OpenAI Considers Significant Price Hike for ChatGPT Plus Subscription

ChatGPT Plus price could more than double within 5 years -- here's why

Investment documents outline plans for paid ChatGPT accounts to rise to $44 a month over the next five years By most measurements, ChatGPT has been an enormous success, taking the world by storm since launching in November 2022 with the GPT-3.5 model. But like many big names in tech, one measurement where it's still not a runaway success is in terms of profitability, as a new report from the New York Times highlights. As the headline explains, ChatGPT's owner OpenAI is "Burning Through Piles of Money," and that means that multiple price hikes of the paid ChatGPT Plus service are in the cards over the next five years. According to documents for investors seen by the paper, OpenAI seeks to "aggressively" raise subscriber prices from the current $20-per-month fee to $44 over the next five years in an attempt to hit $100 billion in annual revenue in 2029. That will start with a relatively modest $2 increase by the end of the year, the piece explains. At the moment, the paid version of ChatGPT offers access to higher-end models, reduces the limitations of the free version, and grants access to the image generation tool DALL-E. Though it's possible that more features will be added to make the price more appealing, of course. The need for the price hikes is pretty clear. While the documents show OpenAI expecting to hit a healthy $3.7 billion in annual sales this year ($2.7 billion from ChatGPT Plus and $1 billion from other tech companies using its products), it still expects overall losses of around $5 billion thanks to staff costs, rent and, above all, the sky-high cost of running its services. Even ChatGPT evangelists may balk at the idea of paying $44 a month for the service, but it's important to remember that this is the projected price for 2029. Given the incredible advances AI has made in the past two years, it's fair to assume that ChatGPT will be wholly unrecognizable in five. It may well prove to be indispensable for its users by that point. But it's undoubtedly a balancing act, and OpenAI's pricing will ultimately be dependent on what the market will bear: doubling the cost of a product doesn't automatically equate to doubling the revenue. To put it bluntly, higher subscription costs wouldn't plug the financial gap if the number of subscribers plummets as a result of high pricing. In other words, the ambition may be to hit $44 a month by 2029, but OpenAI may be forced to settle for less. Despite the losses, the investment documents are as bullish about OpenAI's prospects as you would expect. With 1,700% monthly revenue growth between the start of 2023 and August, the documents predict a tripling of revenue to $11.6 billion next year and $100 billion by 2029 -- a figure that would put it on par with the likes of Nestlé and Target today. The current search for funding is seeking to raise up to $7 billion -- a figure that would put OpenAI's value at $150 billion. For regular users, ChatGPT continues to get new features quite regularly. Just this week, Advanced Voice Mode rolled out to paid subscribers, which combines text, vision and audio processing for faster and more efficient responses.

The price of ChatGPT Plus could more than double in the next five years

That's according to a report from the New York Times, apparently based on internal company documents from OpenAI. The first price bump, an extra $2 a month, is tipped to be coming before the end of 2024. After that, we can expect OpenAI to "aggressively raise" the cost of ChatGPT Plus to $44 (about £33 / AU$64) a month by 2029. There are currently around 10 million people paying for ChatGPT Plus, the NYT report says. We're now well used to digital subscription services bumping up their prices every so often, and it seems ChatGPT Plus is going to be no different in that regard - though there may well be new features and new AI models alongside the price increases. The main reason for the projected price hike for ChatGPT Plus is clear: powering the AI service costs a lot. The new report says OpenAI is "burning through piles of money", and is on course to lose $5 billion across the course of 2024. While monthly revenue is now up to $300 million, and annual sales are expected to be $3.7 billion this year (and $11.6 billion next year), OpenAI remains very firmly in the red, as per the documents that the NYT has managed to gain access to. Behind the scenes, OpenAI is looking to raise around $7 billion in outside funding, which would value the company at a cool $150 billion - around the level of a Goldman Sachs, an Uber, or an AT&T. There continues to be turbulence behind the scenes though, with three executives quitting the company in the last week. None of this necessarily affects end users though - at least not until the price rises start. In recent days, OpenAI has pushed out improvements to the ChatGPT 4o-mini model, and rolled out the chatbot's Advanced Voice mode to more users.

