- ChatGPT’s huge global user base has created infrastructure requirements that far exceed subscription revenue
- OpenAI’s increasing computational and energy costs are pushing the company to explore ads and new revenue models.
- OpenAI is reshaping its business model and strategy to maintain AI access as usage continues to grow
Running the world’s most widespread AI system is staggeringly expensive. ChatGPT’s popular “free” tier is anything but free for OpenAI, which has reshaped its business to keep up with its own success.
ChatGPT is used by hundreds of millions of people, and each of their requests costs computing time, electricity, water, and other resources spread across data centers. This means that there is no such thing as a “free” request on the receiving end. The servers must work relentlessly to keep up and stay ahead of demand.
Even with multiple subscription tiers and enterprise agreements, the cost of maintaining global AI access at this scale has risen to around $17 billion per year, levels that necessarily shape almost every one of OpenAI’s decisions.
ONE Washington Post One analysis once calculated that the energy required to generate a single weekly 100-word AI email over the course of a year could amount to around 7.5 kilowatt-hours. Multiply this example by hundreds of millions of weekly users and the numbers quickly explode. Much of what people do with ChatGPT feels easy at the interface level, but the backend operations require powerful chips that feed off large amounts of electricity.
To manage that scale, OpenAI has undergone several structural transformations led by CEO Sam Altman. Founded in 2015 as a nonprofit designed to champion safe and beneficial AI, the organization eventually recognized that philanthropic funding alone could not support research at the cross-border level.
In 2019, OpenAI adopted a for-profit model, leading to major backing from Microsoft, which now owns approximately 27% of the company, along with billion-dollar investments from the likes of SoftBank and Nvidia. OpenAI is worth around $500 billion now, with speculation that an IPO could come as early as later this year.
Ads for AI
Even with that backing, OpenAI must continue to generate significant revenue from its consumer and business products. Subscription tiers bring in some money, but $20 per month for ChatGPT Plus, $200 per month from ChatGPT Pro, and the Team and Enterprise tiers are only a small portion of ChatGPT’s total spend. And API costs paid by companies per token brought more than $20 billion in annual revenue by 2025.
But it is not enough to keep pace with infrastructure requirements. Therefore moved to advertising in ChatGPT. The ads have started rolling out to free users and those on the $8-a-month ChatGPT Go tier. These ads are branded and separate from chat responses, but their presence signals OpenAI’s need to diversify revenue as computational spending continues to rise.
For regular users, the introduction of ads raises questions about how the product might evolve. Free access may be limited over time, with more features placed behind subscription tiers. Ads may become more common for non-paying users. Businesses that rely heavily on the API may experience price changes as the business balances cost recovery with market competition.
The challenge OpenAI faces is not unique: the economics of generative AI differ from traditional consumer technology. As a social network grows, each additional user usually costs very little. Here, each new user can generate tens or hundreds of expensive calculations per day.
As AI becomes more embedded in everyday life, the cost of delivering these capabilities will shape how companies design them. Users may see changes in pricing, restrictions on free access, or incentives to upgrade. ChatGPT’s move from research project to global phenomenon provides insight into how cutting-edge technology evolves from novelty to infrastructure. But it’s worth remembering that behind every smart answer and every helpful suggestion is a network of data centers humming away, consuming power and costing someone, no matter what it claims to be free.
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