of media reports over the past year underscored OpenAI’s unprofitability, as the Microsoft-backed AI giant burnt through cash with rapidly increasing operational costs- tied largely to the high amounts of processing power required to run its flagship AI models. 

While OpenAI does generate steady revenue from its subscription services, especially through enterprise deals, its operational costs have largely overshadowed its income. 

A New York Times (NYSE:NYT ) report in September said the firm was set to clock a loss of $5 billion in 2024, against revenues of $3.7 billion. 

The firm had in October completed a $6.6 billion funding round that valued the AI giant at $157 billion. Tech giants including Microsoft Corporation (NASDAQ:MSFT ) and NVIDIA Corporation (NASDAQ:NVDA ) had participated in the round.

Source: Investing.com