To reach profitability, OpenAI is considering raising subscription prices and aims for annual revenue of $100 billion by 2029, comparable to Nestlé's current sales.

Altman indicated that a price increase for the subscription service may be necessary to offset losses, a move that could be risky in a competitive market.

A report from The New York Times indicated that OpenAI was projected to incur a loss of $5 billion in 2024, highlighting the financial strain the company is under.

Despite raising approximately $20 billion since its inception, OpenAI has struggled to achieve profitability, reporting a loss of $5 billion against revenues of $3.7 billion last year.

In October 2024, OpenAI completed a $6.6 billion funding round, achieving a valuation of $157 billion, with significant investments from Microsoft and NVIDIA.

Despite steady revenue from subscriptions and enterprise deals, OpenAI faces high operational costs primarily related to the processing power required for its AI models.

OpenAI CEO Sam Altman recently revealed that the company is losing money on its $200-per-month ChatGPT Pro subscription due to unexpectedly high user demand.

The operational costs of running ChatGPT are significant, with estimates suggesting it costs around $700,000 per day, contributing to OpenAI's financial challenges.

OpenAI is undergoing corporate restructuring to attract new investments, as its financial needs have exceeded initial expectations.

Altman originally set the $200 price point for the subscription with the expectation of profitability, but soaring demand has led to increased operational costs.

Launched in late 2024, the ChatGPT Pro subscription offers users enhanced access to advanced AI tools, including the new o1 pro model, but has not met profitability expectations.

Aspiring AI entrepreneurs can learn from OpenAI's experience by focusing on scalability, balancing pricing with perceived value, and securing sustainable funding.