OpenAI is an AI research and deployment company that conducts research and develops machine learning technologies. OpenAI works on projects that involve autonomous learning and task performance. It serves industries such as technology, healthcare, and education.
OpenAI CEO Sam Altman on Sunday said that the company is currently losing money on its $200-per-month ChatGPT Pro plan because people are using it more than the company expected.
I personally chose the price,” Altman wrote in a series of posts on X, “and thought we would make some money.
ChatGPT Pro, launched late last year, grants access to an upgraded version of OpenAI’s o1 “reasoning” AI model, o1 pro mode, and lifts rate limits on several of the company’s other tools, including its Sora video generator.
OpenAI isn’t profitable, despite having raised around $20 billion since its founding. The company reportedly expected losses of about $5 billion on revenue of $3.7 billion last year.
- OpenAI, the creator of ChatGPT, expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC has confirmed.
- The company generated $300 million in revenue last month, up 1,700% since the beginning of last year, and expects to bring in $11.6 billion in sales next year, according to a person close to OpenAI who asked not to be named because the numbers are confidential.
- The New York Times was first to report on OpenAI’s financials earlier on Friday after viewing company documents. CNBC hasn’t seen the financials.
- OpenAI, which is backed by Microsoft, is currently pursuing a funding round that would value the company at more than $150 billion, people familiar with the matter have told CNBC. Thrive Capital is leading the round and plans to invest $1 billion, with Tiger Global planning to join as well.
- OpenAI CFO Sarah Friar told investors in an email Thursday that the funding round is oversubscribed and will close by next week. Her note followed a number of key departures, most notably technology chief Mira Murati, who announced the previous day that she was leaving OpenAI after six and a half years.
- Also this week, news surfaced that OpenAI’s board is considering plans to restructure the firm to a for-profit business. The company will retain its nonprofit segment as a separate entity, a person familiar with the matter told CNBC. The structure would be more straightforward for investors and make it easier for OpenAI employees to realize liquidity, the source said.
- OpenAI’s services have exploded in popularity since the company launched ChatGPT in late 2022. The company sells subscriptions to various tools and licenses its GPT family of large language models, which are powering much of the generative AI boom. Running those models requires a massive investment in Nvidia’s
The Times, citing an analysis by a financial professional who reviewed OpenAI’s documents, reported that the roughly $5 billion in loses this year are tied to costs for running its services as well as employee salaries and office rent. The costs don’t include equity-based compensation, “among several large expenses not fully explained in the documents,” the paper said.
Expenditures like staffing, office rent, and AI training infrastructure are to blame. ChatGPT was at one point costing OpenAI an estimated $700,000 per day.
Recently, OpenAI admitted it needs “more capital than it imagined” as it prepares to undergo a corporate restructuring to attract new investments. To reach profitability, OpenAI is said to be considering increasing the price of its various subscription tiers.
The company optimistically projects its revenue will reach $100 billion in 2029, matching the current annual sales of Nestlé.
