OpenAI’s New Monthly Plan Is Very Expensive. It Makes Total Sense

OpenAI’s new ChatGPT Pro plan caught everyone slightly off guard. However, it was also partly expected. In the end, the company needs to start making a substantial amount of money to avoid complicating its future.

What’s truly surprising is the high price tag. $200 a month is a lot and exceeds typical market standards. However, when you put it into context, the pricing seems reasonable. A $2,400 annual fee may appear steep, especially when you compare it to the Plus plan, which costs $240 per year. However, the Pro option is targeted at a professional audience that likely recognizes the productivity boost the new subscription plan can provide.

In perspective. It seems wiser to compare ChatGPT Pro to other premium professional software, which often comes with significant price tags.

Here are a few examples:

• Bloomberg Terminal: around $25,000 per year
• Adobe Creative Cloud: $660 per year
• Salesforce Enterprise: $300 per user per month
• AutoCAD: $2,030 per year
• MatLab: $860 per year
• Tableau Creator: $115 per user per month

The new plan may be reasonable for professionals earning above a certain income threshold. For instance, a developer earning $150,000 per year could mitigate the investment if ChatGPT Pro saves them just 3 or 4 hours per month.

Target market. ChatGPT Pro appears to target specific professional fields, which are likely to benefit from the unlimited capabilities of its most advanced model, o1.

These fields include:

• Developers (code optimization, writing from simple prompts, and solving complex bugs)
• Lawyers (rapid analysis of intricate legal cases)
• Data scientists (advanced analysis and debugging of machine learning models)
• Consultants (data analysis and report generation)
• Algorithmic traders (optimizing trading strategies)
• Medical researchers (OpenAI has granted funds to 10 medical researchers)

Reading between the lines. The operating cost of ChatGPT, which is around $700,000 per day and climbing, raises a crucial point. Even the $200 per month fee from Pro users may not cover these costs, especially from high-frequency users.

With 10 million subscribers on its Plus plan ($20 per month), OpenAI has established a three-tier strategy. There’s a free plan for casual users, a Plus plan for regular users, and a Pro plan for heavy users requiring maximum performance.

In depth. OpenAI’s new pricing strategy underscores an uncomfortable yet undeniable truth. Advanced AI can significantly enhance the productivity of certain professionals. For many, the benefits often outweigh the required investment, even if the price seems high at first glance. Naturally, OpenAI aims to capture a share of that added value.

For example, for a developer charging $100 per hour, if ChatGPT Pro halves the time spent debugging complex issues, the return on investment becomes almost immediate.

A case in point. ChatGPT’s new approach has an interesting precedent. Bloomberg Terminal revolutionized trading by providing instant, real-time access to financial data that was previously complex and costly to obtain.

Today, ChatGPT Pro offers access to advanced computing capabilities that were once only feasible through very expensive infrastructure. What’s more, the company is making it available for businesses and freelancers for “just” $200 per month.

Image | Christin Hume

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