ChatGPT subscription cost could potentially double in a few years - 9to5Mac

According to a report from The New York Times, OpenAI is planning on gradually increasing the price of ChatGPT+ over the course of the next five years. This information was obtained from internal documents that are being circulated to potential investors. Right now, ChatGPT Plus is available for $20/month. The subscription gives you access to higher end models, reduces limitations, and provides access to DALL-E, their image generation tool. However, this will be changing soon. ChatGPT Plus will become $22/month by the end of the year, according to the documents. Additionally, the price will increase over the course of the next five years, eventually becoming $44/month. OpenAI currently has 10 million ChatGPT Plus subscribers. Apple is expected to be adding support for ChatGPT within Siri in iOS 18.2. While the features won't require an OpenAI account or a ChatGPT Plus subscription, you will be able to sign in for additional capabilities natively in iOS. As stated earlier, this information comes from documents being sent to investors. OpenAI is currently trying to raise up to $7 billion, valuing the company at $150 billion. Apple was initially rumored to be participating in this funding round, but they have allegedly left the discussions. This $150 billion valuation is a massive leap from just a year ago, where they were only valued at $30 billion, right around when Microsoft started investing in them. OpenAI's monthly revenue was $300 million as of August, and the company expects to bring in $3.7 billion in revenue this year. However, despite that, OpenAI is still planning to lose $5 billion this year after paying for all of their expenses. Building AI is expensive, and OpenAI will likely continue to raise money to keep their ventures going. Among their 3.7 billion in annual revenue, 2.7 billion comes from ChatGPT subscriptions, with the other 1 billion coming from tech companies that utilize their APIs to implement AI features within their products. OpenAI also expects their revenue to triple next year, anticipating $11.6 billion. It's unclear how they plan to accomplish this. By 2029, which is when ChatGPT+ will reach its $44/month price point, they expect their revenue to reach $100 billion. Sam Altman, CEO of OpenAI, is also expected to receive equity in OpenAI for the first time, gaining 7% of the company. His stake would be worth $10.5 billion if the reports are accurate. Sam gaining an equity stake comes after loads of OpenAI drama. Last November, he was fired by the board for not being candid in his communications. Afterwards, loads of OpenAI employees protested in support of him, and he was eventually rehired after some board reshuffling. However, that wasn't the end of that. Over the last 9 months or so, tons of senior employees have left OpenAI, including CTO Mira Murati, Chief Scientist Ilya Sutskever, and others. Do you utilize ChatGPT enough to justify paying $44/month in a few years? Do you pay for ChatGPT Plus currently? Let us know in the comments.

OpenAI might raise the price of ChatGPT to $22 by 2025, $44 by 2029 | TechCrunch

ChatGPT could get more expensive to use in coming years. The New York Times, citing internal OpenAI docs, reports that OpenAI is planning to raise the price of individual ChatGPT subscriptions from $20 per month to $22 per month by the end of the year. A steeper increase will come over the next five years; by 2029, OpenAI expects it'll charge $44 per month for ChatGPT Plus. The aggressive moves reflect pressure on OpenAI from investors to narrow its losses. While the company's monthly revenue reached $300 million in August, according to The NY Times, OpenAI expects to lose roughly $5 billion this year. Expenditures like staffing, office rent and AI training infrastructure are to blame. ChatGPT alone was at one point reportedly costing OpenAI $700,000 per day. OpenAI could face a blowback if it increases prices too quickly. While ChatGPT has roughly 10 million paying users today, surveys suggest that many believe the current $20-per-month price is too high.

OpenAI Plans To More Than Double ChatGPT Price Over Next 5 Years: Report - Microsoft (NASDAQ:MSFT)

OpenAI, the company behind ChatGPT, will reportedly increase the chatbot's price by 10% this year, and more than double it to $44 over the next five years. What Happened: Microsoft Corp.-backed MSFT OpenAI has informed investors that its monthly revenue reached $300 million in August, a 1,700% increase since early 2023. The company projects annual sales of approximately $3.7 billion this year, reported the New York Times. Currently, OpenAI charges $20 per month for ChatGPT Plus subscriptions. The report suggests that it could be increased to $22 by the end of this year, and more than doubling to $44 over the next five years. Despite the revenue surge, OpenAI anticipates a loss of around $5 billion this year due to operational costs, employee salaries, and office rent. These figures exclude equity-based compensation and other significant expenses. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. OpenAI is currently in talks with potential investors for a funding round that could raise $7 billion, valuing the company at $150 billion. The round could close as early as next week, amidst the company's rapid growth and recent executive departures. See Also: Sam Altman Poised For $10.5B Payday As OpenAI Transitions To For-Profit Model With $150B Valuation On Horizon The documents reveal that OpenAI's revenue in August more than tripled from the previous year, with 350 million monthly users as of June. ChatGPT, released in November 2022, has driven much of this growth. OpenAI did not immediately respond to Benzinga's comment request. Why It Matters: The price hike comes amid significant organizational changes and strategic shifts at OpenAI. Recently, OpenAI is planning a transition from a non-profit to a for-profit model to attract more investors. This restructuring could result in a substantial financial gain for CEO Sam Altman. Additionally, the company has faced high-profile executive departures, including CTO Mira Murati. Murati announced her decision to leave OpenAI in a memo shared with the team, which she later posted on X, formerly Twitter. Despite these challenges, OpenAI's CFO Sarah Friar reassured staff of "incredibly high" investor interest in the company's funding round. This announcement aimed to stabilize the workforce following the unexpected resignations of several high-profile executives. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Elon Musk Reacts After Cathie Wood Labels Gavin Newsom's Threat To Sue Tesla CEO Over Memes 'Unconstitutional' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs