Soundtrack: In Flames - Colony
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There was an article yesterday that if you sign up for the most expensive OpenAI plan and actually use it fully, OpenAI loses $14k a year on you.
This reminds me of the early Internet days. I ran an ISP. Like everyone else we offered “unlimited” service. But if everyone actually used unlimited we would have been bankrupted because it would tie up a phone line (channel of a pri) and modem on the portmaster. Regular users only used 1/10th of “unlimited”.
Isn’t that basically every ‘all you can eat’ model though? 20% of people will fully max their usage, causing a loss, but the 80% of users will use far less than the purchase price, netting $$$ for the company. When that balance shifts, most places just put more limits to that ‘all you can eat’ or raise prices. Sure, I have unlimited internet, but it’s difficult to symmetrically max out my 5gbit connection to get that full ‘cost’ each month.
As long as OpenAI has a health amount of money in the bank ($50 billion it seems), they have a long time to burn money, and then you just keep getting people to invest. Pretty sure that’s been the model of every tech company for a long time. I think Uber took almost 15 years to be profitable, and had almost $50 billion invested. For a company that owns essentially zero cars, pretty wild.
There was an article yesterday that if you sign up for the most expensive OpenAI plan and actually use it fully, OpenAI loses $14k a year on you.
This reminds me of the early Internet days. I ran an ISP. Like everyone else we offered “unlimited” service. But if everyone actually used unlimited we would have been bankrupted because it would tie up a phone line (channel of a pri) and modem on the portmaster. Regular users only used 1/10th of “unlimited”.
Isn’t that basically every ‘all you can eat’ model though? 20% of people will fully max their usage, causing a loss, but the 80% of users will use far less than the purchase price, netting $$$ for the company. When that balance shifts, most places just put more limits to that ‘all you can eat’ or raise prices. Sure, I have unlimited internet, but it’s difficult to symmetrically max out my 5gbit connection to get that full ‘cost’ each month.
As long as OpenAI has a health amount of money in the bank ($50 billion it seems), they have a long time to burn money, and then you just keep getting people to invest. Pretty sure that’s been the model of every tech company for a long time. I think Uber took almost 15 years to be profitable, and had almost $50 billion invested. For a company that owns essentially zero cars, pretty wild.
I take your ISP didn’t have a free tier that also lost money, though, unlike these companies with apparently infinite money to give away