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 (NASDAQ: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.
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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.
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.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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