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How many people does AI need to be profitable? That depends if they’re paying.
The Wall Street Journal reported yesterday that CFO Sarah Friar has told fellow execs that she feared the company wouldn’t be able to pay for compute if revenue didn’t pick up.
OpenAI disputed the report. “This is ridiculous. We are totally aligned on buying as much compute as we can and working hard on it together every day,” CEO and Co-Founder Sam Altman and Friar said in an emailed statement to Reuters.
The WSJ report suggested that OpenAI had a goal to hit 1 billion weekly active users by the end of last year. Goals it hasn’t quite met: in February, OpenAI said it had reached 900 million.
The next month OpenAI unexpectedly shut down its text-to-video app Sora and cancelled plans to release an “erotic” version of its chatbot. This sparked rumours that it was cutting back on low-paying features that required too much compute.
The WSJ report also suggested OpenAI was increasingly concerned about subscriber defections.
Google was reportedly sitting at about 650 million monthly active users – not weekly, as OpenAI uses – in November. Some estimates suggest it had climbed by 100 million in the past few months.
Maybe that’s where OpenAI’s missing 100 million has gone? However, it’s also likely that many people are using multiple systems. This would impact ChatGPT’s weekly figures harder than Gemini’s monthly ones.
Beyond that, OpenAI’s eagerness to work with the US military after Anthropic walked away amid the Iran war raised concerns among some users. This added to an already existing call to boycott the company. Over on the QuitGPT website, four million people have signed up as taking part in the boycott. The full figures are impossible to unpick, but it likely remains a small slice of the total.
Those figures include the many hundreds of millions of people using ChatGPT for free. However, OpenAI (and its fellow AI giants) actually need users to start paying to cover the costs of data centres.
Back in February, OpenAI said it had 50 million paying subscribers out of that total 900 million. That’s about 5.5% of its overall user base. At least it’s doing better than Microsoft, which estimates that of the 450 million Microsoft 365 users with access to Copilot Chat, only 3.3% pay the extra fees for additional Copilot skills. That’s one reason for Microsoft bundling Claude Cowork into its own Copilot, after years of favouring OpenAI.
Which brings us to Anthropic, which has an estimated 30 million total users. While its user base is far smaller than OpenAI’s, reports suggest it’s raking in paying users. Perhaps this is in part down to its focus on specific enterprise services rather than generic chatbots. The company is even making market-upsetting announcements that spook the software and services industries.
Every tech firm wants to be first to market and have the most users for the clout. However, the smart money is always on making products that people want and are willing to pay for, rather than supplying extremely expensive technologies for free.
