The highlights

OpenAI, the company behind ChatGPT, is facing significant financial challenges.

Although its monthly revenue rose to $300 million in August, the company expects to lose about $5 billion this year.

OpenAI is sharing these financial updates with potential investors as part of the funding round.

If you’re enjoying the benefits of a ChatGPT subscription, you may soon notice a change in plan pricing. OpenAI, the company behind ChatGPT, is facing significant financial challenges despite rapid growth in its user base and revenue. Although its monthly revenue rose to $300 million in August, the company expects to lose about $5 billion this year.

OpenAI is sharing these financial updates with potential investors as part of a funding round that could raise $7 billion and value the company at $150 billion, The New York Times reports. While the revenue numbers look impressive — OpenAI projects $3.7 billion in sales this year and $11.6 billion next year — the company’s costs are skyrocketing as it grows. .

Also read: Apple is no longer in talks to join OpenAI’s $6.5 billion funding round, check the details.

A major cost for OpenAI comes from its reliance on Microsoft’s computing infrastructure. As OpenAI’s largest investor, Microsoft has invested more than $13 billion in the company. However, a significant portion of that investment is funneled back into Microsoft’s cloud services, which power OpenAI’s products.

ChatGPT’s growing popularity has been a major driver of revenue, with around 350 million users interacting with the platform each month. Of those, about 10 million users pay $20 per month for premium access. But to balance rising costs, OpenAI is reportedly planning to raise that price to $22 by the end of the year, with a further substantial increase to $44 within five years.

Also read: “When actual regulation is on the table, he opposes it”: Former OpenAI researcher claims Sam Altman does not support AI regulation.

Despite these challenges, OpenAI is optimistic about its future. It is expected to bring in $100 billion by 2029, a figure that rivals the annual revenue of major corporations such as Nestlé and Target. OpenAI is also restructuring its business model and considering transitioning to a fully profitable company, which will attract more investment in the future.

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Ayoshi Jain

Tech news writer by day, BGMI player by night. Combining my passion for tech and gaming to bring you the latest in both worlds. View full profile