OpenAI, the company behind ChatGPT, has announced plans to raise the price of its chatbot service by 10% this year, with a projected subscription fee of $44 over the next five years. The Microsoft Corp.-backed company has reported a significant surge in monthly revenue, reaching $300 million in August, marking a staggering 1,700% increase since early 2023. OpenAI expects its annual sales to reach approximately $3.7 billion this year, as reported by the New York Times.
Currently, OpenAI charges $20 per month for ChatGPT Plus subscriptions, but the company is considering raising the price to $22 by the end of this year. Over the next five years, the subscription fee is expected to more than double, reaching $44. Despite the impressive revenue growth, 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.
In light of its rapid growth and recent executive departures, OpenAI is in talks with potential investors for a funding round that could raise $7 billion, valuing the company at $150 billion. The funding round is expected to conclude as early as next week. OpenAI’s revenue in August tripled from the previous year, with 350 million monthly users as of June. The release of ChatGPT in November 2022 has been a major driver of this growth.
OpenAI’s decision to increase the price of ChatGPT comes amidst significant organizational changes and strategic shifts. The company is transitioning from a non-profit to a for-profit model to attract more investors, potentially resulting in a substantial financial gain for CEO Sam Altman. Additionally, OpenAI has experienced high-profile executive departures, including CTO Mira Murati, who announced her decision to leave the company in a memo shared with the team.