4 ms·

Where are you getting $2k/person/month? ChatGPT allegedly has on the order of 100 million users. Divide that by $5b and you get a $50 deficit per person per yea

Where are you getting $2k/person/month? ChatGPT allegedly has on the order of 100 million users. Divide that by $5b and you get a $50 deficit per person per year. Meaning they could raise their prices by less than four and a half dollars per user to break even. Even if they were to only gouge the current ~11 million paying subscribers, that's around $40/person/month over current fees to break even. Not chump change, but nowhere close to $2k/person/month.

ants_everywhere 2y ago
I think the question is more how much the market will bear in a world where MS owns the OpenAI IP and it's only available as an Azure service. That's a different question from what OpenAI needs to break even this year.
directevolve 2y ago
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alpha_squared 2y ago
What you're suggesting is the basic startup math for any typical SaaS business. The problem is OpenAI and the overall AI space is raising funding on the promise of being much more than a SaaS. If we ignore all the absurd promises ("it'll solve all of physics"), the promise to investors is distilled down to this being the dawn of a new era of computing and investors have responded by pouring in hundreds of billions of dollars into the space. At that level of investment, I sure hope the plan is to be more than a break-even SaaS.
layer8 2y ago
> ChatGPT allegedly has on the order of 100 million users. That’s users, not subscribers. Apparently they have around 10 million ChatGPT Plus subscribers plus 1 million business-tier users: https://www.theinformation.com/articles/openai-coo-says-chatgpt-passed-11-million-paying-subscribers https://www.theinformation.com/articles/openai-coo-says-chat... To break even, that means that ChatGPT Plus would have to cost around $50 per month, if not more because less people will be willing to pay that.
- zuminator 2y ago
  You only read the first half of my comment and immediately went on the attack. Read the whole thing.
  - deleted 2y ago
    [deleted]
  - layer8 2y ago
    My apologies. The “break even” calculation in the first paragraph seemed so absurd to me (as much as the $2K per month) that I must have skipped over the second paragraph. Nevertheless, with regard to the second paragraph, to fill the $5B gap it would take over $30 on top (hence $50), which would be quite a high price for many users.
danpalmer 2y ago
> around $40/person/month over current fees So 3x the fees, if they're currently at $20/user/month. That's a big jump, and puts the tool in a different spending category as it goes from just another subscription to more like another utility bill in users' minds. The amount of value you're getting out of it is hard to quantify for most people, so I imagine they'd lose customers. Also there's a clear market trend, and that is that AI services are $20 for the good version, or free. $60 is not a great price to compete in that market at unless you're clearly better.

ants_everywhere 2y ago

I think the question is more how much the market will bear in a world where MS owns the OpenAI IP and it's only available as an Azure service. That's a different question from what OpenAI needs to break even this year.

directevolve 2y ago

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alpha_squared 2y ago

What you're suggesting is the basic startup math for any typical SaaS business. The problem is OpenAI and the overall AI space is raising funding on the promise of being much more than a SaaS. If we ignore all the absurd promises ("it'll solve all of physics"), the promise to investors is distilled down to this being the dawn of a new era of computing and investors have responded by pouring in hundreds of billions of dollars into the space. At that level of investment, I sure hope the plan is to be more than a break-even SaaS.

layer8 2y ago

> ChatGPT allegedly has on the order of 100 million users. That’s users, not subscribers. Apparently they have around 10 million ChatGPT Plus subscribers plus 1 million business-tier users: https://www.theinformation.com/articles/openai-coo-says-chatgpt-passed-11-million-paying-subscribers https://www.theinformation.com/articles/openai-coo-says-chat... To break even, that means that ChatGPT Plus would have to cost around $50 per month, if not more because less people will be willing to pay that.

zuminator 2y ago
You only read the first half of my comment and immediately went on the attack. Read the whole thing.
- deleted 2y ago
  [deleted]
- layer8 2y ago
  My apologies. The “break even” calculation in the first paragraph seemed so absurd to me (as much as the $2K per month) that I must have skipped over the second paragraph. Nevertheless, with regard to the second paragraph, to fill the $5B gap it would take over $30 on top (hence $50), which would be quite a high price for many users.

danpalmer 2y ago

> around $40/person/month over current fees So 3x the fees, if they're currently at $20/user/month. That's a big jump, and puts the tool in a different spending category as it goes from just another subscription to more like another utility bill in users' minds. The amount of value you're getting out of it is hard to quantify for most people, so I imagine they'd lose customers. Also there's a clear market trend, and that is that AI services are $20 for the good version, or free. $60 is not a great price to compete in that market at unless you're clearly better.