"Insane thing: We are currently losing money on OpenAI Pro subscriptions! People use it much more than we expected," said OpenAI CEO Sam Altman. This revelation highlights that despite the high subscription cost, user engagement is surpassing forecasts, ultimately resulting in operating losses for the company.
"For the extra cash, users gain unlimited access to its advanced voice, o1 pro model, which uses more compute for the best answers to the hardest questions," Altman shared, illustrating that even premium features require considerable resources, further skewing the profit equation.
"I personally chose the price and thought we would make some money," Altman admitted, indicating that the pricing strategy was aimed at profitability but unforeseen user demand flipped that expectation on its head, leading to unexpected financial challenges.
Compute-intensive models like o1 use a chain of thought approach, generating far more tokens than traditional models. This results in longer generation times and ties up hardware like GPUs, leading to increased operational costs,
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