ChatGPT Pro’s price point wasn’t a slam dunk at launch. It’s $2,400 per year, and the value proposition of o1 pro mode in particular remains murky. But judging by Altman’s posts, it seems that users who have bitten the bullet are making the most of it — at OpenAI’s expense.
It’s not the first time OpenAI has priced a product somewhat arbitrarily. In a recent interview with Bloomberg, Altman said that the original premium plan for OpenAI’s AI-powered chatbot, ChatGPT, didn’t have a pricing study.
Kyle Wiggers
I believe we tested two prices, $20 and $42, he told the publication.People thought $42 was a little too much. They were happy to pay $20. We picked $20. Probably it was late December of 2022 or early January. It was not a rigorous ‘hire someone and do a pricing study’ thing.
Looks like the concerns around the ballooning costs and ultimate profitability of generative AI were very on point. With the CEO openly admitting it, investors should be questioning the horizon on their returns on investment – and the massive valuations of any vaguely AI-related stock.
It’s certainly possible that these comments are merely a tactic to continue raising money for OpenAI. But if they are remotely close to actual profitability metrics, they point to bleak prospects for the company. One of the common talking points of generative AI defenders is that most of the operating costs are associated with the initial training of the large language model, while the cost of individual queries once the model is up and running should be fairly low and improve over time. These comments contradict that assumption, and hint that ongoing operations may be substantially costlier than originally thought. Besides, I don’t know why people make this argument in the first place, because it seems to me that models should constantly retrain on new data, especially if you intend to run a search engine on top of these language models.
The bit about selecting the launch price of ChatGPT is hilarious as well. OpenAI seems to have no idea how to run a profitable business – not uncommon among US startups, I’m sure – and the single driving principle is to ship things fast to get ahead. A break-even analysis is not even that complicated; you wouldn’t need to hire externally to do it if you have a clear picture of your cost structure and the trends going forward. But maybe that’s too much to ask…
Post a Comment