ChatGPT, the conversational Artificial Intelligence by OpenAI, has been adopted by hundreds of millions of users since it was first deployed for public use last November. It can write essays and poetry, summarize content, code and review software, and design diet plans, among many more services.
You can use it for commercial purposes without restriction and people are even using it to work multiple full-time jobs. It seems too good to be true, even with some possible bias and mistakes; or rather, it seems too good to be free, which has been so far.
ChatGPT’s current deployment is presented as a “Free Research Preview,” which means access can be limited to paying users as newer versions are released. In fact, a premium version was presented in February that was based on an improved model version, GPT 4, only accessible through a paid monthly subscription.
At the time, Open AI stated that they will continue to offer free access to ChatGpt. But for how long will that be? As this nascent technology is expanded and new competitors arrive on the market, it seems likely that a variety of access possibilities, both free and paid, will be offered to users depending on multiple purposes.
From Non-Profit To Commercially Oriented
Open AI started as a non-profit in 2015. Three years later, it switched to a capped-profit company, meaning that profit can only be obtained up to a maximum amount for holders and investors. As it became a for-profit company with limitations, it was decided that it would still be overseen by a non-profit board.
But in 2019, Microsoft made a $1 billion investment in Open AI, which not only secured an exclusive partnership of platforms and technology between the two companies but also that Microsoft to become “Open AI’s preferred partner to commercialize new AI technologies.”
ChatGPT’s release in November 2022 as a free tool gave Open AI two incredible advantages: worldwide recognition and massive user adoption (one of the fastest in history), and plenty of feedback and user data to improve the technology and release better versions in the future. However, operating costs (around $700.000 per day, according to Business Insider) are not sustainable in time without commercial monetization, as Open AI’s CEO Sam Altman said on Twitter last December.
That is why ChatGPT Plus, a payment version, was released last February. It is subscription based ($20 per month) and offers additional features such as more stable access, even during peak hours; faster response times; and priority access to new features and improvements. GPT 4, the latest iteration of ChatGPT’s AI technology, is also included with a ChatGPT Plus subscription, whereas the free version is only based on GPT 3.5, much less developed in comparison.
New Technologies, Commercialization, And Competition
Google was launched in 1998 and it quickly became the dominating search engine in the world. But only after three years it started to become profitable with the release of Adwords, its advertisement service and main business model. Now Google is one of the most profitable companies in the world.
As David Karpf wrote in The Atlantic: “New markets materialize over time.” Revolutionary technologies usually have to experience an adoption time before their commercial uses become profitable. That basically means that they are commonly for free until they are not anymore.
That seems to be the case for ChatGPT as well. After it has established its user base, it will more likely charge for its platform use directly or through third-party applications: other companies that will incorporate ChatGPT in their own services. A simpler advertisement model is also possible.
The more likely scenario shows a plural revenue system that could include advertisement in some form, third-party applications, and subscription-based direct service, with multiple tiers depending on different users and purposes. That does not mean the free service will disappear; it will probably remain in place, but much more limited than with paid versions.
As new competitors enter the AI market, like Google’s Bard or Snapchat’s My AI, the commercial options of access will also be diversified, and an ecosystem of commercial services will be established for Artificial Intelligence.
For now, not only is AI a nascent technology, but also a nascent market to be developed.