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Comment by amazingamazing | Hacker News Reader

Did a quick search for profit: nada.

I am genuinely curious if lay people will pay for AI. I know people who spend literally hours daily on YouTube and complain about the ads and don’t want to pay the quarter a day to get rid of em.

Will these people pay $50 a month for gpt? We will see.

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ChatGPT already has over 20 million paying subscribers, even in its early state.

But asking if average people will pay for AI is the wrong question. It's like asking if average people will pay for Salesforce or Oracle. Even if consumers don't pay for AI en masse, their employers will as the value proposition is a lot clearer.

Is it profitable though? I do agree that employers may pay, but it’s unclear to me at least if it is profitable for them either.

OpenAI is not at all profitable right now. Which is their plan. They have from the start been focusing on hypergrowth to become one of the very biggest players. The monitization phase comes later. Probably still a few years from now. Of course it remains to be seen if they are actually able to capture a significant amount of the value when the time comes. There are many other strong players - Google and Microsoft have a massive advantages wrt distribution and data collection. Meta as well. And they have existing profitable businesses, so they can afford to give away "AI" for a long time. Cost to serve users right now is quite high, that will likely go down by a factor 10x over the next 10 years (assuming the energy prices don't go haywire).

> OpenAI is not at all profitable right now

We really don't know, in part because they're cooking all kinds of costs into R&D. My hunch is we'll recapitulate the dark fibre of the 1990s, with OpenAI et al burning capital to develop models others profit off. But that's predicated on the assumption that large models can be effectively distilled into cheap-to-run small ones. If that doesn't prove right, or the frontier keeps advancing for decades, the operating model of a high-R&D industry could resemble Intel (and semiconductors broadly) instead.

> so they can afford to give away "AI" for a long time.

Thrifty Microsoft is upping the Office 365 Family subscription to 135 USD, throwing in CoPilot.

If you choose to cancel, then they'll give you the option of keeping the current 100 USD price for the current product without AI.

For knowledge workers in western companies, 20 USD/month for ChatGPT style tool, seems like it is likely worth it for employers to front. I think over time we will see this included in "standard office tools" like email/messaging/videoconf/documents. Which would make Microsoft and Google very well positioned.

But probably everyone will adopt it - so it may not give a competitive advantage to any given company.

what he s trying to ask is if 5 billion people will pay 20$ a month to the best AI model out there

It's easy to forget that half the world's population lives in a few dollars a day [1] and sparing $20 month is unrealistic.

Also, access to market leading AI is not going to cost $20/mo when everything is said and done.

[1] https://blogs.worldbank.org/en/developmenttalk/half-global-p...

I am pretty sure the bottom 50% or even 80% of the population does not need AI chat tools that much.

right because it's going to be $20 a month for everybody around the world. that's how the world works right?

It amazes me people still trot out the same "where's the immediate profits?" line after they were wrong, wrong, and wronger, about Uber, Facebook, Amazon, and Google all being absurdly profitable in the long term. Every one of those had a tremendous amount of naysayers based on poo-pooing the company strategy of not immediately pursuing profitability. They were all wrong in every case then and they're wrong now.

All zero marginal cost businesses. What is the path to profitability where costs increase closer to linearly with each new API request?

What about the ones they were right about?

I think people who realize its not about avoiding inconvenience but a tool that will make life significantly easier will kost likely pay.

Just like paying for a smartphone or data or broadband.

The enabling technologies of the World Wide Web economic explosion were the web server and the browser. Both are now broadly available for free. The money is made in the applications enabled by them.

I think it will be similar in AI. The AI will be free or cheap; the money will be made in its application. I won’t be surprised if my kid looks back on Anthropic and OpenAI the way we look back on Sun and Netscape.

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