Sam Altman says OpenAI ‘shedding cash’ on professional subscriptions

Investing.com– OpenAI CEO Sam Altman mentioned that the corporate is shedding cash on its professional subscription companies, claiming that folks had been utilizing it far more than anticipated.

“Insane factor: we’re at the moment shedding cash on OpenAI professional subscriptions! Folks use it far more than we anticipated,” Altman mentioned in a put up on the social media web site X on Sunday night. 

OpenAI had in December launched a brand new subscription tier known as ChatGPT Professional, which gives customers nigh-unlimited entry to ChatGPT instruments for $200 a month. The subscription additionally supplies unique entry to a mannequin known as o1 professional mode that makes use of extra computing energy to offer solutions.

Other than professional, OpenAI has a $20 month-to-month subscription for entry to ChatGPT’s newest mannequin. The corporate additionally supplies free entry to the AI device.

ChatGPT was one of many fastest-growing functions when it comes to customers, seeing over a 100 million customers inside months of its launch in late-2022.

However a slew of media studies over the previous yr underscored OpenAI’s unprofitability, because the Microsoft-backed AI big burnt by money with quickly growing operational costs- tied largely to the excessive quantities of processing energy required to run its flagship AI fashions. 

Whereas OpenAI does generate regular income from its subscription companies, particularly by enterprise offers, its operational prices have largely overshadowed its revenue. 

A New York Occasions (NYSE:NYT) report in September mentioned the agency was set to clock a lack of $5 billion in 2024, in opposition to revenues of $3.7 billion. 

The agency had in October accomplished a $6.6 billion funding spherical that valued the AI big at $157 billion. Tech giants together with Microsoft Company (NASDAQ:MSFT) and NVIDIA Company (NASDAQ:NVDA) had participated within the spherical.