Their current business model is not “not very profitable” it is deeply unprofitable.
They aren’t just loosing money on free users, they’re loosing money on payed users. Publicly traded for profit companies are legally obligated to provide accurate reports of the nature and source of their revenue. As of this summer (Second quarter), OpenAI was paying roughly twice as much servicing the demand of paying chat GPT users to publicly traded companies, like Microsoft, as OpenAI claimed to make from subscriptions to chat GPT.
And that’s not even counting the costs to train new models, spending with private companies, or their spending on building data centers with Coreweave or Oracle.
I highly doubt that adding advertising revenue will close that gap, especially since paying users might cancel their subscriptions if they start getting ads.
Their current business model is not “not very profitable” it is deeply unprofitable.
They aren’t just loosing money on free users, they’re loosing money on payed users. Publicly traded for profit companies are legally obligated to provide accurate reports of the nature and source of their revenue. As of this summer (Second quarter), OpenAI was paying roughly twice as much servicing the demand of paying chat GPT users to publicly traded companies, like Microsoft, as OpenAI claimed to make from subscriptions to chat GPT.
And that’s not even counting the costs to train new models, spending with private companies, or their spending on building data centers with Coreweave or Oracle.
I highly doubt that adding advertising revenue will close that gap, especially since paying users might cancel their subscriptions if they start getting ads.