The extraordinary growth of ChatGPT is being underpinned by staggering operational costs, forcing OpenAI to seek new revenue streams, including the introduction of advertising to its free platform. The company, once a non-profit dedicated to the beneficial development of artificial intelligence, is now navigating a complex path towards financial sustainability as it scales to serve hundreds of millions of users worldwide.
As of early , ChatGPT boasts between 800 million and 900 million weekly active users, a figure representing one of the fastest adoption rates in consumer technology history. While approximately 35 million users subscribe to paid tiers, the vast majority access the platform for free, creating a significant financial burden for OpenAI.
Running a large language model is fundamentally different from traditional web hosting. Every user prompt triggers a fresh, computationally intensive process across thousands of high-performance chips. In , estimates from technology research firm SemiAnalysis put the daily operating cost of ChatGPT at around $700,000, with $694,444 attributed to hardware and inference costs. Those figures, based on the GPT-3 infrastructure at the time, are now widely considered conservative.
OpenAI’s reported annual burn rate has now reached approximately $17 billion, largely driven by the immense computing infrastructure required to support its expanding user base and increasingly sophisticated AI models. The company does not anticipate achieving profitability until around .
From Non-Profit Idealism to Capped-Profit Reality
Founded in as a non-profit organization, OpenAI initially aimed to develop artificial intelligence “in the way that is most likely to benefit humanity.” However, by , the leadership concluded that relying solely on donations would be insufficient to fund the scale of computing power necessary for advanced AI research, particularly in the pursuit of artificial general intelligence (AGI).
The company transitioned to a “capped-profit” structure, allowing for external investment while limiting potential returns. Microsoft became a major investor, alongside SoftBank and Nvidia. By late , OpenAI’s valuation had climbed to approximately $500 billion following a $6.6 billion share sale. Reports suggest the company is preparing for a potential initial public offering (IPO) in late or , with some valuations reaching as high as $1 trillion, though these remain speculative.
Restructuring approved by California and Delaware regulators in October resulted in the following ownership distribution: 26% held by the non-profit OpenAI Foundation, 27% by Microsoft, and 47% by employees and other investors. This shift underscores the increasing pressure to demonstrate a viable path to profitability.
Who Pays for ChatGPT?
OpenAI’s revenue model is multifaceted, encompassing subscriptions, API access, and the GPT Store. ChatGPT offers a free tier, as well as paid subscriptions including Plus ($20/month), Team ($25–$30 per user/month), Enterprise (custom pricing), and Pro ($200/month or higher), offering expanded usage limits.
As of mid-, sources indicated that ChatGPT Plus had roughly 10 million users, while OpenAI had 3 million paying business users across Enterprise, Team, and Edu. Total paying subscribers were estimated at around 35 million, with a free-to-paid conversion rate of approximately 5–6%. The company reported over $2 billion in annual revenue in , with growth accelerating to a 233% increase in , reaching a revenue run rate exceeding $20 billion.
Despite this substantial growth, OpenAI’s $17 billion annual burn rate suggests that subscription revenue alone may not be sufficient to cover the immense costs associated with its AI operations.
Developers pay for API access based on token usage, with costs reaching $1.25 per million tokens for input and $10 per million tokens for output. At enterprise scale, these costs can quickly accumulate.
The launch of custom GPTs has also generated revenue, with users creating over 3 million variants within two months. Enterprise integration has also accelerated, with 61% of marketers reporting their companies provide ChatGPT Team or Enterprise licenses.
Ads, IPO Talk and the Sustainability Question
For years, OpenAI Chief Executive Sam Altman publicly expressed reservations about advertising, describing it as a “last resort” and “uniquely unsettling” when combined with AI. However, in , he softened his stance, stating he was not “totally against” ads but that careful consideration would be required.
As of , OpenAI is testing ads within ChatGPT for free and $8/month “Go” tier users in the United States. The company asserts that these ads are contextually relevant, clearly labelled, and separate from chat responses, with user privacy protected.
With 800–900 million weekly active users, the majority of whom are unpaid, indefinitely subsidizing free usage is financially unsustainable without additional revenue streams. The potential IPO is linked to this same reality, with OpenAI hoping to access capital markets capable of funding its expanding compute requirements and competition with rivals such as Anthropic.
