'Insane thing': Sam Altman says OpenAI losing money on ChatGPT subscription

Co-founder of OpenAI Sam Altman revealed that the Pro plan, designed to offer users premium access to GPT-4, is running at a loss

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Sam Altman, co-founder of OpenAI, recently disclosed a surprising fact about one of its key products — ChatGPT Pro. In a series of tweets, Altman explained that OpenAI is operating at a loss with ChatGPT Pro, a subscription service available exclusively to paying users. However, if more people are subscribing to the service, why is the company losing money?

 

Why is OpenAI losing money on ChatGPT Pro?

 

Altman tweeted that the Pro plan, designed to offer users premium access to GPT-4, is running at a loss. He said, "Insane thing: we are currently losing money on openai pro subscriptions! People use it much more than we expected."

 

The ChatGPT Pro plan has seen widespread adoption worldwide, including in India. Priced at $200 per month (approximately Rs 17,000 in India), it appeals to professionals, businesses, and students looking to boost productivity and creativity. Pro subscribers enjoy benefits such as faster response times, priority access during high-traffic periods, and enhanced features powered by GPT-4. “I personally chose the price and thought we would make some money," Altman said.

 

His statement highlights a critical challenge for OpenAI — unexpectedly high usage levels. Although the Pro subscription was intended to help cover the substantial operational expenses of running advanced AI models, current usage patterns are straining the company’s financial structure. Large language models like GPT-4 demand immense computational power, driving up cloud computing and server costs.

 

The Indian market

 

India has emerged as a key market for ChatGPT, with professionals in sectors such as education, IT, and content creation leveraging the Pro subscription to streamline workflows and harness AI-driven efficiencies. Its competitive pricing in India, compared to global rates, has further fuelled its adoption.

 

Despite raising an estimated $20 billion since its inception, OpenAI is yet to reach profitability. In 2023, the company reportedly incurred losses of around $5 billion, even with a revenue of $3.7 billion. High operational costs, including staffing, office space, and the infrastructure required to train AI models, have contributed to the financial shortfall. It was previously estimated that running ChatGPT alone cost the company around $700,000 daily.

 

(With agency inputs)