OpenAI plans to double ChatGPT subscription cost by 2029
OpenAI, a big name in AI research, is mulling over a pretty hefty price increase for its personal ChatGPT subscriptions. According to The New York Times, some internal documents show a plan to bump the current $20/month fee, up to $22/month by the end of this year. This is just the start of a series of hikes, with the cost potentially doubling to $44/month for ChatGPT Plus by 2029.
Financial pressures behind the price hike
The upcoming price hike is OpenAI's way of tackling its financial woes. Even though they made $300 million in revenue last month, the company is bracing for a whopping $5 billion loss this year. The sky-high costs of hiring, office space, and setting up AI training are really eating into their profits. At one point, keeping ChatGPT running was burning a hole in their pocket to the tune of $700,000 per day.
User backlash may follow
OpenAI's plan to hike prices could totally backfire. A lot of the 10 million paying users of ChatGPT already think the current $20/month fee is too much. So, if they suddenly raise the cost, it might not sit well with them. This potential backlash highlights the tricky tightrope OpenAI has to walk between handling its money issues, and keeping its loyal user base for its AI services.
Transition to a for-profit company
OpenAI is also planning to switch from a non to a for-profit company. This business model will allow for the removal of any caps on returns for investors. As part of this shift, CEO Sam Altman is likely to acquire equity in the firm for the first time.
