OpenAI may hike subscription price before 2024-end as it pivots to a for-profit model

It looks like using ChatGPT might soon become a bit pricier. OpenAI, the company behind the popular AI chatbot, is reportedly planning to raise the cost of its ChatGPT Plus subscription. According to a new report, paid users might see an increase of $2  in their monthly fees before the end of 2024.

But that’s just the beginning – over the next five years, the subscription price could rise even more steeply, with projections suggesting it could hit $44 a month by 2029. The move seems to be part of OpenAI’s strategy to ramp up its revenue and cover the high costs of running its AI services.

Subscription price hike on the horizon
As reported by The New York Times, OpenAI is gearing up to increase the monthly fee for ChatGPT Plus users. The current price stands at $20 a month in the US, but the planned $2 hike will bring it up to $22.

And if OpenAI’s long-term plans stay on track, subscribers could be paying a whopping $44 by the end of this decade. These changes are part of the company’s ambitious goal to boost its annual revenue, which it hopes will reach $100 billion by 2029.

To put that in perspective, OpenAI is aiming for revenue levels comparable to those of industry giants like Reliance Industries or Comcast.

At the moment, OpenAI has around 10 million ChatGPT Plus subscribers, contributing to what is already a significant revenue stream for the company.

The financial documents, which were reportedly viewed by The New York Times, suggest that OpenAI is already pulling in billions from its paid users and expects those figures to keep growing in the coming years.

While the company’s ambitions are high, it seems the increased subscription costs will play a major role in achieving those revenue goals.

High costs of operations
Despite the promising revenue, OpenAI is facing challenges with its operational costs. The company is projected to lose about $5 billion this year alone. A large portion of this is spent on maintaining its AI-powered services, as well as on salaries for its employees and office expenses.

One of the biggest expenses, however, is cloud computing. OpenAI relies heavily on cloud processing services provided by Microsoft, which is a key partner in the company’s operations. Although Microsoft provides around $13 billion annually to OpenAI as part of their partnership, much of this money is funnelled right back into covering cloud costs.

With such high expenses, it’s no surprise that OpenAI is looking to raise its subscription prices as it pivots to a more for-profit model. The company’s ambitious plans for the future include expanding its services and increasing its market share, but it will need to keep a close eye on its operational costs if it hopes to turn a profit in the long run. For ChatGPT Plus users, however, this might mean having to shell out more in the near future.