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> Your relative margin may have doubled, but your absolute profit-per-item hasn't. ChatGPT doesn't have any profits right now. We have no idea what investors
by onlyrealcuzzo 2y ago
> Your relative margin may have doubled, but your absolute profit-per-item hasn't.
ChatGPT doesn't have any profits right now.
We have no idea what investors are expecting future profits to be.
> Say you had a 10% margin before, at a $100 price and $90 cost, for a $10 profit-per-item. Reduce price 27x and cost 45x, so $3.7 price, $2 cost, and $1.7 profit-per-item. 6x less profit - not as bad as 27x, but not good if you're OpenAI.
Now do the same thing but assume you have 10x more subscribers because the prices are ~27x lower.
You end up with almost 2x more total profit.
Just take ChatGPT's ~$200 subscription. Hardly anyone is going to pay ~$200 a month. Reduce that by 27x - and you're at $7.5 per month. Maybe 10% of people on the planet will pay that.
- ceejayoz 2y ago> Now do the same thing but assume you have 10x more subscribers because the prices are ~27x lower. You're in various spots of this thread pushing the idea that their 1B MAUs make them unassailable. How are they gonna get to 10B in a world with less than that total people? > Just take ChatGPT's ~$200 subscription. Hardly anyone is going to pay ~$200 a month. Reduce that by 27x - and you're at $7.5 per month. Maybe 10% of people on the planet will pay that. They can't even make money at the $200 price point, though. https://x.com/sama/status/1876104315296968813 https://x.com/sama/status/1876104315296968813
- hadlock 2y agoif ChatGPT starts selling ads on chat results that will probably improve revenue. I've seen social media ads recently for things I've only typed into ChatGPT so that leads me to believe they're already monetizing it to advertising platforms.